On May 2, 118 Manhattan real-estate firms announced that they could not work together–even to attract apartment buyers. The firms said they would disable their fledging joint Web site, a failed attempt at a comprehensive listing of available property in the city.
What they didn’t say was that, while they were squabbling over how to share information, The New York Times had essentially stolen the whole endeavor out from under them and forged a plan to make it extremely profitable.
Before to their announcement, the brokerages had severed their relationship with Michael Gabriel, a 31-year-old onetime apartment-guide author who designed and maintained the site. In March, Mr. Gabriel signed a three-year exclusive deal with the New York Times Company to use the technology he’d created for the brokerages to revamp the newspaper’s online real-estate listings.
Christine Mohan, senior manager of public relations for the Times Company, confirmed that Mr. Gabriel was scheduled to deliver his system to the company on June 1 and that the new listings would be launched in “mid- to late June.” She said the Times Company was still courting “partners” for the project, which would be accessible from http://www.nytimes.com.
When asked about The Times ‘ plans given the real-estate industry’s Web site situation, Ms. Mohan said, “Obviously, we’ve been monitoring the industry’s discussions.” (In fact, the paper broke the news of the industry Web site’s failure on May 3.)
And the real-estate industry is keeping a close eye on The Times ‘ project. “The good news is that it’s being started by what appears to be a neutral party–meaning not a specific brokerage firm–which eliminates the need for the turf wars we’ve experienced,” said Barbara Corcoran. “The bad news is that as advertisers we’re clients of The Times , and that will set up its own list of suspicions.”
Mr. Gabriel said he signed a deal with The Times because he couldn’t wait any longer for the warring brokerages to give him a long-term commitment. “A contract was never signed. The disagreement within the group delayed the process so long that another deal came up for us,” he said. Neither he nor Ms. Mohan would attach a dollar figure to their deal.
The Times Web site, which will reach outside of Manhattan to the metropolitan area, will charge $30 per listing and have “real-time” capability, according to Mr. Gabriel. Users will have “a direct real-time connection to The New York Times online,” said Mr. Gabriel. This will be the first public real-estate listing of its kind in the city–updateable all day, every day. Where the industry Web site only attracted “in the neighborhood of 50,000 visitors every month with no advertising,” this would be a project with the opportunity to be very lucrative.
A high-school graduate from Newburgh, N.Y., who has been capitalizing on the real-estate business for years, Mr. Gabriel started out publishing the Gabriel’s Guides to apartment buying and renting in New York. He broke onto the Web in 1998, founding Gabriels.net Inc., and he maintains online listings for more than 50 cities nationwide for America Online’s Neighborhood Profile section. He said he has “spent years developing for the needs of” the Manhattan real-estate industry’s Web site. “That’s part of the appeal for The New York Times .”
The real-estate community got wind of Mr. Gabriel when he developed a brand of software called Real Estate Exchange in 1998 and started selling it to individual companies. Last August, they hired him to work on their shopper-friendly Web site (now called http://www.nyhomesearch.com). In operation in every other single metropolitan area, such a thing–known as a multiple listing service–is normally one huge billboard for real-estate companies. Not in Manhattan. In this city, where secret deals lead to fattened commissions, brokers consider it trouble: an impingement on egos and power, not to mention profits. The result was a stalemate on almost everything from membership dues to graphic design.
In interviews, most brokers downplayed The Times ‘ site, which seeks to eventually advertise itself–as the brokers’ site was supposed to–as the most complete online resource for home shoppers, according to Mr. Gabriel. “We don’t care what software The Times uses,” said Pam Liebman, president of the Corcoran Group. “It’s a different thing.”
But, as Mr. Gabriel has wired things, he and The Times stand to seriously trump the real-estate community. Whereas the individual firms refuse to share with each other, they have all been willing to share with The Times –in fact, the practice has long been institutionalized. One executive admitted, “I’d much rather pay The New York Times ” than try to work with the competition. All the real-estate firms advertise about 50 percent of the properties they’re representing in the paper every Sunday anyway, and 75 to 80 percent of those ads are also already posted on The Times ‘ Web site, albeit in a no-frills way.
The Times site will also do away with the battle between the haves and have-nots of Mr. Gabriel’s Real Estate Exchange software, called REX, which seems to have been one of the issues that did in the industry Web site. In creating that site, Mr. Gabriel made it especially compatible with the REX system. While Mr. Gabriel says that more than 100 brokerages in the city subscribe to REX, the top two firms, Corcoran and Douglas Elliman, use Homeseekers.com instead. When they found themselves at a disadvantage on their own Web site, the firms complained to Mr. Gabriel and their colleagues.
While REX allowed other brokerages to download property listings from the joint Web site directly into their own computer systems, “we had to wait to receive listings directly from the brokerage firm,” said Corcoran’s Ms. Liebman, who’s on the board of the New York Multiple Listing Service Task Force, which oversaw the joint Web site.
A more serious issue was that even non-members of the Web site who had REX could download information from the site. In fact, Mr. Gabriel advertised this feature. “He was taking data from the public site and making it available on his internal site without the knowledge and permission of the board,” Ms. Liebman said.
In response, Mr. Gabriel said that everyone he sold REX to were a members of the original industry group. He said that on The Times ‘ site, REX users will not have an advantage, but that all users would have to buy compatible software.
Nonetheless, the REX issue seems to have caused a potentially serious rift between some brokerages and Mr. Gabriel. “A number of firms were concerned that the information they were providing Michael Gabriel could be transmitted to his REX system, and they didn’t want to be a part of his REX system,” said Steven Spinola, president of the Real Estate Board of New York and the chief negotiator on the joint Web site. “It is unlikely that Michael Gabriel will be involved in any future efforts that the industry is going to pursue.”
And the industry does plan to try again, Mr. Spinola said, with a “new and improved Web site” listing 90 to 95 percent of the city’s available apartments, which is slated to appear within three to six months.
Said one NYMLS board member, in retrospect: “We were very stupid never to put Michael Gabriel on contract.”