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ERISA demands prudent investment decision making. In an ERISA environment, it is essential that plan sponsors, their consultants and advisors operate with as much information as possible pertinent to the performance of the plan assets. A key to the prudet garnering and management of information for pension plans is the appropriate use of technology.

Recently the financial and business press has been awash with talk of the Internet, the Web, Cyberspace, Bandwidth, etc. While some real estate professionals have been at the vanguard of recent developments in telecommunications and computing, many have only vaguely followed new developments. What's going on with electronic information, and what does it mean for real estate counselors?

What Changes Are Afoot?

From the 1940s through the early 1980s, most Americans had little direct experience with computers. The typical computer was a mainframe, run by professional information processing professionals for big corporations, institutions and the government. The hardware was expensive, and the software was generally a programming language, such as FORTRAN or COBOL, which only specially-trained people could run.

In the early and mid-1980s personal computers came into widespread usage. They were affordable to small businesses and home users. To meet the new market of users who where not computer professionals, programmers developed high-level software for the general public. This included word processing and spreadsheet applications for general business use and easy to-use special purpose programs such as lease-by-lease analysis programs. People who had never turned on a computer became regular users. The way in which offices carried out business changed forever, as evidenced by the fading away of old technologies such as the IBM Selectric, CorrectO-Type and ruled accounting paper.

Throughout the 1980s, the main changes in technology involved increases in processing speed and memory, or software improvements designed to enhance the functionality or ease of use. Most people operated on single computers, and the only way they shared data with other users was by distributing printouts or floppy disks. In the 1990s, improvements in memory capacity, software functionality and ease of use have continued at a rapid and apparently inexorable pace. However, the real innovation of the 1990s is shaping up to be another phenomenon, networking.

For most business users, networking started with the installation of Local Area Networks (LANs)(l) for use within their offices. Many companies with multiple offices followed up with the installation of proprietary Wide-Area Networks (WANs).(2) On the home front, most people first became networked with modems to join a commercial on-line network service such as America On-Line, CompuServe or Prodigy. Over the last year or two, the Internet caught the attention of many home users. Each of the commercial on-line services began to provide their members with an easy interface to the Internet, as did numerous firms concentrating directly on Internet access. In 1995, commercial real estate professionals are catching Internet fever in large numbers.

What Is The Internet?

The Internet is a network of constituent computer networks all linked with a common protocol called TPC/IP.(3) It is the world's largest network linking tens of thousands of other networks. With well over 30 million users, it is growing by leaps and bounds, and some analysts expect that it will link over 100 million people before the decade is over.

It is relatively inexpensive for a firm or organization to offer its own information or services over the Internet, and thousands have. As a result, the breadth of services offered over the Internet is vast. Some of the principal services and tools available to most Internet users include:

*Electronic Mail, for sending and retrieving electronic messages. Each user of the Internet has an E-mail address, and E-mail can be sent to any other user around the world. Typically, the user only incurs a local phone charge for using E-mail, even if the recipient of the mail is far away.

*Electronic News (or USENET), is used for computer-assisted live conferences. USENET is a system of electronic bulletin boards with ongoing user dialog. As with E-mail and any other Internet service, the user only pays for local phone charges to the user's service provider, even if the user ends up communicating with people thousands of miles away.

*File Transfer Protocol (FTP), for sending or receiving files across the Internet.

*Navigational Tools, for organizing the contents of the Internet into easy-to-navigate hierarchies, so users can search the Internet for specific content. Two of the most widely used organizational systems for the Internet are Gopher and the World-Wide Web. Gopher organizes the content of the Internet into a hierarchy, and it includes a search engine. World-Wide Web (called the Web or the WWW) is a system which lets users access and download files and jump from one document or Internet site to another through Hypertext links. Hypertext is a mechanism which allows users to access new sites on the Internet by simply clicking the mouse on a highlighted description of the place the user is going.

What Can The Internet Be Used For?

The Internet started out as a network for noncommercial purposes, chiefly the military, other government users and universities. Recently, it has become a powerful tool for commercial real estate professional users to:

*Send messages to co-workers and clients. These messages can be prepared once and sent to either an individual or to a specified list of individuals. If the recipient is not available to read the message when sent, it is stored until the recipient is prepared to receive it. This eliminates telephone tag. If requested, the sender will receive a notice when the message is read by the recipient.

*Send files, such as spreadsheets, word processing files, databases and property or asset management reports, over the phone lines. Internet and private networks will, in many cases, make postal service and express mail delivery obsolete. Delivery by computer network is faster and cheaper, and the item delivered is more useful in electronic than in printed form.

*Retrieve files from another computer. Any type of file you can receive from a colleague or client through an exchange of floppy disks can be retrieved over the Internet. For example, it is possible to send or retrieve rent rolls, cash flow analyses, property or asset management files, word processing documents, etc.

*Set up a home page on the Web to post information useful to clients, colleagues and potential clients who are connected to the Internet. A home page can be a content-rich advertisement which explains and perhaps demonstrates the products and services your firm offers. If set up properly, the home page delivers its information in multi-media with pictures, sound and video to accompany text.

A home page on the Web can be used for electronic publishing purposes, e.g., to publish brokerage listings. With so many commercial property brokers beginning to use home pages to post listings, it is likely the Internet soon will support a multi-media electronic multiple listings function where users can screen investment, leasing or financing opportunities throughout the world. The contact database or Rolodex of an individual broker or even a large brokerage firm eventually will be no match for the breadth and depth of the contacts available through the Internet.

* Perform research. Internet has vast, easy to search and access information resources for use in business of all types, including commercial real estate. Many periodicals are available over the Internet in searchable form. The nation's largest libraries have their catalogues on-line, including the Library of Congress and many university libraries. The books and information found in these catalogues are often available by request from local libraries which, in turn, borrow these items using inter-library loans.

All securities documents filed with the SEC, including the annual 10-K and 8-K reports of all publicly-traded REITs, are available for immediate free downloading from the Internet's EDGAR service. These reports include a wealth of information on REITs as investment entities, and they often provide transaction and other data regarding individual properties.

The government maintains many Internet sites with public access. For example, data from the Commerce and Labor Departments are available. The FDIC provides detailed narrative and statistical reports each quarter on the nation's commercial banking and thrift industries. Even the CIA has an accessible home page on the Web which, among other things, provides a detailed summary of the economy, demography, geography, weather, political system, military strength, drug trafficking patterns, etc., for each nation, island, island group and commonly referenced group of nations.