Real Estate Research On-Line
"Your mission, gentlemen, should you choose to accept it, is to research a mixed-use building in Grand Rapids, Michigan. You have 72 hours and, of course, a limited budget. Good luck."
Tom Cruise and self-destructing tapes aside, the initial round of research in the property management and acquisition business, with ever-tighter deadlines, often feels like an impossible mission—at least, that is, until now.
The Internet's round-the-clock global access to information has thrust open the window of time that can be spent researching, analyzing, and communicating. Missions have become not just possible, but probable.
Join us as we scramble on-line to provide an initial work-up on a hypothetical mixed-use building in Grand Rapids, Michigan, which we will cautiously refer to as ABC Building. Its anchor tenant/owner is XYZ Bank. Other tenants include law, accounting, and public relations firms, as well as several retail storefronts.
In searching for owner/tenant information, we attempt to balance time and money. While there are gigabytes of real estate information on-line at little or no cost, it often takes considerable time to separate the electronic wheat from the chaff.
As a result, we elect to use a number of single-source data services that offer public and proprietary information for a cost. We plan on spending from $25 to $300 on fees ranging from a token access charge of a few dollars to per-item search services where you can run up a big total in a hurry.
The Land of the Free...
First, we pursue the free options: We check if XYZ Bank or any of the tenants has a page of its own on the World Wide Web by typing their names into a search engine. We prefer Yahoo! () or AltaVista (). We may not learn any "secrets" here, but such pages can offer useful information on the organization's history, executives, and overall philosophy.
In the case of publicly held entities such as XYZ Bank, financial results are sometimes posted on company Web pages. For searching public companies—including listed companies and REITs—the free EDGAR database of the Securities and Exchange Commission (SEC) is a must-see. At the Search SEC EDGAR Archives site (http://www. sec.gov/cgi-bin/srch-edgar), we enter the bank's official name—XYZ Bank Incorporated—and unlock a treasure trove of information on the building's owner. Within 24 hours of filing, EDGAR has all quarterly (Form 10-Q) and yearly (Form 10-K) financial information filed by XYZ Bank, as well as discussions on company operations. Events such as acquisitions or ownership changes are documented in Form 8-K.
One of the great things about the burgeoning popularity of the Internet is that more local newspapers and trade publications are going on-line. Most are accessible either directly at a Web site or through services such as America OnLine (AOL), Compuserve, or Prodigy. They can represent important low-cost resources. In some cases, a small charge may be required to access archives.
By utilizing newspaper and trade publication sites, stories may be found on everything from new hires to the company's last acquisition. Though papers such as the New York Times, San Jose Mercury News, and Detroit News have Web sites, Grand Rapids' daily newspaper does not yet have archives available for an on-line search. However, we can access the Grand Rapids Press via a pay-for-play service such as Dow Jones, which we'll explore later.
We also attempt to tap on-line state and county sites to look into the ownership history of our target property, ABC Building. Unfortunately, most do not yet have records available on-line.
...And the Home of the Paid
Turning to the serious pay-for-data services leads us first to Dun & Bradstreet's Business Background Report (). For $20 per report, D&B provides the following information on XYZ Bank and some building tenants: address, phone numbers, annual sales, net worth, year started, location of all offices, number of employees, information on executives and XYZ's industry, and company events and history.
D&B is usually a great bargain. However, every search does not yield a wealth of information—particularly in the case of our privately held law, ad, and public-relations firm tenants. For public entities, such as XYZ Bank, D&B typically provides several pages on the categories listed above.
Next up the continuum is Dow Jones News/Retrieval, a kind of combination of Lexis/Nexis and Compuserve services at which subscribers are billed by characters downloaded instead of access time. Dow Jones offers a variety of individually available databases— D&B, Disclosure, and SEC filings— that are billed at a premium for the convenience of one-stop shopping.
Perhaps Dow Jones' most indispensable asset is its text library, with thousands of newspapers, magazines, and newsletters archived. Fortunately, the Grand Rapids Press and Grand Rapids Business Journal are archived. This allows us to quickly search the local papers for articles on XYZ Bank and each of the tenants. A typical search on Dow Jones involving D&B, SEC filings, and newsclips will run $50 to $500 or more.
Last on our list are the numerous specialized search services available on the Internet. For a fee ranging from $5 to more than $50, these companies will search real property ownership records; federal, state, and county tax liens; bankruptcy filings; and civil-court judgments. For $20, searches also can be done on real property refinance, construction loans, and seller carry-back information.
One of the largest of these firms is CDB InfoTek (), with more than 1,600 databases available for a same-day search. Datalink Technologies () provides similar same-day searches for $20. Another large search service is Disclosure (800-754-9690), which will pull the annual reports that our privately held tenants file with the Michigan secretary of state's office or provide SEC documents minutes after they are filed. It comes with a steep price tag, from $50 to about $200, but we're in a hurry.
