Reconnecting with CoStar

Gorilla Update... With all of the musical chairs surrounding the national listings sites (demise of Comro, uncertain future of RealtyIQ, etc.), I thought it would be interesting to take a current look at what's new with the dominant company in this sector -- CoStar Group.  Recently I spent a few hours at the corporate headquarters in Bethesda for an update.  CoStar's statistics are ballooning with over 20 billion square feet of properties in 50 US markets, 583,000 sale comps, 986,000 digital images and over 1 million tenants in its database.  Depending on whether you're a user or a competitor, many within the industry have had a "love/hate" relationship with CoStar.  With a growing stable of real estate information products and services, CoStar is worth a second look.

One such intriguing product, CoStar Connect, just emerged from the beta stage and was launched on a full-scale commercial basis on March 1.  CoStar Connect allows brokers and property owners to "private label" their lease and sale listings on their own web site via CoStar's database and web hosting technology.  The result is a professional, graphically pleasing presentation of properties complete with floor plans, color photographs and virtual tours -- outsourced to CoStar without the IT and administrative expense of maintaining it directly.   The five-man brokerage shop can now look as sophisticated as the "big-dog" firms.  CoStar will also do the legwork to photograph and research updates on properties in tertiary markets.  Pricing starts as low as $200/month for small firms and increases based on the number of professionals in the office.

Mark Klionsky, SVP at CoStar, said the pace of customer acquisition for CoStar Connect has kept him "swamped."   The Voit Companies, in Orange County, CA, was the lead beta customer with over 350 lease and 150 investment sales listings (Brokerage / Property Search / Available Properties).  Others have signed up, including Washington Real Estate Investment Trust (Properties / Office Buildings / Leasing & Property Info).  And my former employer, Spaulding & Slye Colliers, recently signed on, although the link is not yet active.    

In calendar 2000, CoStar reported revenues of $58.5 million and a net loss of $49.6 million, with its quarterly losses narrowing at yearend.   The coming year should be interesting as CoStar strives to turn the corner into profitability with continued customer growth and introduction of new products..

--Eileen Circo