Insignia and J.P. Morgan Have Joined the Waves of Businesses Turning to E-Technology Initiatives

NEW YORK CITY-CapitalThinking Inc., a New York-based company that originally marketed itself as an online brokerage, is now no longer accepting deal inquiries and has redesigned its Web site to proclaim itself a purveyor of software. J.P. Morgan Mortgage Capital Inc., a subsidiary of New York-based J.P. Morgan, has signed on as the first customer for these new services. At the same time, New York’s Insignia Financial Group has signed on with Project Octane, the transaction platform of an alliance of real estate giants. These developments follow on the heels of a busy summer of new e-technology initiatives and projects that are revolutionizing the way the real estate business manages its transactions.

Over the summer a wave of announcements about companies offering new infrastructures and forming new initiatives and the integration of these by major real estate companies were made. One such announcement came in August as Insignia Financial Group’s subsidiary Douglas Elliman formed a joint venture with the Corcoran Group to develop a multiple listing system for Manhattan. The system would attempt to centralize the residential brokerage community through one Web site. Halstead Property Company also committed to becoming a member of the project. The MSL is scheduled to be up and open for new members in early 2001.

Insignia followed this announcement in late September with news that it was opening a retail business, through its Realty One group, that would act as an information center where customers could surf the Internet in a cyber café-like environment. The new virtual resource bank real estate office is in the warehouse district of Cleveland. The new office will serve as a testing ground for the prototype business and will spread across the country if successful.

Insignia Financial Group then announced that it was joining CB Richard Ellis, Jones Lang LaSalle and Trammell Crow Co. in Project Octane. Octane was launched in March as an alliance to further the development of an on-line service delivery platform that would supply procurement, transaction management and enterprise resource planning platforms. Octane plans to launch a transaction services platform within the first quarter of 2001. It will function as a hardware and software application service provider offering an Internet based marketplace, communication, collaboration and process management tool for the commercial real estate industry.

J.P. Morgan has signed on as the first customer of another application service provider, CapitalThinking Inc., offering an Internet-enabled technology platform for lenders and commercial banking firms. The ASP offering is called Bluewire and is a software system customers integrate into their infrastructures to enable the automation of the loan process from the indicative quotation stage through the closing process. Document sharing is made possible over the Internet to those with appropriate access, so that deals may be tracked, enabling more efficient deal flow management.

“Customers can rent our software system from us,” CapitalThinking’s CEO and co-founder Heather Shively tells GlobeSt.com. “It’s like getting a health club membership rather than building a gym for yourself.”

She says of the close of their own transaction-based business, “Our staff of almost 30 technology developers worked with the credit managers pulling the deals through the transom of our site and were using these deals to get feedback on how the system worked. Until we stopped taking in new deal inquiries we handled $39 million in five deals and are working on closing five deals that were begun before we closed this end of our business. We incorporated on Bastille Day, July 14, of 1999 and were using the transactions to re-engineer our software. We’ve always been changing and improving our software, because our ultimate goal was to be a software provider.”

Bluewire is constantly being redeveloped, Shively says. She also adds that the value of the software is that it was developed with professionals in the brokering business; she herself was once a broker before joining with Charles H. Ferguson in founding CapitalThinking. Ferguson had founded Vermeer Technologies, Inc., which sold its FrontPage Web page development software to Microsoft in 1996. Shively reports that CapitalThinking has been named on Forbes’ top 200 list and InfoWorld’s top 100 list.

“This is evidence of commercial real estate developments themselves,” Shively says of Bluewire and all of the recent developments. “There has been a very rapid adoption of technology.”