The American Real Estate Exchange is a San Francisco-based company that believes it has found the way to create a national market in commercial properties.
Neither a franchise operation nor a multi-branched broker, Amrex bills itself as a "formal communications network similar to the security exchanges, bond markets and commodities markets for large scale real estate buyers and sellers." Its executives like to speak of their "trading floor," their "Big Board," and even a "Dow Jones of real estate prices."
Among some of the recent listings in the Amrex newsletter:
"Buyer has $3 million cash for down payment. Wants to purchase industrial park, office building, or shopping center in $12 million range. Will buy anywhere nationally. Prepared to respond fast."
"Trade or buy shopping centers. Triple net properties, prefer Eastern or Southwestern U.S. and Florida. Prefer cap rate of 10 per cent. Will accept less on Triple A free standing store."
"237-acre rail-oriented industrial site in Baltimore/Washington area. Next to center of major new town under development by three major corporations. Develop now or hold for gain. By owner: $11,000 per acre. Investor terms as negotiated, will consider lease or exchange ."
In its literature, Amrex claims as members or clients corporations such as Ford Motor Co., Bank of America, Coldwell Banker, the Equitable Life Assurance Society and Hornblower and Weeks. Its 700 members pay $270 a year to receive the newsletter, Amrex says.
Several of those listed on the firm's roster say they are not members or clients, however. A spokesman for Coldwell Banker in San Francisco said, "We saw no particular value in joining (when solicited); we were larger and had more connections. Besides," he continued, "who needs it? I've got more buyers than I know what to do with."
Arthur Sonnenblick, of the Sonnenblick-Goldman mortgage banking company in New York, denies that his firm joined, even though it is listed. "It's the silliest idea in the world," he said. "You can't sell real estate like a commodity."
A Ford Motor spokesman said his company listed two properties with Amrex but neither was sold.
Jackson declined to furnish information about how successful Amrex is in selling properties. He would say only that he expects $100 million in sales to result from special invitation-only sales sessions in the first half of 1977. At an average price of $4 million per property, that works out to about 25 transactions, or $3.1 in commissions.
Within the past year Amrex has opened offices in Houston, Atlanta and New York, with Chicago and Los Angeles offices set to open before the end of the year. Also announced are offices in Toronto, Montreal, Vancouver, London and Hong Kong.
In this country it has conducted nearly a score of highly publicized "market days:" invitation only, $175-ahead, all-day gatherings at posh hotels and country clubs where buyers and sellers meet and negotiate. The last such session was held at the Waldorf Astoria in New York in June, with $1.5 billion in property for sale the lure. The next market day is scheduled for Tuesday in San Francisco.
Despite a marketing campaign to equate it with the national securities exchanges, Amrex is essentially a computer dating service for buyers and sellers. Properties are not boutht or sold or auctioned by or at the exchange. So-called "trading floors" are set up where interested persons can get information - the coded data goes on the "Big Board" - about prospective deals and where they can meet to initiate negotiations with one another.
When a transaction is made directly or indirectly as a result of its contacts, Amrex collects a commission of 0.5 per cent, or $50,000 on the $1 million of a sale ($1 million is the minimum price deal it will handle), and 0.25 per cent on the remainder of the sale price. Amerx's commission, really a finder's fee, is separate from and in addition to customary broker's fees.
Amrex is the brainchild of Gerald J. Jackson, 42, a San Franciscan with a background in marketing, communication and development. He is also the founder of the National Real Estate Exchange, a similar business which collapsed in the early 1970s.
Jackson told The Wall Street Journal at the time that the exchange's failure was due to exorbitant fees and the fact that it was "more of a directory service." But San Francisco realtors questioned said the only properties members were willing to list with Amrex were "dogs" - those they could not move themselves.
Asked how Amrex intends to avoid this pitfall, Jackson replied that he had an unwritten understanding with clients that they would list good properties as well as "dogs." He claims that, with its recent expansion, Amrex will soon have enough clients so that any seller's good property listed in its computer is bound to be bid up in price by prospective buyers.
At the moment Amrex has 1,300 properties listed, although Jackson says he currently has access to 5,000. Besides being a time saver for principals and brokers, Amrex guarantees confidentiality so that properties cannot be "shopped." Knowledge that a property on the market is not moving can depress its price. Jackson claims Amrex's coding gurads against leaks from computer print-outs of a company's listings that are sent daily to its branch offices.