Commercial Appraiser Data Sources

How do commercial real estate appraisers source data for their analysis?

Residential appraisers have the advantage of accessing the mulitple listing exchanges that are available in most markets to source the same real estate sale data used and provided by real estate agents. It wasn’t long ago that Commercial Appraisers and brokers had no quality shared data source. Nowadays, commercial appraisers and commercial real estate brokers in major markets have access to large amounts of market data on transactions from several sources; one of the best of these is CoStar. Loopnet provided some data that appraisers could utilize, but it’s popularity was really a result of it’s visibility to potential buyers and tenants and its use a a marketing tool by agents. LoopNet had been the industry’s most heavily trafficked online market place with over 5.8 million registered members and a monthly traffic of 3.6 million visitors. In 2012, Costar acquired LoopNet in the hope of complimenting their client bases and dominating the real estate data market, including the Phoenix area. This acquisition led to the formation of the dominant, marketing and analytics company in commercial real estate.

This acquisition facilitated the ability for brokers to buy advertisements within Costar service at no extra costs. Also, the recent launching of multifamily products and video property tours has promised additional growth and revenue for Costar.

The acquisition also led to integration of technology between the two firms. This led to innovations that have enabled Costar to stand out further in the industry. In the online market, one has to stay ahead by matching up new technology. Costar has been able to come up with new ways of building traffic ahead of competitors in the commercial real estate industry. There has been a massive boost on their advertising ability; since they are able to reach a bigger audience. Costar has been able adapt to changes in the industry with its high quality research tools, advanced analytics and productive marketing. Information in the commercial real estate industry can now be accessed on one platform. This has made it easier for most potential and current customers to get all the information they need at a single source.

Again, the merger enjoys economies of scale through leveraging the fixed cost of technology and research on the large numbers of clients that it has following the purchase of LoopNet. The LoopNet acquisition has created value for Costar shareholders.

From a users perspective, for appraisal or brokerage activiities, some viewed the merger with suspicion, believing that it would drive up costs without added value. It appears that it hasn’t been the case, improving the data base of Loopnet for those users that are primarily interested in the marketing side of the business, and adding value due to improved visibility to potential tenants and buyers for those that use Costar as their data base.


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