Haas School of Business Real Estate September 18, 2000

1. Haas School of Business Real Estate September 18, 2000

2. Agenda • Location- It Still Matters • Positioning products and services in the new economy • How is the Real Estate Industry adapting to B2B Market Place?

3. Locational Requirements will always be relevant for E-Commerce Customer Requirements: Virtual Requirements: Channel Partners Integration Market Perception Customers Physical Requirements: Organization Infrastructure Resources

4. Large Markets Dominate Internet Usage Millions of Minutes of Usage Nielsen/ Net Ratings July 2000

5. Location will always matter Today's transformation to a financial, business and service economy has resulted in a significant number of jobs specially designed to control and manage the activities of the new urban centers.

6. Bandwidth availability is limited

7. B2B solutions are layered infrastructures based on Business Requirements Graphic front end Information Flow and Appearance- 1% of Focus for B2B Web Interface Front-end Application Modules & Databases often Supported by the ERP: Oracle, SAP, Ariba, CommerceOne E-Commerce Modules Data Bases; ERPs B2B Focus Area 99% “BackEnd” Process Improvements Specific to Your Business Business Goals and Objectives Physical Infrastructure, Data Flow, Bandwidth, Access Cisco Hardware Infrastructure “Pay Attention to Your Backend ”

8. The new business power

9. E-Commerce Convergence B2B B2C ARPA Net WWW Technology Waves B2B creates new revenue streams, saves costs and enables businesses to better manage their inventories….The internet facilitates a single destination for commerce, content and community that wrap around end-users and compel them to come back Goldman Sachs Today

10. B2B Solutions evolve with Business Goals Property Listing Asset Management Services Securitization AEC Transaction Execution Property Management Solutions Financing • Customer Management • Exchanges • Knowledge Management • Work Process • Self Service Applications Network Infrastructure Modules & Custom Apps Enterprise Resource Planning: Oracle & SAP A consultant’s chart

11. Marketing Commerce Service Support Sales/Channel Management Provisioning Solutions Framework Customers’ Goals Cisco/ KPMG Business Solutions Expertise Customer Care Supply Chain Management Workforce Optimization HR OrderFulfillment Finance ProductLife Cycle Procure- ment ProductService IT Services Travel andExpense e-Learning Web Foundation: Workflow, Publishing, Data Access, Community The Cisco Architecture Technical Solutions and Products e.g. Routers, Switches, Data, Voice, Video, Internet Architecture

12. KPMG|Cisco e-Commerce Methodology Supply Chain Mgmt Customer Care Workforce Optimization e Learning readySet.GO Content Networking Multicast Security AVVID VPN Local/Distributed Director Quality of Service Networking Foundation • Cisco|KPMG • End to end delivery of services necessary for • client success • Solutions include Cisco architecture Exclusive commitment offers trusted partner

13. Integration Technology Is Important For All Firms -Forrester Source: Forrester Report: De-mystifying B2B Integration, September 2000

14. Online exchanges promise to unify suppliers with customers Customers Exchange/ Auction Transaction Processing 1:1 Marketing Market Hub Suppliers Service Providers e.g. Title, Credit Content Management Work Flow Management Suppliers "Channel Partners" XML Standards Listings Market Information Financing

15. Vertical hubs Coordination within narrow industries Industrial facilitators Nonproduction goods across several industries Commodity marts Raw materials across many industries Procurement malls Office supplies across all industries Four Types Of eMarketplaces Will Emerge By 2003 Commercial Construction; Homebuilding Oil/ Fuel Supplier/ Steel Source: Forrester Report: The e-Market Place Shakeout, August 2000

16. Industry Breakdown Of The Major eMarketplaces In 2003 -Forrester Source: Forrester Report: The e-Market Place Shakeout, August 2000

17. eMarketplaces Will Go Through A Three-Phase Shakeout -Forrester One Trillion $ Source: Forrester Report: The e-Market Place Shakeout, August 2000

18. Extroverted Panoramic • Any-to-any connectivity • Many trading partners with varying levels of sophistication Many • Multiple trading partners partners/ • Multiple internal apps and custom • Few unintegrated apps and legacy XML legacy apps to integrate systems • Intercompany process automation Requirements for B2B integration Quick Hit Introspective • Limited number of trading partners • Focused on internal app and Few process integration partners/ • Limited number of apps and legacy EDI systems • Limited B2B requirements and a small number of direct trading partners using EDI Few simple applications Many complex applications Complexity of internal application infrastructure Assess Project Requirements On Two Dimensions - Forrester Source: Forrester Report: The e-Market Place Shakeout, August 2000

