The only constant in the research side of the commercial real
estate industry has been change over the past year as a couple of
mergers have dramatically reshaped the research landscape - not just
for Oklahoma City and Tulsa, but for the entire nation as well.
These changes began in August of last year when commercial real
estate research giant CoStar bought LoopNet, an online commercial
property listing service, for a reported price of $860 million.
According to Rich Simonelli, director of strategic communications
and investor relationship for CoStar Group, the appeal of LoopNet
for CoStar was the opportunity to integrate its research services
with the nation's largest online commercial property listing
service. Since the acquisition was completed in April, Simonelli
said CoStar has been working to integrate LoopNet's listing data
into CoStar's expansive property databases.
"We see a lot of potential of working with (LoopNet's) clients
and providing them with the information in our system," he said. "We
were looking for an opportunity to really make the entire commercial
real estate industry much better off by having us work together
rather than separately."
As CoStar continues to integrate LoopNet's data, Simonelli said
users of both services would soon be noticing changes and the
benefits of the acquisition.
"The most immediate thing that users will see is much of the
LoopNet data being available at CoStar," he said. "We've added about
50,000 properties to our database of about 1 million. People in the
industry can go with confidence to one source and find all the
information they need on properties."
Furthermore, CoStar will be evaluating over the next few months
where the best sources of services will be provided from, which
means there is a possibility that some changes could be in store for
some of LoopNet's property research services.
"We are looking at which ones we can invest in and which ones we
can improve and which ones can we pull together," Samonelli said.
CoStar and LoopNet are not the only ones engaged in acquisitions.
In fact, their coming together put CoStar's growing rival Kansas
City-based Xceligent in a tough spot, as LoopNet was one of its
primary investors with a stake in the firm.
"(The merger) was a little overwhelming," said Doug Curry, CEO of
Xceligent Inc. "We were not expecting that."
Curry said the changes with CoStar and LoopNet allowed Xceligent
to seek a new partner of its own, which led to Xceligent's purchase
by dmgi, which was finalized on April 27. Curry said this
acquisition will position Xceligent to become a national competitor
to CoStar and LoopNet over the next few years as the company expands
its research platform to include all of the top 65 markets.
"We knew dmgi was the right partner for us because they had taken
companies our size and helped them become the leaders in their
industries," Curry said. "We wound up signing a deal with dmgi to
become our partner to help us fund the rollout of a proactive
research model in every major market in the nation, and to
dramatically increase the scope and scale of what we've been doing
with regards to our product offerings."
Additionally, Curry said that this deal did not happen overnight
as Xceligent has been strategically growing its research platform
since 2006. During that time, the company began expanding its
research platform into neighboring Midwestern markets. In these
markets, Xceligent learned how to collect data using a more cost-
effective methodology, which he said allowed them to offer their
services at a more discounted rate than CoStar. It was also during
this time that Xceligent partnered with LoopNet to help with its
In late 2007, Xceligent expanded into the Oklahoma City market,
which was its first market with LoopNet, and quickly became the
researcher of choice for many area firms. …