print header

# 1 Commercial Real Estate Information Company

  • Find Properties 
  • Market Properties 
  • Analyze Properties 
Commercial Real Estate News

CoStar and LoopNet To Join Forces

Industry's Leading Information Service Combines With Leading Online CRE Marketplace To Create the Premier Information, Marketing and Analytics Company in Commercial Real Estate
April 27, 2011
CoStar Group, Inc. (NASDAQ:CSGP) announced Wednesday that it has entered into an agreement to acquire LoopNet, Inc. (NASDAQ: LOOP), the leading online commercial real estate marketplace, in a transaction valued at approximately $860 million.

CoStar said it believes the combined company will be the premier online resource for researching, analyzing, and marketing commercial real estate properties, and the combination of the two companies' complementary services will position the combined firm to provide even more comprehensive market coverage, deliver enhanced research, analysis and marketing options, and offer greater efficiencies for customers throughout the $11 trillion commercial real estate industry, ranging from large, national brokerage and institutional market players to small, local brokers and owners.

The boards of directors of both companies have unanimously approved the transaction, which is expected to close by the end of 2011.

"We are combining two very innovative companies that have transformed the commercial real estate industry," Andrew C. Florance, CoStar Group's Founder and CEO, said in a conference call announcing the agreement. "CoStar revolutionized how the industry researches commercial real estate and LoopNet revolutionized the way the industry markets commercial real estate. We believe that the combination of our two outstanding and complementary companies will lead to even more innovation and greater efficiencies by creating the premier Internet solution for the commercial real estate industry. We expect the benefits to our customers and ultimately our shareholders to be very significant."

"CoStar and LoopNet have been at the cutting edge of innovation in their respective businesses, and we believe the two companies will be even stronger together," said Richard Boyle, Chairman and CEO of LoopNet. "This transaction combines the capabilities and best practices of two successful and very complementary companies. We are excited about the possibilities that can be created together."

The full announcement can be viewed here.

Florance noted how the two firms developed completely different business models to address the challenges of aggregating content across the massive, complex and constantly changing commercial real estate market, an asset class in which an estimated nearly $3 trillion dollars in transactions occur annually.

"Each model excels at tracking a differing major segment of the industry, but neither comes close to covering the entire industry," Florance said. "Once the combination of LoopNet and CoStar is complete, we believe that we will deliver a higher quality marketing solution to LoopNet’s customers and a higher quality information solution to CoStar’s customers."

With the addition of LoopNet’s complementary listings, CoStar will have a database with approximately 2 million active listings.

"We believe that this more complete coverage will significantly reduce our customers’ total costs, save them time, and help them to better serve their customers. In turn, we believe that will help us win many more new customers," Florance added.

"One of the things that I learned in exploring this deal that really amazed me was just how little overlap there is between LoopNet’s subscribers and ours," said Florance. "We have nearly 160,000 paid subscribers between us, yet since LoopNet sells mostly to individuals, and CoStar typically sells to companies, we estimate the overlap to be relatively low. This is a significant opportunity for us to deliver a higher quality and more efficient service to our customers, and also grow our approximately $320 million dollar combined-revenue company into something much bigger."
GET IN TOUCH        Contact CoStar News Team:

 Find us on 

Welcome To CoStar's
Award-Winning News

Winner of three Journalism Awards from the National Association of Real Estate Editors (NAREE)

Award-Winning News