19. Biased eMarketplaces Won’t Survive- Forrester Source: Forrester Report: The e-Market Place Shakeout, August 2000

20. B2B = RE/AEC Revenues Will your company get a piece of this US$25 Billion R.E. AEC market? 1.7% Of U.S. RE & Construction Industry 0.5% Of U.S. RE & Construction Industry Source: Goldman Sachs

21. The Potential for Efficiency is Driving B2B Adoption Forecast B2B Cost Savings vs. “BAM” costs Source: Goldman Sachs

22. RE/ Construction Industry has been an early adopter of B2B Top 7 U.S. Industries using the Internet by Percentage 1999 Source: Goldman Sachs

23. B2B Revenue Models and their potential for R.E. & AEC • Transactions: Buying & Selling Revenue:Deals: leasing, sales, financing • Auction Driven Commissions Revenue: Construction & Deals • Software Licensing Cost: Service provider Cost • Cost Savings Compensation Revenue: Property Management & Asset Management • Advertising Fees Revenue: Listing Fees • Content Subscriptions Revenue: Market data, cost benchmarks

24. VC Real Estate Sector Investments Brokerage & Banking lead VC investments Top 36 VCs reviewed Source: KPMG Research

25. Real Estate Sector Investments VCs have been investing in complementary real estate service offerings Source: KPMG Research

26. Technology Convergence: theRealm The power of the REALM is in the industry standard process-automation tools at the very heart of its e-business infrastructure. Tools that are already being used by thousands of real estate organizations around the globe to who own, finance, buy, sell, manage, service and value millions of leases, billions of square feet and trillions of dollars in real estate and loan value. theRealm The REALM is a Web site where proven industry tools, the rPOWERTM, vertical-specific e-commerce services, the rPROCESSTM, and industry-focused content, the rPULSETM, will come together to form the industry's only true e-processing hub. The REALM is a user-driven, user-friendly technology that will forever change the decision and management processes of rent collection, bill payment, product and services procurement, financing and investment. From theRealm Website

27. Technology Convergence: theRealm $135M 'Project Constellation' LaunchedSome of the real estate industry's top players have collaborated to form a real estate technology company and have committed a total of $135 million for investments in Internet, e-commerce and broadband enterprises. A management team is being assembled by the 11 founding members of Project Constellation, as it is called. The San Francisco Bay area-based company will seek to form, incubate and sponsor technology companies in the real estate field; buy interests in existing "best of breed" companies where synergies exist; and "act as an opportunistic consolidator across property sectors" in the real estate/technology arena. Project Constellation The founding membership consists of public real estate owners, service providers and financial firms-REITs AMB Property, Equity Office, Equity Residential, Simon Property and Spieker Properties; Kaufman & Broad Home Corp.; an e-commerce alliance recently formed by Jones Lang LaSalle, CB Richard Ellis and Trammell Crow; and Morgan Stanley Dean Witter and Chase H&Q Capital Partners, an affiliate of Chase Capital Partners. From Commercial Property News on line

28. Technology Convergence: CFN “CFNis building the premier portal for financial and health needs at work and at home. For corporations, CFN offers a suite of products that gives companies the most flexible and rapidly deployable employee and manager self-service solution for benefits and HR policies. CFN CFN offers one destination for learning about, applying and transacting for financial services.” From the CFN Website

29. CFN Group of Companies CFN's YouDecide.com transforms Internet purchases with a powerful... platform deliver[ing] integrated comparisons of multiple products and services from multiple providers. For corporate HR management, CFN's iExpert™ provides personalized answers to employees, managers, retirees and applicants on topics such as policies and procedures, benefits and compensation, and payroll. iClickthe industry's first Web-based employee/manager self-service solution - designed and deployed for two of our consulting customers. Health Pages is an online consumer health care service. We publish reader-friendly information on general health care topics and community-specific comparative information on physicians, hospitals, allied health professionals and health plans. Need to know the cost of a flat in London? Which school to choose in Hong Kong? Do you need a permit to work in France? How about health insurance in Brazil? We can help. Welcome to Living Abroad Easy Access From the CFN Website

30. Customers Locational Requirements will always be relevant for E-Commerce- but customer & virtual requirements will dominate Customer Requirements: Virtual Requirements: Channel Partners Integration Market Perception Physical Requirements: Organization Infrastructure Resources