Demystifying Real Estate Auctions with Steven Jacobs, President at Ten-X

Nate Smoyer (00:02.126)
Stephen, welcome to the show.

Steven Jacobs (00:03.978)
Thank you.

Nate Smoyer (00:05.358)
I'm glad to have you here, excited. We were able to pull this together and I think we're gonna have a fun conversation. I love getting a chance to talk commercial real estate because I don't get a chance to do that very often, mostly on the residential side. And this is a unique aspect of it in that we're gonna be covering the topic of auctions in real estate. So excited for that. For everyone listening here, I've got Stephen Jacobs. He's currently president of 10X. And I think he's got really interesting,

career path with 10X originally brought into the business, recruited into the business in 2016, I believe, right? In 2016 was made CEO of the business in 2017 after selling the business to private equity investor. And then again, in 2020 led the business to be sold to CoStar and now president of the company. What an interesting path to be able to help build a business and sell it.

twice and still be running it. And for those who are not familiar, 10X is the leading online commercial real estate auction platform. They work with brokers, sellers, buyers, leveraging data and tech, as well as additional marketing tools to expand property visibility and decrease the time to close through auctions. And I thought for our conversation today, maybe we'll start with the highest of high level here. I'll throw.

what may be a factor myth, you tell me. But I thought auctions was just for the sheriff sale, was just for the property that couldn't be lended against the distressed fire sales because of a business closing. Is that true or false?

Steven Jacobs (01:53.258)
It understood I understand why you would think that but it's a hundred percent false There are that is definitely the way you describe, you know fire sales and things like that do go on And they do go on in the Rezzi Marketplace and they do go on in the commercial marketplace. However, you know auction and real estate has always had this default that there's something wrong with the real estate and it's always been fascinating to me because I

I think about like auctions and I think about Sotheby's, based in New York that they auction Matisse's and Degas's and paintings for millions and sometimes hundreds of millions of dollars, right? And it's not perceived as a distress painting or if you're a car collector into cars like I am, there's a company called Mecham Auto Auction and they...

They sell a lot of different kinds of vehicles, but a lot of classics, right? So when a 1964 Mustang convertible is on the auction block, it's a classic, right? It's not a distressed car. So it's fascinating to me that with real estate, there's just this default into distress. I understand why, because the distress comes from in a distressed defined as a distressed asset, the definition of distress.

Nate Smoyer (02:58.094)
Is it cherry red?

Nate Smoyer (03:04.75)
Mm -hmm.

Steven Jacobs (03:19.69)
Really is a distress loan right alone on a piece of real estate res your commercial that has gone into default The real estate bricks and bricks and mortar hasn't isn't in default. It's the somebody didn't pay their mortgage Right somebody defaulted on their payment. So all of a sudden it becomes a distressed asset It doesn't mean the real estate's distressed and I think that's why it's gotten that reputation nate is is people just

Nate Smoyer (03:34.99)
Mm -hmm.

Steven Jacobs (03:47.786)
don't think about the bricks and mortar, they think about the tag of it's a problem. And at the end of the day, an auction is just a tactic. It's a way of transacting real estate. Just like if somebody hires a commercial real estate broker to do it offline, somebody decides to do a FSBO for sale by owner, right? It's a tactic, it's a way. It just so happens what we've done in our businesses, we've designed a transaction.

where running the auction allows the seller to transact what we like to say twice as fast and with a ton more certainty. So there's only positives that come out of auctioning it on our platform versus that negative connotation if that makes sense.

Nate Smoyer (04:37.326)
It does. I mean, from my experience growing up, I remember auctions. I have a very few, very distinct memories. One was I grew up in a twin house. So for, for those who are not familiar with East coast residential real estate twin is just two homes conjoined one, one firewall. So they share one wall, but they're very, they're separate parcels and my neighbor's house went up for sheriff sale. So I remember there being like learning.

what that was, you know, growing up. The other one was what used to be, it's closed since, but it was the world's largest Pennsylvania Dutch outdoor market of all things you could possibly create a category for. But they had auctions every Friday night. You could buy a car for 50 bucks every single weekend if you wanted to. There was also a lot of other stuff you could buy, not necessarily that you wanted to. But I think a lot of times that's the exposure that some people have.

but since then, you know, I have seen and I agree with you, like there's lots of higher end auctions. I think very famously the Banksy auction where the painting was destroyed through the paper shredder, you know, as soon as it sold.

