Floorly is a comprehensive real estate platform for commercial property leasing. It provides a transparent mechanism for application and price negotiations. Floorly is a digital instrument for the rapidly changing retail landscape.
Previously the retail mantra was location, location, location. According to Deloitte, the changing nature of real estate dictates a new mantra — location, experience, and analytics. Let’s dive deeper into the commercial leasing industry to see how Floorly can help.
The last couple of years was full of dramatic retail headlines, as flagships of the industry announced employment cuts, store closures, and project failures. If we look beyond those media frenzy, it is clear that the industry is transforming. Retail is actively reinventing itself with traditional drivers of growth are in decline. The new technologies are shaping up the sector. Online continues to drive the competition in the industry, and while some companies are flourishing, the late adopters are quickly going out of business.
The retail industry is under significant pressure. Most retailers experience a substantial decline in margins with rising costs and weakening demand. The industry is undergoing a shift from store-based retail to an increasingly online shopping experience. Shoppers have spoken, they want to purchase products online on their smartphones. Thus, it is not a surprise that the net worth of Amazon reached $810 billion this year, making it the most expensive public company in the world.
Nevertheless, this online revolution is not the final nail in the coffin of the industry. Customer behavior might have changed, but the recent technological advancements can help retailers to adapt to them. It has become pressing for commercial real estate companies to prioritize tenants and end-users’ needs and embrace the alliance with Proptech.
When you decide to lease or rent out a commercial lot, you will inevitably encounter the real estate agent. There is no comprehensive online platform where one would communicate directly with an interested party; you have to deal with an intermediary.
In retail real estate, you usually list your property on an MLS or portal, like Costar and Zillow. You send this listing to the website and get exposure in exchange for money. Most of the listing websites on the market have limited functionality and act as advertisement boards. Tenants used them to assist their research or get the contacts of the real estate agency. Landlords have to juggle countless listing websites, various agencies, and representatives. Brokers and agents remain the crucial intermediary, not only the point of contact. In many cities, they have a monopoly, exclusive access to big malls, and significant commercial spaces. They control the negotiations and the final price for the lease. This situation creates an unnecessary burden for both parties. Tenants have to pay extra for their lease, while landlords have to cut a substantial part of their profits to the agents. Floorly aims to remove this excessive intermediate from the negotiations, eliminating friction and extra costs.
There is a significant knowledge asymmetry between the end-users and the real estate agents.
Most listing services provide an incomplete assessment of the market. Their restricted functionality generates insufficient data points. You see the listing, photos, and description of the property, and that is it. You have no idea if the property gets rented out for how much it was rented out, etc. Estimates that are based on the listing prices are inherently flawed. The asking prices are modified a couple of times during negotiations, which is not reflected in statistics of the popular listing websites. That creates an incomplete market picture for renters and landlords. The real estate agents are the kingmakers, and all the inquiries have to go through their vetting process. They own the finish line and have the power to alter the negotiations process and set the final price. Tenants do not know how in demand is the property they are applying for, while landlords have a hard time determining the real market price of their rental. These negotiations are blindfolded with applicants engaging in under the table bidding wars.