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
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.
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