Office Tech Consortium Focuses
on Leasing and Procurement

Interview... Eric Yopes is Managing Director - Investments for the Shorenstein Company, headquartered in San Francisco, CA, and a member of the Executive Committee of the Office Technology Consortium composed of thirteen leading commercial property companies. The twelve other Office Technology Consortium firms are Boston Properties, Brookfield, CarrAmerica, Crescent Real Estate Equities, Duke-Weeks Realty, Highwoods Realty, Hines, Mack-Cali, Oxford Properties, Prentiss Properties Trust, TrizecHahn and Vornado Realty Trust. Yopes responded to three e-mailed questions on June 20, 2000.

Pike: What's the mission of the Office Technology Consortium?

Yopes: To marshal the resources of major office property companies to identify and pursue products, services, applications and other business opportunities that can contribute to enhanced operating processes, service levels, tenant satisfaction and asset value. The members believe that collective efforts are more likely to result in finding or creating enterprises that will provide "best practices" solutions. Our initial areas of focus are online leasing and procurement.

Pike: Which real estate dot-coms are most likely to succeed?

Yopes:: Successful dot-coms in this area will likely address an existing perceived need for landlords, tenants or other real estate constituencies in a way that measurably improves the outcome in terms of cost, efficiency, or subjective experience. Simplicity and flexibility will be key since benefits will always be measured against the difficulty of adoption and the degree to which any new way of doing things can be readily integrated with existing processes. One-dimensional tools (e.g., a loan rate quotation system) will probably lose out to models that address the deeper relationships and business methods surrounding a certain activity (e.g., a loan transaction management system that includes due diligence, documentation and regulatory compliance tools).

Pike: How does the Shorenstein Company underwrite a lease with a start-up Internet tenant?

Yopes: We do relatively few leases with start-ups. When we do, we look at the business model, but do not try to make a full-blown assessment. We rely heavily on the quality of a company's venture capital and other sponsorship, and its capitalization. We generally agree to very low concessions to start-ups, and require large letters of credit as security. The letter of credit process itself is a useful screen, since the issuing bank will have undertaken a close financial and business review.

--Peter