JLL Launches Marketplace for Small Space

WASHINGTON, DC—JLL has launched an platform called HiRise that is meant to connect small-sized tenants and landlords online to fill space of less than 5,000 square feet.

The platform is aimed a group of tenants that JLL says has been underserved in the market. "This is meant to be a complement to the existing marketplace," says Andy O'Brien, HiRise co-founder and senior vice president at JLL. The tenants the site is targeting are very small -- for example, they might be tech companies graduating from the co-working space with perhaps 20 people on their payroll. "These companies are limited to sublets right now, which is not always the best choice for them," he tells GlobeSt.com.

The site has launched with available office space in the Washington DC area but JLL eventually plans to expand it to other cities.

The site shows the tenant its options for space in the city. For example, at 1872 K St., NW, there are 85 "seats" available at a rent of $6,000 per month. Currently HiRise features office space 10 neighborhoods and five submarkets, including Georgetown, Crystal City and Alexandria, Virginia.

The site then guides the tenant through the lease and other processes ordinarily performed by the broker, such as helping it determine exactly how much space the firm actually needs. The lease can be completed online and the fees paid once the deal is inked.

HiRise is not a broker; the site calls itself a "fully transactional marketplace."

 An Open Marketplace

What that means is that HiRise is open to all brokers, O'Brien says, with properties from other brokers, such as CBRE, Lincoln Property and Douglas Development listed on the site alongside JLL's listings. That doesn't necessarily mean the listing brokers from other companies will miss out on their commissions, he adds. The general sense O'Brien has gotten from property owners is that they view HiRise as another vertical to advertise their property -- not as a great way to save a few bucks to avoid paying the listing brokers. "I would say 99% of the owners listing on HiRise are still compensating listing brokers," he says.

Generating Fees

Tenants that use the site pay a monthly fee to JLL. Property owners are not asked to pay JLL up front, O'Brien explains, given how small these leases are. O'Brien said it was impossible at this point to put a dollar amount on the revenue HiRise would generate for JLL. "We only launched yesterday." Also, he noted, JLL expects uptake to spread through the Mid-Atlantic within weeks and then roll out nationally, making such an estimate even harder to calculate.

Disruption -- And Efficiencies

HiRise represents an interesting development -- which is the application of technology to what has traditionally been a face-to-face process.

It also poses a possible competitive threat to the industry as well; after all, there are brokers that do work with small leases.

That, however, is the story of technology. It is almost always a disruptor with winners and losers.

Included in the former category would be the tenants, especially small companies that are otherwise shut out of the market's efficiencies -- or simply don't have the time to tour a building. This process, JLL says, takes about seven days from start to finish. 

Technology, it has also been observed, has a nasty tendency to wind up disrupting the disruptors too. For example, in the case of HiRise, might the tenants use the site to view the space available on the market and instead of paying the fee, circumvent the site and go directly to the property owner? It is possible, Aaron Rinaca, product director of HiRise, tells GlobeSt.com.

Rinaca was hired from Living Social -- the type of company, at least in its early days, HiRise wants to target. "The site was built with the idea that tenants wanted a very fast and simple way of leasing space -- it's primary point is speed to occupancy," Rinaca says.  "And we wanted to help our landlord partners lease their unused space in any way possible. So we hope the majority of users will use the site in that manner."

That said, there is nothing to stop tenants from contacting the building owner directly about the space, Rinaca continues -- after all, the property owner's contact information is right there. "If the tenant wants to go down the full negotiation, traditional path of leasing space they are free to do so."

JLL, though, doesn't completely lose out, he adds. Either way, "in the landlord's eyes we are bringing them valid tenants. Hopefully that will mean they will bring us more space to lease, which will result in more transactions in the long run."

GlobeSt.com updated this story Friday morning.