Internet makes strange bedfellows

Real Estate Weekly, June 21, 2000 by Elaine Misonzhnik

In an effort to use the Internet's business potential to the fullest, 13 prominent real estate companies have joined forces to form the Office Technology Consortium--an organization that aspires to improve the quality of the service and lower the operating costs for its members. The Consortium, which includes Boston Properties, Crescent Real Estate Equities Company, and the Mack-Cali Realty Corporation, among others, will use the real estate-related online services to find the latest information on available properties, the best deals on equipment and office supplies, etc.

According to Darryl Freling, senior director of acquisitions at Mack-Cali Realty, the idea for the Consortium first appeared about eight weeks ago, when the representatives of all of the firms involved were in a meeting together. The subject of the conversation turned to the Internet, and it became obvious that most of the companies present were being approached by the same online services with proposals on how to improve their business.

"We were in the same room together, looking at these proposals," Freling remembers, "and we thought that it would make a lot of sense to explore this as a group. There's a lot of opportunity in technology and we all agreed that we may benefit from it on a collective basis."

In Freling's view, the Consortium is a great opportunity for everyone involved: "Acting as a group, buying the same kinds of products, we will make the entire process more efficient. All of the transactions will now be coordinated, we will use electronic forms that have great speed and eliminate the need for excessive paperwork -- it is bound to be a profitable enterprise. In addition, our collective size and energy will allow us to negotiate better deals."

At this point, the Consortium has two new programs to focus on, the Leasing Exchange and the Landlord Procurement Exchange. The former will give the firms' customers access to online information when searching for commercial space, while the latter will allow the members of the Consortium to get better prices on needed equipment. The current objective, in Freling's words, is "a collective evaluation of alternative online space listings and making a decision on which one we will use, and undergoing the same process with the landlord procurement services."

The Consortium is proceeding with caution, however: first testing the waters in the most obvious areas, but eventually the firms hope to expand the sphere of their online operations. "We chose the two areas that we knew made sense," Freling said. "As we work through those, we will probably come upon different ways in which the business could be improved. We will just have to wait and see."

Committees are currently working on the Leasing Exchange and the Landlord Procurement Exchange, and the Office Technology Consortium is expected to be fully functional by the end of this year.