The concept of a Multi Listing Service (MLS) doesn’t exist in commercial real estate, at least not yet. The way commercial real estate practitioners find properties is through a combination of market knowledge, boots on the ground tactics, as well as having access to exclusive content on CoStar (NASDAQ: CSGP), which usually comes with a hefty price-tag. Years ago, LoopNet and CoStar were two different products. However, that changed in 2012 when CoStar acquired LoopNet and arguably changing the future of commercial real estate. That has further changed in October 2017 when CoStar combined its user-interface platform with LoopNet for professionals.
But why even have two different systems in the first-place? Or what is the difference between LoopNet and CoStar?
Database and Transaction History
CoStar is the largest research platform today for commercial real estate properties. A real estate professional or subscriber can look-up sales and lease comparables, ownership information, historical records, for sale and for lease listings, market data, contact information, trend analysis, and more. As of October 2017, LoopNet made a huge push to professionals to use CoStar based on its comprehensive solution.
Previously, a premium subscriber on LoopNet (identified as someone paying a monthly fee of $250 or more) would also be able to access historical information as well as ownership information. That feature on LoopNet is no longer available. In fact, any records or data (other than listings) are no longer available.
LoopNet now concentrates as a property advertising hub. The target audience is small businesses or investors who do not want a paid account, but may want to search available properties. Of course, the platform is still at the mercy of brokers and agents to update their listings and pay for premium visibility. Often a complaint among clients is why is the listing from 2013 when it is clearly irrelevant?! Ah yes. LoopNet is promising that going forward those listings that are not updated frequently will be pushed down the list. Unfortunately, the listing doesn’t get removed.
For professionals, CoStar includes all listings available in LoopNet as well as CoStar. Therefore, if you are just a free searcher you may not see all listings available. There are also free listing capabilities on LoopNet, but the claim is the audience exposure will be a lot less.
Not Just Commercial
CoStar is now starting to target residential listings due to their acquisition of apartments.com and WestsideRentals. That's right. They now own the popular residential website. They want real estate managers to start listing their properties here, beyond Zillow, with promises of being visible not just on LoopNet, but cityfeet.com and showcase.com.
You Get What You Pay For
Given CoStar’s focus on the professional market, it can be extremely expensive. Monthly costs vary often several hundred dollars per month, or more, depending upon what packages and market areas are being purchased. For instance, you could purchase just the comps and listings, but not the tenant information. For a tenant or small investor, CoStar wouldn’t make financial sense.
Other database groups such as Xceligent have claimed this looks and smells like a monopoly and have even filed a antitrust lawsuit against CoStar. According to Bisnow, Xceligent has alleged that CoStar has “created a monopoly and engaged in years of anti-competitve behavor.” CoStar has counter sued and a U.S. federal judge entered into judgment in CoStar's favor where the court found Xceligent illegally copied its content into their database. As the legal battle continues, it hasn’t stopped people from looking for real estate. Deal-making shall endure.
Searching for properties isn’t, however, the complete story. In our recent article Leasing Tips and Tricks there are many negotiation tactics and business practices that can’t be found on CoStar: success comes with expertise and experience. As a tenant or investor thinking about leasing or buying property, or hiring a real estate professional, there is more than just looking online.
Having worked for institutions and large companies, we understand all angles of the deal and are better equipped to negotiate on your behalf. Here at Estate Match Realty, that is what we do - we create a plan with real solutions to match your real estate needs.