CoStar Fully Integrates Database With LoopNet, Creates New Platform For Users
The ubiquitous tool commercial real estate professionals use in their daily workflow is about to look and feel noticeably different.
The $9B Washington, D.C.-based commercial real estate data giant acquired LoopNet, a free public listing service for commercial properties, in 2012 for $860M. CoStar made some minor integration efforts following the acquisition, but the services and the data behind them have still remained largely separate in the five years since.
"We have heard loud and clear from our customers that they wanted this badly," LoopNet President Cameron Stewart told Bisnow. "We hear from people regularly saying 'you guys are one company, why are you acting like two? Why do I need to manage listing content in two locations?'"
The first thing that users of the subscription-based CoStar platform will notice is a redesigned homepage and entry point. The company aims to make the page more compelling and has included excerpts of news stories, plus direct access to products and information the user has subscribed to.
The most functional change for commercial real estate professionals will be the way landlord brokers upload listings. Today, a broker looking to post information on the properties he or she is marketing has to interact with a CoStar researcher to put it on the subscriber-based platform, and then complete a separate entry to upload it to LoopNet, allowing it to be seen publicly on the web.
When brokers wake up Saturday morning, they will have access to a new listing management platform for them to upload and edit their CoStar and LoopNet information in one place. This will mean that new information entered into the CoStar database will not have to go through researchers before it is available, speeding up the process.
"It totally compresses the timeline for when things are happening on those properties," CoStar Vice President of Product Management Rob Cain said. "It really adds a high degree of efficiency and timeliness to the data."
Tenant representatives will likely see some change to their workflow too. Since the databases behind the two services have been completely integrated, all of the publicly available LoopNet listings will appear in the CoStar database. This means tenant brokers searching space for their clients will not have to check both platforms.
CoStar has 1,750 portfolio researchers who will verify the user-inputted LoopNet data to make sure everything on the CoStar platform is accurate. They will also add other contextual data they collect to make the listings more extensive.
Users of the public LoopNet service, many of whom find it through Google and other search engines, often do not work in the commercial real estate industry. They tend to be small-business owners looking for office, retail or restaurant space, personal investors looking to buy and sell properties, and others who are not full-time real estate professionals.
LoopNet has always allowed users to post and search listings for free, but CoStar has signaled an intention to ultimately turn LoopNet users into paying customers.
"We continue to assess the timing and potential impact of transitioning the LoopNet marketplace to a pure marketing site for commercial real estate where, eventually, all listings would be paid and users could search the site for free," CoStar said in its 2016 annual Securities and Exchange Commission filing. "When we implement this shift, we will seek to convert LoopNet information customers to higher-value, more profitable annual subscription information services."
But Cain said LoopNet users will still be able to post listings and search the database for free after this integration. The LoopNet listings will still only include the public user-inputted information, not the data CoStar researchers collect and put in the subscription database.
Some current LoopNet users, Cain said, are commercial real estate professionals who do not want to pay a subscription and instead use the public service as an information tool. By integrating the platforms, he said, CoStar hopes to entice some of these users to switch over to the paid side.
"This is an education process to help real estate professionals who have been using LoopNet realize they're not seeing everything they can be seeing," Cain said. "If I'm in a market where I'm competing with other firms that have access to CoStar and I've just been using LoopNet, I have access to less information."
For now, CoStar is focused on Friday night's launch and creating a seamless transition for users. Cain said it has done focus groups with people who have been using the platforms for years, and he is confident the transition should go smoothly.
Ultimately, CoStar hopes the change will make its databases more efficient, convert some of its free LoopNet customers to paid CoStar subscribers, and lure more advertisers to LoopNet to bring in more revenue for the public company's investors.
"We believe there is several hundred million [dollars] ahead of potential revenue for both LoopNet advertising, as we grow that platform, and for the CoStar information service," Cain said.
CoStar last month spent $385M to acquire multifamily listing company ForRent, further bolstering its network of multifamily listing platforms that includes Apartment.com.
CoStar is also spending tens of millions of dollars on a legal battle with its competitor, Xceligent. CoStar first sued the Kansas City, Missouri-based company in December, alleging widespread theft and republishing of its proprietary information. Xceligent then fired back with a countersuit in June that accused CoStar of violating federal antitrust law and engaging in years of monopolistic behavior.