Steven Jacobs (05:53.386)
Yeah, I think that was when that happened with I don't know. I know that when in Vegas something went through one of his multi million dollar paintings. I don't know if it's the same thing, but you mentioned Pennsylvania when you said side by side. I was going to say is was it a row house because I'm familiar with from the East Coast, right? So I got asking you when that happened and I know it was a long time ago. Was this other side of the house distressed right? It probably.

Nate Smoyer (06:12.398)
You have rohomes?

Nate Smoyer (06:21.166)
It was.

Steven Jacobs (06:22.506)
It was distress. So did they, they distress meaning they didn't pay or distress that they let it go or physical things they didn't take care of it.

Nate Smoyer (06:29.71)
It was, there was certainly deferred maintenance within the home. And then they basically they left the house. They just picked up and left and left it unpaid.

Steven Jacobs (06:39.018)
Right. But at some point they probably picked up and left because they didn't pay and they were going to get foreclosed out and that's why it became an auction. Right. But somebody could come in, buy that, fix the deferred maintenance on the bricks and mortar and it's a totally fine piece of real estate. Right. And that was my point about like, you know, I'm listen, I always say like, I'm guilty sometimes of it too. I one day a couple of years ago, I opened up my mailbox and was one of these glossy flyers of a house.

Nate Smoyer (06:44.654)
Correct. Yep. Yep.

Nate Smoyer (06:53.966)
Correct, yeah.

Steven Jacobs (07:07.434)
that was going to auction around the corner from me. It was interesting because that house had been on the market for sale for about a year. And every Sunday I'd see the broker with his little black Range Rover parked outside with his open house, right? And thank God that poor, really an agent, Rezzy's agent, like that poor agent because, you know, but I got this thing in the mail and it was like an auction. I'm like, what's wrong with the house? And then I said, wait a minute, wait a minute. There's nothing wrong with the house. What was wrong with the house was the price, right? So these people put this...

house on the market that was significantly overpriced, which is why it wasn't selling. And people do that all the time with Rezzy and commercial, but it doesn't mean there's a problem with the real estate. So, you know, when we started 10X, now about 13 years ago, not quite just approaching 13 years ago, it was a market that was distressed because it was 2011 and the Great Recession was in 2008.

Nate Smoyer (07:48.686)
Yeah.

Steven Jacobs (08:05.066)
and it took two years and I was working, I'm not a young guy, right? I was working in that period of time. Like I was living in that great recession in real estate. And between 2008, when everything collapsed, it took a couple of years for the real estate CRE marketplace to kind of get a grasp of things and then start to say, okay,

we're a lender and we foreclosed on this, we need to sell it. Because lenders don't lend, they don't have a loan to own. They don't lend to own it, right? So they want to dispose of it and they want to get it off their books. So in 2010, 11, a majority of assets that were for sale were distressed from a financial standpoint, not again, physical. And of course, yes, there are examples of the physical like your row house where somebody walks away.

Nate Smoyer (08:53.006)
Mm -hmm.

Steven Jacobs (08:58.762)
from their mortgage, they don't take care of the property, and it does go into a deferred maintenance situation. But typically it's fixable, right? Typically it's, and they don't want to put the money in because it's good money after bad. But anyways, 10X as a business was started because we realized that there was a sense of urgency from owners, from lenders, from servicers that needed to dispose assets very quickly, get them off their books, and for the highest...

price they could get. And that's what auctions tend to do. So when you are at Mecham or Sotheby's or even your example of the $50 stuff, an auction, and there's been tons of theory written about this. In fact, there was a Nobel Prize issued a few years ago to a couple of laureates that wrote about the auction, and they won the Nobel Prize. And it's very simple. It's when you...

go into an auction format and you bring a market to it, you tend to get the highest best price. So that's where the business started. So back then, one would say 98 % of our revenue was from the distressed marketplace. But guess what happened from 2011 to where we are today? The marketplace changed and the market changed and it was a recovery, many, many years recovery, right? And a lot of those distressed assets were sold or resolved.

Nate Smoyer (10:09.262)
Mm -hmm.

Nate Smoyer (10:20.302)
Mm -hmm.

