Port districts don’t typically have budgets with a lot of wiggle room, let alone significant marketing funds. And, as stewards of public assets, efficient use of funds is critical.
So, while the contracting of a commercial realtor is helpful when a port chooses to sell property, paying the 5 percent – or more – realtor commission fee on a high-price tag land transaction causes a bit of a “gulp” at many a port commission meeting. Additionally, busy commercial realtors are not always able to keep up with the nuances of properties and the assets – existing or emerging – of the communities in which these properties are located. Port representatives, therefore, often find themselves in the selling seat.
Port of Ridgefield CEO Brent Grening has frequently lamented about this conundrum.
“It’s a double-whammy for ports,” says Grening. “Because we have the knowledge, we do much of the leg work in providing relevant data for an investor or developer, and then get hit with a commission upon sale, too.”
Grening is quick to point out he’s not ‘anti-realtor.’
“I’m concerned about the cost of using their services in a public sector environment,” he says.
A solution surfaces
About 18 months ago, Grening’s concern fell upon the ears of some local entrepreneurs well-positioned to affect a change. Vancouver-based businessmen Keith Stauffer, John Laine and Jim West have stepped in to provide a private-sector business solution to Grening’s and other port representative’s woes. Their company, PortEngine.Net, provides ports with the means to market and transact property at a greatly-reduced cost.
PortEngine launched from downtown Ridgefield and now operating from co-working space in Vancouver, is an online marketing platform for ports; they pay only a 1 percent fee when a successful property transaction or lease occurs. This savings leaves more money in a port’s pocket…and ostensibly lowers the purchase price for the buyer.
“A low fee and no out-of-pocket expense at the outset – port commissioners like that,” says co-founder Stauffer, who holds the position of CEO and head of operations at PortEngine. He brings a track record of entrepreneurial success – including in the software analytics arena – to the PortEngine team.
Stauffer explains that PortEngine is a way to bring buyers and sellers together without third-party involvement. The firm’s software provides a state-wide property inventory that includes all the participating ports.
“PortEngine is an automated marketplace for ports,” he says, “But a deal may come together in conjunction with a realtor, too, who will still receive commission on the other side of the transaction as negotiated.”
Through PortEngine, ports act as their agent and do their own negotiating and can upload to the site all documents pertinent to a potential developer or investor.
“Most developers have tools and resources to know whether they can do the deal,” says Laine, a Port Engine co-founder and its chief strategist. He’s also the founder and CEO of local angel investment company Local.Fund, bringing vision and financial capital knowledge to the PortEngine table.
“With PortEngine,” says Laine, “more documentation is available upfront that helps a developer make a decision more quickly.”
A realtor’s view
Jim West is a longtime commercial realtor in the area, and is currently with Zenith Properties NW, LLC in Vancouver. He’s also one of the largest investors in PortEngine. When West first heard about the idea he wasn’t convinced.
“I thought it was way out there.”
Later West met with Grening, Laine and Ridgefield resident Charles Swatzell, CEO of Vancouver software development firm Formos.
“At that meeting Brent spoke of the ‘pain points’ in doing real estate deals,” says West. “That resonated with me as a realtor, and then the software guys said ‘we can do what Brent wants.’”
West believes there will always be buyers with little experience who need help from a commercial realtor, but in the longer term, plenty of developers will want to be signed on to PortEngine.
“They’re more sophisticated and educated about real estate transactions,” West says. “High-level developers don’t need realtors, and if they can find a way to pay less, they’ll do it.”
PortEngine incorporated in the fall of 2017. Since that time Stauffer, Laine and West have logged around 8,500 road miles, thus far visiting 35 of the state’s 75 port districts to introduce them to the company and the concept. Currently PortEngine has six port partners on board, and is working actively with 15 more. Port of Ridgefield and the ports of Camas-Washougal and Chehalis are contracted and have full-blown integration on their websites.
“Our goal is to have all of Washington’s ports on our network, but we understand the larger ports will likely to be slower to come along,” says Stauffer.
Smaller ports stand to gain more immediate benefit from the collaborative nature of PortEngine, as it allows them to market to a broader audience and extends their reach to prospective buyers.
“The entirety of the data is available from all participating ports,” Stauffer says, “This allows viewers to look for a site or building best-suited for their needs within Washington State,”
What’s next for PortEngine?
As of press time, PortEngine had raised $215,000, some of which came from LocalFund. The company is seeking additional investors to fund new features such as the ability to showcase community capital projects completed or proposed so a developer or investor sees the full potential of a site.
“If we can capitalize on port participation, it is a beachhead breaking into the technology-based real estate market,” Stauffer says. “After that, we will expand into other public sectors such as cities and counties.”
Where’s real estate headed?
Stauffer believes the future of real estate and technology is merging.
“There’s been $3 billion invested nationally in property technology in 2018 alone, but ports, with limited budgets for marketing, are behind this trend,” says Stauffer. “By leveraging a collaborative network, PortEngine makes $150,000 worth of software available to every one of the participating ports.”
As for the Port of Ridgefield’s Grening, he’s appreciative that his issue has been solved in what has become a business opportunity for some enterprising and talented locals.
“What PortEngine has developed is sophisticated and telling of the capacity of folks in Clark County,” says Grening. “And It’s gratifying to have a solution to a longstanding port district issue – and especially gratifying that the business was homegrown.”
More local connections
Adding emphasis to the local aspect of PortEngine is its work with Washington State University-Vancouver, to give students jobs and work experience. To make it possible, PortEngine donated funds to WSU’s foundation, which helps the university pay student wages for the program. Work experience with PortEngine includes software development, marketing and social media through the university’s Creative Media & Digital Culture fellowship.
“WSU Vancouver gets funding for its work experience program and students who don’t have time to work full time get paid while they enhance their skills,” says Stauffer. “And PortEngine gets an important resource as we grow our company – and a pipeline of employees for our business future.”
For more information, and to view videos detailing how PortEngine works, visit PortEngine.Net. To ask questions about investing contact Keith Stauffer by calling 206.931.5124 or email Keith@PortEngine.net.