Until recently, a big part of brokers' stock in trade was their knowledge of the market. In tight markets, they know which spaces are likely to come on the market. In markets glutted with space, they know which landlords are willing to make financial concessions to lease space. But that information is becoming more accessible to anyone willing to pay a price. Two national service companies, CoStar and RealtyIQ, collect information on property and transactions and make it available to online subscribers for a fee.
Brokers are also expensive.
The standard fee for an office transaction in New York is one-third of the first year's base rent, paid by the landlord. Top brokerage executives acknowledge that there may be some erosion of their business, particularly in markets for small office spaces. Nevertheless, at least one company is trying to circumvent brokers by using the Internet, offering a big cut in commissions as a lure. M. Myers Mermel, the president and co- founder, compares the venture to online stock trading.