Take eight large real estate companies, add a booming telecommunications industry and a red-hot venture capital firm and stir. The result? A tasty potential monopoly, 90s-oriented value-added services and the ever-so-popular concept of one-stop-shopping.

Fueled by the growing Internet economy, telecommunications companies are experiencing an unprecedented period of increasing revenue and market opportunity. With that have come several new entrants to the telecommunications marketplace.

Both new and established telecom players have been using every possible strategy to win customers' hearts and minds. But such warm and fuzzy feelings are meaningless without one simple thing: building access.

While telecom companies have been busy trying to force regulatory approval of anytime, anywhere building access, eight real estate big boys have developed an impressive strategy to steal away a significant piece of telecom revenue. This coalition has joined together to create Broadband Office, Inc., billed as a new way to introduce and deliver next-generation telecommunications services to small to mid-sized corporations.

You've heard of all of the players: CarrAmerica Realty Corporation (NYSE:CRE), Crescent Real Estate Equities Company (NYSE:CEI), Duke-Weeks Realty Corporation (NYSE:DRE), Equity Office Properties Trust (NYSE: EOP), Highwoods Properties, Inc. (NYSE:HIW), the Hines organization, Mack-Cali Realty Corporation (NYSE:CLI) and Spieker Properties, Inc. (NYSE:SPK).

Leadership is being provided by Kleiner Perkins Caufield and Byers, a venture capital powerhouse that has had its hands in success stories such as @Home, America Online, Amazon.com, Excite, Netscape and Sun Microsystems

Broadband Office's initial national footprint will span approximately 40 percent of office space owned by REITs in the United States and will represent about 10 percent of U.S. commercial office. Nearly every major metropolitan area of the country will be covered, including the 30 largest office markets and well over 2,000 office buildings.

The company will begin delivering services in the next month and a half. By working closely with property managers - who also happen to own part of the company and have seats on the board of directors - Broadband will serve as a one-stop-shop for a range of telecom services. These will include local and long distance voice service, high speed Internet, data and video connectivity, voicemail, e-mail and Web hosting.

Not a bad strategy for the typically non-innovative commercial real estate industry.

"The goal of this company is nothing less than to create the leading player in what we believe to be one of the business world's most dynamic industries - the telecommunications industry," said Kleiner Perkins General Partner Kevin Compton. "The competitive advantages afforded through our partners' real estate holdings and strong tenant relationships, along with our ability to broaden the market beyond that audience, will propel Broadband Office to become the dominant player in the building-centric telecommunications business."

Under the terms of the real estate companies' agreement with Broadband, the consortium will retain a "meaningful ownership stake" and provide the telecom company with access to their office property portfolios.

AT&T, eat your heart out.

And in other real estate news, Wells Fargo & Company (NYSE: WFC) has purchased Eastdil Realty LLC, a privately held real estate advisory company.

Headquartered in New York, Eastdil is a real estate investment bank specializing in public and private debt and equity real estate placements, transactional real estate advisory and corporate-owned real estate services. Eastdil led the industry in placements last year, with transaction volume of more than $13 billion in 1998.

Wells Fargo as of late has been pushing its consumer-oriented products and has invested millions in a slew of grocery store branches. Maybe we should keep an eye out on the firm's commercial operations.

Published: October 7, 1999

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Editor's Note: This article reflects the opinions of Lesley Hensell only and not necessarily the views of this or any other publication, organization or Website owner.

Lesley Hensell covers commercial real estate and financial issues for Realty Times. Based outside of Dallas, Lesley works with high-tech and real estate clients as an independent marketing and public relations consultant. She also writes for several publications, including the Dallas Morning News. E-mail Lesley at: lhensell@earthlink.net