Steven Jacobs (10:25.802)
Right? So we pivoted our business throughout the years and now 95 % of our revenue comes from non -distressed assets. So they come from a building that I would own with you. That's a, you know, maybe it's a small office building with a bunch of doctors in it and there's nothing wrong with that building. And it's like, Hey, we want to sell it. We want to get the highest price. We want to sell it fast because we're moving on for, to another investment or it's just time to sell it. And that is where,

The majority of our business comes from the last several years. Given the market shift that we've been in for the last 20 months with interest rates, we are starting to see more of what you would call, I like to call it stressed situations, stressed owners, where they haven't defaulted on a mortgage, but they have a mortgage that might be maturing and they can't get their refinance. We can talk about that as we go along.

Nate Smoyer (11:18.03)
Mm -hmm.

Nate Smoyer (11:22.318)
Yeah, yeah. So now I want to touch on, because you guys have now been able to close more than 10 ,000 properties on the platform. So starting with the distress, moving to properties that are distressed over the years, 33 billion in value has transacted on the platform. What are some of the key lessons you've seen and observed along the way that help sellers be successful using an auction format and a platform?

Steven Jacobs (11:52.106)
That's a really good question. So there's a couple of things. So every asset, every deal that comes onto Tenex requires a third party broker. So it's a combination of the seller. I'm going to answer your question. It's the seller and the broker. So number one, it's pricing. So whether it's an auction or not, pricing has to be market pricing.

And unless you have an asset that is a significant trophy asset that, you know, I use local examples. So like if you're out here in Southern California, it could be a Rodeo Drive retail building, right? Or it could be closer to where I live, Laguna Beach. It could be on Forest Street, which is the main street. If you're down in Florida, it could be on Worth Avenue, right? In Palm Beach, right? You have an asset like that. I like to call those,

You know, they're irreplaceable assets and you can get a premium for that. But the generic day to day, you have to be priced right from, and if you're a seller that really is motivated to sell and you're priced right, we're going to be successful. And then also where the broker comes in is we're not a brokerage shop. So the broker is hired by the seller to sell the asset. We are a technology platform that helps the broker and the seller speed up the transaction. And also we do a big,

global marketing, so that brings a marketplace. So those are really two of the things we do. So oftentimes we do get brokers that don't follow up on leads, that come in and sign a CA and go into the data room and they don't follow up. And that is going to hurt the ability to transact the asset, which has nothing to do with 10X. If you were the owner and just hired that broker and that broker, the asset wasn't on 10X and they didn't call back leads,

Right, it's not gonna sell so it's not complicated But I would say the one thing is pricing got to have pricing right you also I would say just add another thing is you have to Have the best due diligence documents available So when somebody is looking at the asset they have the utmost updated rent roll the most updated property condition reports if there's any litigation what's going on with the property, right all of that has to be

Steven Jacobs (14:16.202)
best possible data. And there's a very high likely chance it will try.

Nate Smoyer (14:24.622)
Got it. And so, you know, the real estate, both commercial and residential has been some really interesting times. We've seen some very, a lot more fluidity than we're used to seeing. We've had some very large sharp downturns and then up in the last few years. Of course, interest rates change dramatically. So there's a lot of things that are in flux for some investors.

Now you guys are part of or a company of CoStar, so you have access to a ton of data. One of the leading data providers, of course, in commercial real estate. I'm curious what data are you looking at and monitoring from the auctions side that's helping you understand and point out some of the trends within commercial real estate, and if you can share some of those trends of what you're seeing in terms of what's selling, who's buying, and that sort of thing.

Steven Jacobs (15:23.978)
So regardless of the market blip or the market reset or whatever we want to call it that's tied to the interest rates that really increased, we've always looked, even before we were owned by CoStar, we subscribed to CoStar. TenX Subscribe was a subscriber to their data. And one of the things that I always look at and we always look at is, CoStar employs a team of economists that study what is going on in the marketplace. And...

they publish those reports. We do as being part of the company have more of a inside track to those, if you will. But what is trading? What asset classes are trading more than others? Where are cap rates? How are they moving? How are they moving in a specific market? I mean, it's very market driven. So what's happening maybe in South Florida could be different than happening in Chicago. So we look at all of that and we then...

Determine by looking at that we then look at the inventory that comes to 10x to say hey We just got a seller that wants to bring in an office building that's 50 % occupied in the suburbs of Chicago, right? We we look at the data to say here's The sale volume of that right here's the price points of that and that helps us determine

whether we want to be, whether we can be successful on taking on that asset to our platform. At the end of the day, we are here to help supercharge a transaction, right? We don't want to take on assets that don't have any chance of trading because it's a waste of time for the seller, the broker, for 10X. And it's a waste of money because 10X spends real marketing money and human capital, right? On these, getting these deals done, right? So,

We're very careful. So we use that costar data. We also that's more of internal. We also publish in 10x when we have an asset for sale. What we have is called a listing detail page. Right. And anybody can go on our website and see that. And we bring in the comp information so that our buyers investors that may not subscribe to costar have a sense of what's trading in the market what the rents are per square foot etc. Whatever is applicable.

