Corporate giants back real estate exchange
IBM, Bank of America and Prudential Insurance take stakes in start-up NetStruxr and plan to funnel some $3 billion worth of real estate transactions through it annually.
Aiming to provide an easier and cheaper way for businesses to locate property and then purchase or lease it, the three corporate giants helped San Francisco-based NetStruxr develop a new trading exchange. The computer maker, the bank and the insurance company have taken ownership stakes in NetStruxr and plan collectively to funnel approximately $3 billion worth of real estate transactions through it annually.
The financial terms of the investments were not disclosed.
NetStruxr, which was founded in 1999, provides buyers and sellers with a Web-based transaction system called SpaceDirect. SpaceDirect, which is available now, is designed to help corporate real estate professionals locate property, purchase or lease the space, and manage the transaction via the Web. The new exchange will run on technology provided by IBM.
NetStruxr isn't the only exchange targeting the real estate industry. Investment bank Goldman Sachs is also developing an online marketplace that will allow participants in the commercial real estate leasing and sales industry to transact business over the Internet.
Trading exchanges have recently grown popular among a number of companies and industries, large and small. Exchanges that link a company's partners and suppliers via the Net are expected to dramatically reduce purchasing costs and eliminate the heaps of paperwork typically involved in the buying process.
A wide range of players, from high-tech companies to financial services organizations, have made strides in the area. IBM has been active with a number of other trading exchanges in the works, either solo or through its partnership with software makers Ariba and i2 Technologies.
Prior to joining forces with NetStruxr, the three companies said they had been exploring the development of their own exchange to serve the needs of corporate real estate buyers and sellers. Senior real estate executives from each company worked closely with NetStruxr to test the site and further develop the design and other features, the companies said.
Together, the companies aim to help corporate real estate brokers spend less time closing a deal. In turn, landlords will be able to view current and forward-looking property requests from corporate brokers, with the opportunity to better match their needs and reduce time and effort handling the transaction.