There are online services that allow people to rent space in other people’s apartments and services to let them take a drive in other people’s cars, but renting office space still almost exclusively requires hiring a broker who can negotiate a deal with another broker.
For companies inking large, long-term deals that isn’t likely to change. But for those seeking smaller, shorter-term deals Jones Lang LaSalle, the global real estate services and brokerage firm that now goes by its initials, JLL, is launching HiRise next month in Washington.
The idea behind HiRise somewhat resembles that behind Airbnb, the vacation rental service, and Uber, the car-sharing service: landlords with small amounts of vacant space can post terms online and prospective tenants can lease the room over the Web, rather than hiring a broker.
Though they attract little attention, small spaces make up the vast majority of commercial leasing in America. According to JLL, there are 500,000 tenants in spaces under 5,000 feet nationally, comprising about 80 percent of all the country’s tenants. In all, the small leases total 211 million square feet and have an aggregate value of around $19 billion.
And yet, many senior real estate brokers typically spend little time on such deals. JLL tends to keep close tabs on of the 7,500 D.C.-area leases of more than 50,000 square feet, said David Adams, managing director at JLL, but a small percentage of the 25,00o or more local leases of under 5,000 square feet attract the same attention. The landlords are the same way.
“Time is money from their perspective,” Adams said, who created HiRise with colleagues Andy O’Brien and Alex Lassar. “That landlord is working on their next 50,000-square-foot deal — the next big hole in their middle. That’s how they pay their mortgage or their investors.”
Signing a two-year commercial lease is a much larger agreement than renting someone’s apartment for the weekend through Airbnb, but JLL is still trying to provide for speedy, online-only transactions, by encouraging landlords to shorten their leasing documents and allowing tenants to upload required insurance documents. Adams said he hopes everyone from landlords with sprawling portfolios to individual companies looking to sublet space will use it.
“The idea with HiRise is the speed to occupancy, because many of our smaller tenants and even our corporate tenants want to move more quickly,” Adams said.
JLL is making the program open to anyone, including all of its competitors in the brokerage world.
Even though Adams and his team have begun showing off the platform to brokers and landlords in the D.C. area, a half dozen of the biggest leasing agents and executives all declined to comment on the record when asked about HiRise. Some said they weren’t clear on the business model; others didn’t want to damage relationships with JLL. What will really matter is whether they begin using the service when it launches next month.
Follow Jonathan O’Connell on Twitter: @oconnellpostbiz