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Networking: Dot-com vendors help developers, retailers forge links

By Edmund Mander

Location-net’s Web site offers a wealth of demographic data that can help retailers devise merchandising strategies for particular locales.

For retailers and landlords, the opportunities for meeting over the Internet are growing fast.

One new Web site, Location-net.com, is letting retailers and landlords instantly see who and where their customers are at any location in the United States, and is promising a match made, if not in heaven, at least in cyberspace. Another Web site, TenantMix.com, aims to give landlords and brokers a complete list of retailers, detailing their real estate requirements. Others, like Storetrax.com and RealtyIQ.com, provide an online listing of vacant real estate across the country.

Sausalito, Calif.-based Location-net Corp., which specializes in demographics and consumer spending patterns, provides subscribers with a detailed description of their customers, and indicates exactly which areas have populations reflecting that profile. Among other things, it allows prospective tenants and landlords to compare each other’s customer profiles in order to get a good match.

“What used to take somebody hundreds of man-hours we can deliver now in minutes,” said Kathryn A. Huber, president, CEO and founder of the two-year-old company. “We’re offering data that is useful, relevant, easy to use and really has application to the industry.”

The company scrutinizes the spending habits and lifestyles of a retailer’s or landlord’s customers, offering not just demographic expertise, but substantial understanding of the retailing and development industry, according to A. Nicholas Javaras, executive vice president of marketing for Location-net.

“Nobody can do this,” said Javaras, who is former president and cofounder of Terranomics, the San Francisco-based retail brokerage firm. He also is a developer of The Shops at Riverwoods, a Provo, Utah, strip center that opened in 1998. “Very few people know how to do lifestyle segmentation of an area.”

Until recently, Location-net delivered its product in the form of written reports, but, as of this summer, clients can access much of the information via the Internet. Besides informing clients about the best location for stores, the data can help retailers devise merchandising plans and let them know which products are likely to sell best in a given area. Furthermore, the information enables them to pinpoint which areas in a market area are best to target in a direct-mail marketing campaign, Javaras said.

The company partly defines a client’s customer base according to the so-called Prizm Cluster devised in 1972 by Claritas, the San Diego-based marketing information firm. Claritas divided up the U.S. population into 62 lifestyles that include such labels as “Bohemian Mix,” “Urban Achievers,” “Urban Gold Coast” and “Hispanic.” The Bohemian Mix crowd, according to Prizm Cluster’s definition, uses call waiting, shops at Gap, has a rollover IRA, watches “Face the Nation” on television and reads Elle. Claritas itself has a Web site — www.claritas.com — where, at no cost, people can plug in a zip code and instantly find out the population mix of any area in the country.

Javaras is not the only one bringing retail expertise to Location-net. Investors include two of the shopping center industry’s most prominent retail real estate executives — Steve Kaplan and Jamie Bersani, vice president of real estate at Gap and vice president of real estate at The Limited, respectively. Another investor, Todd Star, is vice president of West Coast leasing for Los Angeles-based developer Westfield Corp. Huber is a former director of real estate (West Coast) for The Gymboree Corp., and was a partner at Terranomics.

The Web site, which was demonstrated at this year’s ICSC Spring Convention in Las Vegas, is scheduled to be up and running this summer, although the full range of the company’s services will not be available online until next year, Huber said. Clients pay between $7,000 and $20,000 a year, depending on the number of locations they have.

Customers signed up so far include Sears’ HomeLife Furniture, General Growth Properties, Chico’s and Smith & Hawken, the garden supply store.

In the meantime, TenantMix.com, a five-month old company based in Bethesda, Md., launched its Web site in mid-April.

“Our objective is to have a detailed profile on every multiunit retailer in the country,” said Brian McGowan, the company’s president and CEO. “It gives the property owners and brokers a direct link to the retailers.”

Besides providing a description of prospective tenants and their real estate and demographic requirements, the site also provides contact numbers for their real estate personnel. Users can seek tenants in a variety of ways: For instance, they can search by store name, merchandise category or by the tenant’s gross leasable area.

The site is of as much value to retailers as it is to landlords, McGowan added. “The benefit to the tenant, obviously, is that it gives them an outlet or a place to present all their information.”

Investors in the company also include some shopping center industry heavy hitters, McGowan said, although he added that he was not at liberty to name them at press time.

“We are backed by some very prominent owners and developers and retailers in the industry,” he said.

Clients, who are offered a free trial period, pay $60 to $100 a month, according to the size of the geographic area they cover. About 600 companies had signed up for a trial at press time, he added.

New York City-based RealtyIQ.com, on the other hand, provides a listing of vacant real estate. Landlords can describe their buildings down to the smallest detail, and even provide pictures, explained Nicole Starr, a member specialist at the Web site. RealtyIQ.com was created in March by RE/Locate, a nine-year-old real estate research firm.

“We’re still perfecting it,” Starr said, adding that already “thousands” of clients had signed up. Clients at press time were being offered a two-month free trial period, enabling them to both register properties and search the database.

Storetrax, also based in Bethesda, serves brokers and landlords by listing properties in more than 20 states — including more than 150 million square feet in the Washington-Philadelphia corridor — and has plans to roll out nationally. The company’s site lists space in centers owned by Simon Property Group, Kimco Realty Trust, PREIT Rubin, Kranzco Realty Trust and other major shopping center real estate investment trusts. It has offered prospective subscribers a six-month free trial.

But even though it gets easier every day for tenants and landlords to meet each other over the Internet, there is still a place, many say, for that traditional matchmaker — the broker.

“The rise of the Internet does not signal either the threat of wholesale disintermediation [jargon for “elimination of the middleman”] or even the diminution of commercial real estate brokers,” wrote John Stanfill, president, CEO and cofounder of PropertyFirst.com, an online commercial real estate firm, in an article he wrote last year for the quarterly Real Estate Issues magazine. “On the contrary, by intelligently leveraging the powerful capabilities of the Internet’s new breed of “virtual marketplaces … brokerages can significantly increase their value-added proposition and even further justify their commissions by improving overall service to customers.”

“Everyone will just get smarter and faster,” said Candace K. Rice, SCMD/CLS, senior vice president for leasing at Donahue Schriber, a Newport Beach, Calif.-based REIT specializing in shopping center development and management. Her company will continue to use a combination of brokers and Web sites in order to get deals done as efficiently as possible, she added. “I think competition is good, especially between commercial entities that broker shop space.”

Another advantage of the Web sites is that they are accessible 24 hours a day, she added.

Even the Web site creators themselves do not claim they will render brokers obsolete.

“There will continue to be a role for the broker in our industry,” said McGowan of TenantMix.com. “People cannot be replaced entirely.” It will, however, dispense with those brokers who are only prepared to provide their clients with bare bones information, he added.

Brokers are among Location-net’s customers, according to Huber.

“There’s been a continuous demand from the brokerage community for what we’re doing,” she said. “The brokerage community recognizes the technology is finally available that can help make them better at their job. They’ll have better information, which should enable them to do more deals and more successful deals.”