Their seems to be a new technology offering for commercial real estate almost weekly these days and one I have been watching as of late is Compstak. The entrepreneurs behind Compstak are certain to get more attention from the industry after being featured in the Wall Street Journal today.
This start-up is tackling the industry practice among office leasing professionals of trading details of completed lease transactions. Since companies are not required to report details of lease transactions except in the case of public companies and in those instances you are only likely to see no more than the size and expiration date of the lease, this is considered valuable data to both tenant and landlord representatives.
The challenge as I see it is that historically office leasing professionals have operated under an unwritten code of being selective as to who they are willing to share these “lease comps” with. Most brokers are only willing to reciprocate with other professionals they know, like and trust, as the practice is very fraternal in nature. Office leasing professional won’t typically share lease comps with some residential real estate agent or even commercial brokers from different disciplines. The key to their success will be providing sufficient incentive to the professionals involved in these transactions to share the data.
Lease comps are a segment of the leasing market whose time for disruption may have come. I have seen CoStar Group try and get a handle on this data for several years only to find most leasing brokers unwilling to share accurate data to the general industry. In this case it appears the entrepreneurs behind this service understand the historical dynamics of this industry practice. I certainly agree with one of the founders quotes in the Wall Street Journal article, “If you think that [lease comps are] your only advantage, you’re probably not a very good broker,” but in my opinion therein lies the issue, “if you give an unqualified broker a few lease comps, many think they are.”