Nearly a year since it was first announced, CoStar’s acquisition of LoopNet finally cleared regulatory hurdles and closed this week. Many in the industry have been concerned about this consolidation– as separate companies, both had pretty user-unfriendly pricing (contrary to popular industry sentiment, I find LoopNet’s to be the more onerous of the two on this front, given their focus on end-users), and the obvious concern has the newly formed behemoth cornering the market and backing brokerages and end-users against a wall. Both are a de-facto research department for some smaller brokerage houses, and LoopNet has been the only viable source of semi-public listing information in many markets, so the concern is certainly valid.
I think that this merger presents a great opportunity for some new players in this space, and that the market for real estate data is going to get more competitive and a lot more dynamic. Companies like Rofo and, the one I’m personally keeping an eye on, 42Floors (which has been getting some good press of late) will challenge the old guard for market share and bring a fresh approach. I’m really intrigued with groups like Ten Eight who are making great use of mobile technology to improve the office search process. Niche players like co-working facilitator LiquidSpace (another one that I find especially compelling) will fill real needs in the market, too.
It’s been a very long time since the sort of market data aggregated by these companies could be considered proprietary, and I think that the only brokers who are concerned about the industry becoming more transparent probably have bigger things to worry about. Market data is not the same thing as market savvy. I’ve had the opportunity to interface with senior execs at many of the upstarts I mention above, and I think they all know that brokers fill an important role in making the real estate market go. All of them provide potentially great tools for those of us in the trenches. I have to include the old guard in that statement– the newly released CoStarGo caused more brokers to buy iPads than Angry Birds and NetFlix combined. LoopNet, too, has added some great features for brokers of late.
Clearly, CoStar/LoopNet is the incumbent and, I think, will be very hard to knock out of pole position. But an influx of new players and new ideas will make pricing more competitive, push development of new features, and benefit the whole market. It’s a great time to be a real estate data junkie.