Big changes in commercial real estate, ready to pay 10X more?

Accurate data is critical to make the right decisions in commercial real estate.  If you’ve missed the news, Costar bought Loopnet and their key competitor declared bankruptcy.  In the past you could access inexpensive property comparables through Loopnet for about 85/mo.  This all recently changed; the new option is 800+ per month.  Quite the increase!  What is the best alternative to save you money? What are the free options?  Fortunately, I’ve found a few options to save you money and time locating good comparables.

Good data is critical

As a private lender, having good data on properties is critical to making the right decisions.  We don’t require appraisals so reliable data is a top concern of ours.  We have been using Loopnet for years until the rates went up 10-fold.  I wasn’t willing to go from 1k per year to almost 10k per year to pull data on sales comparables as they “transitioned” us to CoStar.

What are your options:

I tried out a bunch of different services to see what could get us reliable comparable data at a reasonable cost without too much headache.  Here is a quick rundown:

1. Costar: They are the giant in the room on commercial data. They are forcing users to pay for their premium product as opposed to using loopnet.  The data is excellent, but very expensive for smaller lenders.
2. Xceligent: They came out as a competitor to Costar. Costar successfully drove them out of business by suing them for infringing on their data.  They recently declared bankruptcy, so they are no longer an option.
3. Reis: They offer good market level data, but I haven’t seen them offer property specific data on smaller markets or properties.  For example, the reports are useful to determine the going market rate for an industrial property on the north side of Denver.  If you are looking at a 100k foot property this would be useful, but if you are looking at a 3500 foot warehouse/office the data doesn’t help much.
4. Corelogic: They offer property information on various properties.  For example you could look up industrial properties in a certain zip or area.  They are very similar to Black Knight.  The biggest issue with Corelogic and Black knight is when pulling commercial comparables you have to set the property type, sometimes I might want to see all the commercial properties that have sold on a street or in a tight radius.  This is difficult to do in both of the programs since you would have to select every commercial property type (warehouse, office, mixed use, etc….)
5. Black Knight Financial Services: They are very comparable to Corelogic. You can do a quick radius search based on a subject property location to find comparable sales (as noted above, not easy if you want a generic search).  It is an easy to use program and relatively inexpensive.  This is not as easy to use and “slick” as the Costar products but it gets the job done.
6. County assessor’s office: This one is free!  You can go into the county to see sales near the subject.  Depending on the county it is difficult to easily identify good comparables.  The county is the best data source, but not the ideal way to easily find information.
7. Title Companies:   Many title companies offer their clients quick reports on recent sales near a property.  These tools aren’t extensive but can provide some data typically free of charge for clients.  Here is a link to First American’s portal.

What should you do?

The data services game is dominated by Costar.  Fortunately, there are alternatives to get the data at a much lower price point.  My choice as a costar alternative is Black Knight Financial Services since it is much more cost effective.  I’d be interested to see if you have found other alternatives.  Please comment below and I’ll add them to the list.

Resources/Links

1. http://www.costar.com/
2. http://www.nreionline.com/technology/what-xceligent-s-bankruptcy-says-about-property-data-business
3. https://www.reis.com/
4. http://www.corelogic.com/
5. http://www.bkfs.com/Pages/default.aspx
6. http://www.firstam.com/title/resources/technology/fastweb.html

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