Nate Smoyer (17:34.19)
Mm -hmm.

Steven Jacobs (17:44.074)
So we've since being part of CoStar, we brought that into our LDP pages, which are all listing pages and share that with the investors. So that's kind of how we use data on a regular basis.

Nate Smoyer (17:59.374)
Now, is there a certain asset class or property type that is best fit or seems to be selling best using the auction format?

Steven Jacobs (18:10.186)
So historically, we have done really well with what's called limited service hotels. So if you think of, you know, if you do any business travel and you're staying at maybe a Hilton or a Hyatt, that is what we call limited service. So maybe there's no room service, et cetera, et cetera. We do really well in that space. I think part of it is that we tend to attract

We used to call it the unknown buyer. So we tend to, with our marketing, we tend to attract the non go -to investors. here are the five investors that want that Hilton, right? Well, we captured them, but then we capture, you know, 5 ,000 other ones that might want that asset, right? So our marketing goes global, right? So I think we do really well with that. That's why we do well. But I will tell you, honestly,

We've done really well with office in the last year. And one would say, that's crazy because nobody wants office. But again, it goes back to what do we have? How do we price it? And if it's priced right and realistically, there are investors that are buying office, but they're buying them priced correctly. And in office, it's very, a lot of exposure, right? So, you know, a 20 % occupied office building that was built in the 1980s is going to warrant a certain value.

Nate Smoyer (19:36.078)
Mm -hmm.

Steven Jacobs (19:36.234)
versus an 80 % occupied building outside my window, you know, that was built two years ago is gonna, you know, warrant another kind of pricing. And then again, something in the middle, which maybe it's a 10 year old office building that's sort of half occupied, but it's a great location warrants another. So it has to be realistic. You know, owners have to be realistic about what they own, which then translates to pricing. I can't say it enough, which then is communicated out to the marketplace.

Nate Smoyer (20:00.59)
Sure.

Steven Jacobs (20:06.218)
to say, yeah, this is a great deal because you're buying, I mean, we traded, this was probably in the fall, we traded, it was probably about a 15 year old office property. There was a couple of buildings, sort of campus -like in New Jersey that was about 10 years old. And then during the pandemic, they invested a ton of money to reposition. We sold that, we had a bidding war on that asset, totally vacant by the way, because ultimately the price was less than replacement.

So when someone looks at that to say I can pick up this 10 year old fully renovated office building less than replacement cost Like it's a win because I can attract a tenant. I'm now the best option in the market, right? So there are people still going to work in offices, right? And there are still companies looking for office space So if I can now be the lowest price per square foot rent because my basis is the lowest I win So that comes back to pricing and motivation

Nate Smoyer (20:42.798)
Mm -hmm.

Nate Smoyer (21:04.782)
Is it fascinating? I'm so curious. Is that the primary use of people buying office buildings? Is they think it's gonna be used for office or are you seeing, are you getting whiffs of whether they're gonna be doing some conversions? I know that's the most common talked about is why don't we just convert all these office buildings to residential?

Steven Jacobs (21:19.786)
there.

Yeah, yeah, so it's interesting. So we have a big client and I was just with them about a month ago and they were telling me in their portfolio there's 220 office properties. They hired a development consultant to come in and review what assets were they could convert. And again, that 220 there are assets that are 100 % occupied with no issues and then there's some with zero.

Less than 10 % of that portfolio was convertible, meaning it physically was able to go in. One could physically go in and invest a ton of money. Less than 10%. And then that's the physical plan, right? And then they said,

Nate Smoyer (22:08.27)
That's what's possible, not even what's feasible.

