1. LoopNet, Reaction Web Deal Offers Functionality and Design for the Online Brokerage Space
San Francisco-based online commercial real estate marketplace LoopNet announced last month the acquisition of Denver-based Internet design and online solutions firm Reaction Web in a deal that promises to bring robust functionality—including customized Web sites, secure online “deal” and “due diligence” rooms, and private property marketing tools—to the suite of LoopNet solutions.
Reaction Web general manager Mike Mockus sat down with Multifamily Executive senior editor Chris Wood this week to discuss the acquisition, the relative strengths of online property marketing in the multifamily industry, and the prospect of creating a completely digital asset trading platform.
MFE: How did Reaction Web first get involved in the multifamily real estate sector?
MOCKUS: My partner and I started the business in 1997 as a general Web design firm to improve how Web sites interact and provide services to customers. In 1999, we landed a commercial brokerage team—a Grubb & Elllis multifamily team here in Denver. Grubb & Ellis took notice of our work, and by 2001, we were their preferred vendor nationally. In just a couple of years, we had taken that business into a much bigger multifamily footprint and re-branded ourselves as a commercial real estate Web design and services firm. Since then, about 90 percent of our business has been on the brokerage side, with the remainder coming from developers and owner/operators.
MFE: What areas of online real estate marketing could be improved?
MOCKUS: At our very first meeting, we were bidding against three or four other firms, and they picked us because we were focused not as much on how the site superficially looked, but how it worked operationally for the user and what the client experience would be like. We wanted ease of use with customized functionality that might include investor registration for access to property specifics, or confidentiality agreements that could be executed online. We made those things happen. It was technology, driven by the needs of the clients, and it was centered on offering and streamlining the digital components of the transaction process.
Credit: LoopNet, Inc.
Reaction Web co-founder and general manger Mike Mockus will continue manning the helm under new paretn company LoopNet, Inc.
MFE: How have those tools developed into the LoopNet offerings available to brokers?
MOCKUS: All of our efforts are to make the life of the broker more efficient. We have a Listing Lab marketing component that includes digital teaser pages, full offering packages, confidentiality agreements, offering memorandums, deeper qualification tools, and the release of due diligence information such as lease documents, tax documents, and other investor qualification tools. All of that occurs in our online due diligence war rooms.
MFE: Your start was in multifamily. How do you anticipate your client roster will shake out on the LoopNet platform?
MOCKUS: We have been more heavily focused on multifamily and retail investment broker clients, although we do some leasing business as well. So we’re probably 30 percent multifamily, 30 percent retail, with the remainder divided up amongst industrial, mixed-use, office, land, and other real estate categories. LoopNet has such a large, diverse client base that we’ll probably see a broader exposure to different commercial real estate classes, and a broader exposure to smaller, private capital deals as opposed to larger, $20 million-plus institutional deals.
MFE: Is the end game plan to create an entirely electronic property trading platform?
MOCKUS: It is an electronic platform already, but its purpose is to make brokers more efficient, not replace them in the transactional process. We think our services are there to empower brokers. You will always need dedicated, experienced professionals to see these deals through from start to end. We want to provide an electronic platform that enables broker creativity and continues to make brokers more efficient and provide their client with better service as opposed to pushing paper.