Where does an 800 lb Commercial Real Estate data aggregator sleep?

| May 2, 2012 | 4 Comments

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.

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  1. Martin Kemeny says:

    We had a look at Real Capital Analytics a few months back and found them to be very interesting. Their data is not as complete as CoStar’s (although close in our markets), but their user interface and analytics were far better. I could see a lot of people switching if CS got too aggressive on pricing.

    In the meantime, I wonder how much this merger will affect things. Most of what was on LoopNet was already on CoStar. And it seems the reason LoopNet has been so successful is their semi-public, semi-free format which is fairly incompatible with CoStar’s high-cost protected information model.

    At the end of the day it seems like the best orientation for the two businesses is to be doing what they are doing today. Which is not much of a change at all..

  2. Nice post Mike. We’re about to see a new wave of innovation–it’s an exciting time for everyone. With 42Floors, we’re trying to build a more efficient way to search available lease listings. We may succeed, we may fail–only time will tell.

    The unquestioned reality though is that the time is ripe for improvements in how we all use technology in the commercial real estate industry. Brokers, landlords, and tenants are hungry for innovation.

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