“Because many CRE experts and investors cannot safely conduct property tours in person, they do so virtually,” says Morris, “and because they cannot negotiate and execute contracts in person, this has accelerated digitization and making online auctions a more viable option for her. "
MARINA DEL REY, CA – Online auctions have been accelerating the pace of commercial property for several years, and increasing numbers of buyers, sellers and brokers are realizing the value of technology in the COVID-19 era. GlobeSt.com spoke to Luke Morris, Co-Founder and Senior Product Manager of CREXi, a Los Angeles-based commercial real estate marketplace and technology platform to discuss the growing adoption of online auctions and the insights of advanced analytics on the industry.
“Since many CRE experts and investors cannot safely conduct property tours in person, they do so virtually. Not being able to negotiate and execute contracts in person has accelerated digitization and made online auctions a more viable option for them, ”he said.
Morris warns that it will take time for all or most of the transactions to be fully processed online. In the traditional world of CRE, many professionals are still used to signing contracts with a notary and personally viewing each property.
"Every buyer and broker is different, some are a little in the way," he said. "And you have to keep in mind that we don't sell iPhones on ebay. We're talking about multi-million dollar asset handling. Every day brokers and buyers alike are turning to more of these tools, no matter how long they've been in the industry. "
The rising tide of technology in general has fostered the growing adoption of online auctions, and therefore an understanding of how technology simplifies the traditionally lengthy, complex process. People are now welcoming the concept more after using residential listing platforms like Zillow and Trulia, claims Morris. And the pandemic has certainly forced the CRE industry to adapt.
"When entering COVID-19, no one was sure how it would affect site traffic (under CREXi), but the user volume is actually higher than it was before COVID," said Morris.
When you have over 400,000 entries and over a million unique monthly users, an online CRE platform can tell a lot with search traffic alone. Morris says apartment buildings, single-tenant net leases (STNL), and industrial distribution, including cold storage, are doing very well. Grocery stores and other retail stores for everyday needs also remain strong.
"A CVS with more than 10 years of lease, as you can imagine, has very heavy traffic, but there is still constant traffic to office real estate and hospitality deals," he said. "There is currently a lot of CRE capital on the sidelines. Online auctions make it easier for this money to come into play despite the many challenges in the market."