Steven Jacobs (22:11.53)
And then you've got to go into the city and say, I need to get a zoning change or I need to get the permits, right? It's a long haul. So I like, and this question is interesting to me because we moved two years ago into the building we're in, which is in, you know, in Orange County. We were in a previous building that was probably built in the nineties, a two -story standalone building. We left. It's yet to be leased. It cannot be converted to Rezzy or anything else.

it's an office building and that's all it's ever going to be. Now could there be a different use in there? Could it be a laboratory? Maybe, right? I mean when you think about like could it be yeah, could be storage but there's an upstairs without an elevator so I don't know, right? But is there an alternative use? Probably not, right? And that's a great example of this immediate and even in New York City, like I'm from New York City, I just lived there 23 years, right? You know, there's a lot of

Nate Smoyer (22:50.158)
Storage.

Steven Jacobs (23:10.89)
Office buildings that say we're gonna convert if you're in a high -rise down in Wall Street or mid you depending on the floorplate It's all about the floorplate because you can't have units without windows, right? There's a lot of mid block old buildings that are not occupied and can't convert right so The whole conversion to resi is not as easy It's not an easy answer but There are companies

Nate Smoyer (23:36.398)
Mm -hmm.

Steven Jacobs (23:40.746)
More and more companies are going back to the office, right? And there are companies that are leasing space. But what they're doing in office is, it's called the, you know, nothing new, the flight to quality, right? So they're going from maybe a C building or a B minus or a B building, and they're getting a great deal in an A building, or an A minus, and they're shrinking their footprint, but they're moving around. We're in a complex here. I think there's like 10,

Brand new like four story all glass modern buildings fully leased Every single one of them is fully leased and they're big buildings. They're you know 150 000 square feet each building Zero vacancy. So but like us we came from sort of a b minus to an a

Nate Smoyer (24:25.326)
Right. That's fascinating. So in a world where, you know, a lot of the conversation around PropTech, we talk about simplifying the transaction. You hear a lot of platforms of, you know, click to buy or make it easy to buy, you know, take out the middleman. But you mentioned earlier, you still require brokers as part of every transaction. Can you break down a little bit more? So like, why is the broker so key to these transactions? And what are some of the tools and services you're

enabling the broker with through the platform.

Steven Jacobs (24:58.218)
So, you know, a typical TAM, you know, in a sort of normalized market, Nate, is about $600 billion of transactions. Just to look at 2023 for a minute, 2023 was $300 billion. It was the lowest amount of transactions since the Great Recession, all right? Nonetheless, we're talking about $300, $400, $500, $600 billion, right? And...

These are bricks and mortar assets and in commercial real estate Really their investments. So when an investor is buying a building sure you've got investors out there that are users so you've got people that like hey, I need a two -story flex building because I produce a product and I need you know, that's a user right you're always going to have that but of course, so they're buying it for the use They're not if they were gonna rent it

They wouldn't care about the investment. So they're still got the same mindset as an investor. That's like, I'm going to buy a four story. I'm going to buy a mid service hotel, or I'm going to buy a retail shopping center, a neighborhood shopping center. They're investments, right? I'm buying it for X. I'm going to invest Y and I'm going to get X return. They're not emotional. Like they're not the house you're going to live in and raise your kids. So it's all about math. It's all about numbers, right? So the reason that a broker is important is because.

a broker does have the Rolodex, if you will, and the relationships of the investors, not just in the country, but globally, some of them do, to say, hey, I've got this investment opportunity in Chicago that you're gonna make 15%. We don't do that. That's not what 10X does, because we're not brokers, right? So the role for the broker is still very relevant, okay? Technology...

The goal of at least for us, for our technology is to make the broker's job as simple as possible. Make the broker's job as easy as possible. And I was a partner and owner of a firm for many, many years where 50 % of our business was investment sales. And another 50 % were investments and other things, right? All commercial real estate related. And I've got a lot of friends and peers that are brokers in the industry. And where they're at is,

Steven Jacobs (27:26.41)
Yes, they had this property management technology. There's all kinds of technology, accounting technology and software, right? But to do a transaction, they're still doing the transaction like they did a hundred years ago, right? You're still, it's very manual. You know, when a broker says we're going to run an auction, they're not running an auction. They're saying on June 5th, I want everybody to send their bids in right by six o 'clock. And they, you know, and the investors upload them on a scanner and they send them in on an email and that

Brokers reviewing them and then having a conversation with the seller etc. Etc. Right. Our goal is is to To automate the whole process for that So I love to use this example and this is technology that we're in the middle building is that if I'm a broker and I want to go for a run on the treadmill at Equinox, right and I'm on that tread and everybody's addicted to their phones today So the phone, you know, you're running but you got your phone in the holder right in front of you, right? You get the TV thing?

