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With Little Expense, Studley Dips Toes Into the Internet

By MOTOKO RICH
Staff Reporter of THE WALL STREET JOURNAL

Sep 6, 2000

NEW YORK -- Adding its contribution to the growing market for deal-making Web sites, real-estate brokerage firm Julien J. Studley plans to launch TenantNet.com early next month.

With little fanfare, the boutique brokerage firm, which employs about 300 brokers in 15 cities, has developed a Web site where brokers and their tenant clients can calculate space needs, search for space and obtain referrals for brokers, furniture companies or architects. Currently, however, tenants will not be able to exchange leases with landlords online.

The site, which is catering mainly to tenants seeking 5,000 square feet or less, will launch first in New York. Currently, Studley generates less than 10% of its revenue from such small tenants. TenantNet includes a database of all office buildings in the 15 markets in which Studley operates, with details of each building's offerings on telecom services, Internet service providers and other technological amenities.

Unlike some other highly capitalized transaction-based Web companies, such as Zethus Inc., a Washington-based start-up being incubated by Goldman Sachs Group Inc., Studley has invested less than $1 million in TenantNet. Zethus plans to spend up to $50 million on its site, which should be operational by the first quarter of 2001.

Alison Lewis, senior vice president of online business development at Studley, says that although she expects tenants to use the new service, she doesn't expect them to eliminate the need for a broker. "You can provide information and market research but in the end we still believe that you need a broker to do the financial analysis and negotiating," says Ms. Lewis.

TenantNet will be available to tenants for free. Studley plans to make money by collecting commissions when its brokers help tenants complete lease transactions offline.

Ms. Lewis says the firm doesn't intend to cut its commissions for tenants who do some of their own work on TenantNet. "I don't believe you should start a business based on discounting," says Ms. Lewis. "If you provide a high quality service you don't have to discount your price." Other Web companies, like New York-based TenantWise.com, offer tenants brokerage services, but at a 60% discount.

Copyright 2000 Dow Jones & Company, Inc. All Rights Reserved.
 

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