PikeNet Dispatch, June 17, 2003
Vol 8 No. 47 (676), "More than 9,000 subscribers"

Did Martha Know the "Code"? ... How do you "lubricate" the real estate machine without public disclosure of some data flowing primarily from private transactions? Last week's Dispatch What (Real Estate) Information Should Be Confidential? (June 10) generated lots of reader feedback.

Ward Caswell, Director of Information Management at CB Richard Ellis, writes, "The key to confidentiality is the timing of the information trade. The second important component is the expectation of the marketplace. In a publicly traded security, the playing field is supposed to be level as it relates to availability of information likely to affect pricing components. Is the same true in real estate? Certainly for publicly traded components such as CMBS issues or REITs, there are strict rules. But for private transactions, it's up to the individuals involved."

Whitney Peyton with CB Richard Ellis, Minneapolis, MN, raised the issue of an "inflection point" between relatively accessible information, like ceiling heights, versus closely guarded information, like lease comparables. "We need to adopt a data standard as an industry and bring state laws into alignment to get best transparency."

Steven Hufendick with ING Americas Corporate Real Estate raised the intriguing idea of speaking in "code" when discussing leasing transactions. "These contracts are typically private, even after the transaction is complete. But the marketplace has devised a method to create a shared knowledge base for this segment: 'Lie within established parameters.' [Editor: Remember the Dispatch, Is that a Puff or a Lie? (Feb 6, 2003).]

"Most leasing brokers won't impart to you the actual details of a lease transaction, but they will communicate in code. And if you know the code, you can cull the information. Perhaps 'code' isn't the best solution. But it seems to satisfy client protection while getting the marketplace the information it needs. After all, clients benefit from the code, too." ... (More comments in the next Dispatch.)

--Peter Pike