GLENN LOWSON FOR THE GLOBE AND MAIL
Interested in office space? Retail venues? Multi-family dwellings? Online sites can cut the legwork
By Grant Buckler
The real estate business has always involved lots of legwork, but Greg McPhie says he is spending less time in the field and more in front of computers these days.
So are his clients.
"More and more, our investor clients are doing their own homework before they come to see us," says Mr. McPhie, managing partner for British Columbia at NAI Commercial Vancouver, a unit of NAI Global, the Princeton, N.J.-based network of commercial real- estate firms. "They come better armed."
Online listings of properties for sale or lease - which came later to commercial real estate than to the residential market - have simplified investing in this sector.
"I think it's made it simpler to do better research so that you can get some better information," says Bonnie Prior, general manager of the Commercial Council of the Canadian Real Estate Association, or CREA, based in Ottawa.
Before websites such as ICX.ca,÷ which was launched in 2003 by CREA and now lists nearly 90,000 commercial properties for sale and lease across the country, investors interested in multiple locations needed to contact many realtors, Ms. Prior says. ICX.ca is "a one-stop shop," she says.
"It covers the country from one side to the other, [although] it is certainly not a complete list of everything that's available." The search capabilities make it easy for investors to find properties that interest them.
"They can look by property type, they can look by location, they can see what the different kinds of prices are in different locations across the country," Ms. Prior says.
Would-be investors can limit their searches to categories such as office, industrial, retail, multi-family dwellings, vacant land or agricultural property. They can specify the amount of space they need, parking and even such details as the type of construction and electrical service.
Several U.S. companies operate online directories of commercial property. Not all list Canadian properties, but one that does is San Francisco-based LoopNet.com,÷ which launched in 1995. It now claims more than 3 million registered members and more than $535-billion (U.S.) worth of property available for sale. More than 900,000 users visit the site each month.
Mike Manning, LoopNet's vice-president of marketing, says a commercial real estate broker founded LoopNet because, at the time, "there weren't good ways of sharing information within the commercial real-estate sector," Mr. Manning says. "Most of it was personal networks."
The site has a sizable number of Canadian listings. "Canada is clearly our No. 2 market after the U.S.," Mr. Manning says.
Most of LoopNet's listings are in North America, but buyers can come from anywhere, and they do.
"We also see a lot of searches originating from outside North America for North American properties," Mr. Manning notes. Online services are especially valuable to foreign investors who can use them to research distant properties without having to travel. Besides allowing investors to find specific properties, LoopNet has tools that can help with general market research. For example, the site lists recent sales, which visitors can filter by market to get a sense of price trends. In addition, a service connects would-be buyers with commercial real-estate brokers.
Real-estate investors have other resources to draw on. Those interested in Ontario properties can turn to 2Ontario.com,÷ a site created by the provincial ministries of Economic Development and International Trade and Investment, the Ontario Investment and Trade Centre, and the Ontario Real Estate Association. It lists available commercial properties in the province.
Albertafirst.com÷ serves a similar function for that province with help from the Alberta Real Estate Association.
Other useful online resources for real-estate investors include federal and provincial government sites that provide demographic information and other useful market data, Ms. Prior says.
Brokers such as NAI Commercial use online tools extensively, Mr. McPhie says, including ICX.ca, LoopNet, and their own and competitors' websites. "We are quite plugged in to all kinds of electronic data sources."
While many buyers also use the sites, Mr. McPhie says quite a few still rely on their brokers to do research for them.
John Anderson, a commercial broker and co-owner of Century 21 Advantage Commercial in Red Deer, Alta., says his firm's website gets plenty of traffic but "we're not near what the residential market is" when it comes to buyers doing their homework online.
Mr. Anderson also warns that even large sites such as ICX.ca and LoopNet don't cover all the listings. Some large brokers list properties only on their own websites, he says, so investors who rely on one service will miss opportunities.
While some sites for stock-market investors aim to help individuals manage their portfolios without help from advisers and brokers, real-estate investment sites go nowhere near that far. Real-estate buyers still need brokers when they are ready to purchase, Mr. Manning says.
But online information has made commercial real-estate investing less of an insiders' game and reduced research drudgery.
"I think we have opened it up more broadly as an investment category," Mr. Manning says, "because the information is more widely available now."
Special to The Globe and Mail