Consortiums help expand the pie, not divide it.

Forget the cutthroat competition of the past. This year's buzzword in the real estate industry is "collaboration," with companies joining forces to form consortiums aimed at speeding up the adoption of Internet commerce and other technological initiatives into the industry.

"Technological ventures are extremely expensive and companies can share the costs," said David Fries, executive vice president of e-business for AMB Property Corporation.

Some have argued that traditional real estate companies are forming the consortiums to fend off competition from dot-coms, which are offering services aimed at making traditional business practices more efficient and cost-effective.

"Some have asked, 'Is this more of a defensive strategy or a growth opportunity?"' said Mark Rose, chief innovation officer for Jones Lang Lasalle. "I see it as more of an opportunity."

Rose was the moderator for a panel discussing the new joint initiatives, a practice other industries implemented years ago, but the real industry has been slow to embrace. The panel discussion was one of seven held Nov. 6 at a conference entitled "The B2B E-Commerce Revolution: Real Estate and Construction." The event was sponsored by Pacific Americas Commerce & Technology and Columbia University and held at the Waldorf-Astoria Hotel.

Among consortiums formed recently is Project Octane, a joint effort by Jones Lang Lasalle, GB Richard Ellis, Trammel Crow Company, and Insignia/ESG. The group controls a combined 1.45 billion square feet of property, has 30,000 employees, 250,000 vendors, and 12,000 customers. "Scale is the key," said James Groch, president e-commerce & corporate development for Trammel Crow.

Seven of the nation's largest apartment real estate investment trusts recently formed a consortium to invest $17.3 million in equity investment in Santa Monica, Calif.-based Viva Group, Inc., a rental housing leasing exchange dot-coin. J.P. Morgan acted as the consortium's advisor in the transaction.

"The consortium represents more than 530,000 apartment units and in excess of 60 percent of the apartment REIT industry's total equity market capitalization," said Douglas Crocker II, Equity Residential's president and chief executive officer.

One of the reasons the real estate industry has had difficulty in adopting technological innovations is that the industry is widely fragmented. In industries with a few large companies that control the majority of market share -- to cite one example, the automobile industry -- it is easier to establish industry-wide consensus. By joining forces, larger companies can set standards that smaller companies can adopt.

Fries said Equity Office Property Group is the largest owner of office property in the country but its portfolio represents only one percent of the total office market. AMB is the largest owner of industrial property, but its portfolio represents only two percent of the total market.

"The last six months is the first time we've seen collaboration," Fries said. "Companies are focusing on how to expand the pie rather than how to cut it up."

One of the difficulties both consortiums and dot-coms have in establishing their businesses is the difficulty of integrating their technological systems with the wide array of systems that companies presently use. Project Octane is hoping to fix that problem by creating implementing a single technology that will be used across the industry, Groch said.

"The idea is to create one platform for everybody to communicate," Groch said.

Constellation Real Technologies was formed by some of the largest real estate investment trusts including Simon Property Group, AMB Property Group, Equity Office Property Trust, and Spieker Properties. The group provides funding and other support for start-up companies and other technological initiatives, said J.E. Hoke Slaughter, managing director of Morgan Stanley Dean Witter/Project Constellation.

"We look at business opportunities each week," Slaughter said. "Every week we have a management call that is very well-attended."

Members of the apartment consortium include Archstone Communities, AvalonBay Communities, Camden Property Trust, Equity Residential Properties Trust, Gables Residential, Post Properties, and United Dominion Realty. The consortium transaction will enable Viva to increase the number of registered units from approximately 800,000 to more than 1.2 million.