Nate Smoyer (28:07.374)
Mm -hmm.

Steven Jacobs (28:24.394)
And all of a sudden you see a pop up on your phone that says, you know, John Doe just signed a CA on 123 Elm Street, right? And I'm the agent and I can click on that and I can see, and this is, you know, being part of CoStar, I could see the whole profile for John Doe and say that 123 Elm Street is in Chicago. I don't know why I'm using Chicago today, I guess. I guess. It's a great city, right? I spent a lot of time there, right? So it's in Chicago.

Nate Smoyer (28:47.182)
It's a great market for office.

Steven Jacobs (28:52.394)
They could click on John Doe and say, John Doe owns 30 assets in the Chicago Midwest. So they press that, they forward it to their analyst in their office and the analyst, you got to call this guy because he's a great potential investor for our property at 123 Elm Street, right? So that makes the broker's job easier. Without technology, they're getting somebody that's going to go in, they're calling, they're going on their temp, their, their,

Nate Smoyer (28:58.99)
Hmm.

Steven Jacobs (29:20.522)
you know system that maybe they're going into CoStar, they're seeing who it is, they're calling them, interviewing them, figuring out, right? So that's just one simple example besides all the other dashboards that they can use on their phone and they can see where they are with the marketing. So it's really just to make their job easier, faster and what we also do is take out the uncertainty. So in the offline world need,

Nate Smoyer (29:41.422)
Mm -hmm.

Steven Jacobs (29:49.962)
You know, once you go through the process, you find your investor, you sign a contract as a due diligence period, right? And once, and I've been involved in this for 30 years, right? So once a contract is signed, regardless of whether using 10X or any kind of technology, your 30 day due diligence, you're as a seller and a broker, you're sitting there crossing your fingers that the seller is going to decide to go forward with their transaction. A lot of times they will, but a lot of times they're also going to come back.

Nate Smoyer (29:55.277)
Mm -hmm.

Steven Jacobs (30:19.946)
right in the third week or right before they have to and say, we want to go forward with it. We're in contract for 10 million. We found all the stuff. So we're prepared to go forward with nine. Right. So then you're renegotiating the contract and the seller could say, sorry, I'm not selling it for less than 10. You know, you saw that the parking lot needed to be repaid. You saw, we gave you a property condition report that said the HVAC was 30 years old. Right. So no, we're not going to do a retrade. And

Nate Smoyer (30:33.038)
Mm -hmm.

Steven Jacobs (30:46.89)
My experience is you're in the high 90 percentile of retrades typically again unless you're dealing with one of those trophy trophy things where you'd say here's the price That's it. If you don't want it, we don't care because there's 10 other people right? So what we do at 10x is because the due diligence is done before the auction We're providing all those materials upfront So when someone comes and buys on the platform, they've already

Nate Smoyer (30:57.198)
Right.

Steven Jacobs (31:12.586)
They've lost the opportunity to retrade. They have the opportunity to pay what they want to pay based on their knowledge, right? And that's their price. And if they get outbid, they get outbid fair and square. And if they buy it at the price they like and they sign a contract, you close in 30 days. There is no renegotiation of the price. And we have a sub 2 % fallout rate once a contract sign, which just means if somebody signs in, they do put up hard money, non -refundable.

less than 2 % walk away because who really walks away from hard money? Not a lot of people.

Nate Smoyer (31:49.614)
Unless you really, that's part of, I don't know who does that, honestly.

Steven Jacobs (31:52.682)
Something could change maybe your partner God forbid passes away or you know something there's some economic Emergency, right and you just say I can't move forward the transaction that does happen time to time but very little so because of that what we say is we it's more certainty you're more certain not to have a fallout and you're more certain not to have a retrade and By the way brokers love that and sellers love

Nate Smoyer (31:56.91)
Like life happens.

Nate Smoyer (32:02.958)
Yeah.

Nate Smoyer (32:22.286)
Cool. See, we're going to jump to the bottom of the show here for a segment I like to call For the Future. For the Future is when I get to ask each guest who comes on the show to give their best predictions based on the following four questions. Are you ready to play?

Steven Jacobs (32:35.594)
ready I don't know the questions but go for it we'll see. Can I just eat the fifth? Yeah.

Nate Smoyer (32:38.082)
All right, here we go. Easy one to start off with. Number one, what does 10X look like one year from now?