Market Data and Demos
Though our search for ownership and tenant information often links us to national Web sites, studying the local market requires on-line data from the target community. We use a variety of searches, links, and communication with city residents.
To talk directly with Grand Rapidians, we try tapping "chat rooms" or forums on the commercial services, but this information is circumspect and unreliable at best. We also search the Web for information on Grand Rapids. A growing number of cities have established home pages, which can be found directly by typing the city name into a search engine or through sites such as City.Net ().
We prefer the direct targeting of AltaVista's Advanced Query. We type: "Grand Rapids AND Michigan." Our results: 500 choices. We narrow our search by adding the word "real estate" and get far fewer hits, including one that obviously appears as Grand Rapids' own home page. At we find the city history, population, size, climate, employment base, and phone numbers of city officials. On-line sources aside, nothing beats a phone conversation with someone in the know.
We also stumble onto a few bits of information at other locally based Web sites: There's a new $75 million arena being built in downtown Grand Rapids, one local politician's Web site announces. Another university Web site tells of a farmer's market two days per week on the pedestrian mall where our building is located. This is typical of the serendipity that Web surfing can yield.
We're not always so lucky. Fortunately, there are a couple of other useful government sites on the Internet, including the U.S. Census () and the Department of Housing and Urban Development (HUD). The latter () provides a lengthy description of the community in HUD Housing Plans, which we download. At the Census site, we view and download maps and tap demographics about the area, as well as the minutiae that is census data. For instance, we learn the majority of Grand Rapidians travel less than 19 minutes to work. Most drive. Tenant parking at ABC Building is, no doubt, an issue.
We take another quick visit to a site run by USADATA Incorporated (), which contains market and lifestyle statistics on cities around the country. However, the data, collected by Scarborough Research from surveys of 1,650 to 10,000 respondents depending on city size, is limited mostly to lifestyle statistics: what restaurant chains are attended by a certain demographic, for example.
We search national business media (Business Week, Investors Business Daily on AOL) via our commercial service provider to find articles on the national real estate market for comparative purposes. We also turn up on-line analyses of the national market in the office, industrial, and retail sectors at Nomura Securities International Incorporated's Commercial Real Estate Quarterly site (), one of many on-line sector reports put out by various companies. We download the text to dump into our report, with attribution, of course.
We also search Usenet newsgroups (also referred to as Usenet, newsgroups, or just news), which allow us to take part in an ongoing electronic discussion on particular topics. Newsgroups, text-driven and obtainable through search engines, are the electronic equivalent of the community bulletin board and, as such, are a bit clunky. We search newsgroups with the phrase "commercial real estate." The result: 200 postings, many of which bear titles such as "Big Money" and "HTML Tips." To narrow our search, we add the phrase "property management" and come up with 14 results, including one titled "Law-related resources on the Internet." Because downloading newsgroups takes time and searching energy, we instead send an e-mail to the group seeking information about unique, cost-effective office-building amenities.
Comps and Lease Information
We now turn to commercial real estate comps for ABC Building. The Net offers little in terms of lease rates or occupancy statistics for Grand Rapids. Market profiles of larger cities can be researched more easily via on-line newspaper articles or trades such as Commercial Real Estate Reporter ().
We also tap Teleres, a Dow Jones service specializing in commercial real estate, for market information. Priced at a hefty $1,000 to $1,800 a month, depending on access level, Teleres is divided into subcategories focusing on demographics, economics, market statistics, securities, financial indexes, and property information. Teleres also lets subscribers study commercial real estate statistics and analysis in chart and graph formats that allow visual comparisons among data from diverse sources.
For straight comps, we turn to more obvious sources: the local multiple listing service and commercial real estate brokers. We search for Grand Rapids-area commercial real estate brokers at the CCIM Commercial Real Estate Network site (http://edchiryoyaku.info/ccimdb), figuring that a phone call and fax from a broker beats all the on-line time in the world. We come up with two dozen CCIM designees in Grand Rapids. We also find some brokers via PikeNet (), which provides links to real estate professionals (such as appraisers, architects, and title companies), service providers, owners, and market-information sites.
Next, we want to quantify further how our comparables relate to our target property. To pinpoint the ABC Building's location, we use Yahoo! Maps (), an electronic location finder. Simply enter the address, city, state, and zip code and the search engine produces a street map with the ABC Building.
Pulling It Together
Now, time to gather our text, maps, charts, and market studies that have been downloaded, faxed, and researched via phone.
We e-mail our parts of the presentation to each other for review. Questionable sections are flagged and changes made. The entire file is compiled into one document, copied, bound, and shipped to our client, who is still functioning in the world of paper and pencils (ugh!).