Steven Jacobs (32:46.922)
Well, one year from now, we have, I think, probably three to five big releases of new product that I think puts that ease into the brokers hands. And I think the growth of 10X really is tied to product technology, as well as sellers, the bits, the bid ask we call it between what a seller wants and what the market's going to pay.

that's starting to tighten up and that's getting healthy. It's starting to get healthier. So I think in a year we're gonna see more inventory because we've got the right pricing and more product for our brokers to use to help them with their transaction.

Nate Smoyer (33:32.878)
Number two, will the percent of commercial property sold via auction, so this is with 10X and other solutions on the market, will the percent of commercial property sold via auction increase or decrease within the next several years on an annual basis, and why do you think this?

Steven Jacobs (33:51.914)
Well, I'm gonna say increase. Maybe I'm a little biased about what we do, but I'm going to say increase because technology is taking over. In the commercial real estate space, it's one of the slower spaces to adopt, but there is more and more adoption. We're seeing more and more adoption every year that goes by. And I do believe...

Again, with the release of technology and product and brokers saying, wow, this is just a very easy way to do this. And I want to get paid twice as fast and I get rid of all those retraits and stuff. This is a better way. And I do think the more business we do and the more transaction volume that we do and other solutions do, it starts to eradicate that.

that topic we talked about early on about the, you know, options being for, you know, problematic properties, right? The more we do, the more you communicate, the more you put out the message that we just traded this great asset in Chicago, this great asset in Miami, right? It really just starts to resonate. So I do say increase over the next few years, for sure.

Nate Smoyer (35:15.406)
Number three here on For the Future, what's one industry trend you think will continue, but you wish would go away?

Steven Jacobs (35:23.902)
that's a good one.

Steven Jacobs (35:28.522)
Ugh.

I have to think about that. I don't know if I have time. An industry trend, I mean, an industry trend right now is there's no financing. This is not a great answer, by the way, but the industry trend right now is there's very little financing. There's not no financing, but there's very little. It's low loan to value, so 50, 60%. And that is hurting the transaction overall, like transaction marketplace, like I said last year was, you know,

Nate Smoyer (35:53.998)
Mm -hmm.

Steven Jacobs (35:57.802)
literally half of what we did the year before, right? Down 50%. So I like that trend to go away because when lenders start to lend more, it does increase transaction volume and it brings investors back more to make deals.

Nate Smoyer (36:18.83)
All right, the last one here on Forth of Future. What's one thing you believe will dramatically change or fade away in real estate as a result of tech advances?

Steven Jacobs (36:29.994)
I think over time what's going to fade away is the manual way that a transaction is completed. As it is today, if you are an investor, you are going to your keyboard and you are getting data, whether you're getting it from CoStar or wherever, you need to get that data, right? And then you need underwriting tools. Like for example, for Office, there is an underwriting tool that's called...

I'm having a moment here, Argus, right? So you're using technology and using various tools and different algorithms to create, to look at values, right? So you're already at your keyboard. You're already doing your research on your screen. You're looking at the asset on your screen, whether it's on Tenix or not, you're looking at the neighborhood, you're looking at all these things. So the ability to actually do the transaction from your keyboard, that's, I believe, where we're going.

We believe at CoStar that digitizing real estate is the future. And because you're already halfway there and using sort of a suite of different things from all over the place, we do believe that we can be the place, the one place to go for your data, for your marketing, for your transaction.

Nate Smoyer (37:47.694)
Stephen, thanks for coming on the show. Glad we were able to block out this time to have this discussion about what 10X is doing in the commercial real estate market, specifically with its auction platform. For those who wanna get in touch with you and or learn more about 10X, where did they go and how do they do that?

Steven Jacobs (38:06.25)
So the best place to go to learn about us is our URL, 10x .com. Also, if you are a subscriber to CoStar or you are on LoopNet, we are integrated into both LoopNet and CoStar. So you can go to LoopNet. If you're looking for leasing or you're looking for for sale, you see everything. You see everything that's for sale, and you see everything that's also upcoming options in both LoopNet and CoStar.

And anybody that wants to get in touch with me, it's just my name at tinex .com and they can email me. And if there's anybody that's interested in learning more about, I will then lead them to our sales team. We have an internal team that's regionally based and have representation in every state.

Nate Smoyer (38:55.374)
Appreciate it. Thank you very much again for your time today, Stephen. This has been a lot of fun. We'll catch you later.

Steven Jacobs (38:59.338)
Thank you, Nate. Yeah, thanks. Same here. Thank you.