Careers at CoStar Group
CoStar Group’s mission is to create efficiency and transparency in commercial real estate.
CoStar Group is a provider of commercial real estate information and marketing services. The firm operates two reportable business segments based on geography:
- North America – Includes the U.S. and parts of Canada
- International – Includes parts of the UK, France, and Spain
Andrew Florance grew up in the real estate industry – his father was a top architect and he had relatives who were brokers. While in college, he got a real estate license, and also earned money by writing software. When he graduated, he planned to use his savings to buy and renovate abandoned properties. However, he was frustrated with the lack of real estate information that was available.
At the time (the late 1980s), most real estate brokers compiled their own listings by doing research and sharing information with each other. He decided he could provide a valuable service by creating a database with multiple listings. It would be a centralized source that would provide more comprehensive and accurate information. He would charge a subscription fee for access.
Florance began by gathering the information from sources such as government economic development publications and Dunn & Bradstreet. He then wrote software programs that could manage all of the data, then printed it out in 1,200 page reports. He founded a company in 1987 called Real Estate Infonet to market the service.
His business attracted the interest of lawyer Michael Klein, who started an investment group to fund the venture. This enabled Florance to launch a new version of the firm called Realty Information Group (RIG). It published its first real estate guide in 1989. Over the next few years it experienced significant growth, and developed the electronic version of the product.
During the 1990s the company learned that its offering needed to be personalized for individual markets. In 1993 it finally released its CoStar electronic database and sold its print business. In 1998 it completed an initial public offering and was listed in the NASDAQ. In 1999 the firm itself was renamed CoStar. In 2000 it phased out all of its CD projects, becoming completely Web-based.
Benefits at CoStar Group
Business model of CoStar Group
CoStar Group has a multi-sided business model, with two interdependent customer segments that are both needed in order to operate:
- Property Listers – Commercial property owners, landlords, and real estate agents that list properties for sale or for lease in its marketplace
- Property Seekers – Businesses that purchase properties listed in its marketplace
CoStar Group offers three primary value propositions: accessibility, customization, and brand/status.
The company creates accessibility by providing a wide variety of options. It features listings for all types of properties, ranging from farms and ranchlands to shopping centers and apartments, to industrial properties and offices. It provides this information through several branded websites, including CoStar, LoopNet, Showcase, CityFeet, ShopProperty, Apartments.com, ApartmentFinder, ApartmentHomeLiving, BizBuySell, BizQuest, LandsofAmerica, and LandAndFarm. It has been able to offer so many options in part due to an aggressive acquisition strategy – firms it has purchased in the last few years alone include Network Communications and Belbex Corporate.
The company enables customization by allowing customers to personalize their searches. Its website allows them to narrow down their queries through the use of hundreds of data fields, with specific ones including location, building characteristics, site and zoning information, space and unit availability, ownership, tax assessments, space requirements, sales and lease comparables, number of listings, number of retail stores, for-sale and for-lease listings, mortgage and deed information, income and expense histories, lease expirations, tenant names, contact information, historical trends, retail sales per square foot, and demographic information.
The company has established a strong brand due to its success. It offers the largest and most detailed database of commercial real estate information. Its websites attract more than 25 million unique monthly visitors in aggregate. One of them, LoopNet, is the most heavily visited commercial real estate marketplace with over 10 million registered members. The company has over 2,900 employees operating in offices in the United States, Canada, and Europe. Lastly, it has won a number of honors, including the following:
- Recognition as one of the Most Innovative Growth Companies in 2016 by Forbes
- The 2012 Commuter Connections Employer Recognition Award
- The 2012 IRES Corporate Leadership Award
- Recognition for the Best Real Estate Deal of 2011 by Washington Business Journal
- The AWE Workplace Excellence Award
CoStar Group’s main channel is its sales team, which includes field and inside sales employees. The company promotes its offerings through its website, social media pages, online marketing, direct marketing, print/television/radio advertising, and participation in trade shows and conferences.
CoStar Group’s customer relationship is primarily of a self-service, automated nature. Customers utilize the service through the main platform while having limited interaction with employees. The company’s website features an “Insights” section that includes white papers, case studies, and infographics.
It also provides access to an e-mail newsletter and webinars. That said, there is a personal assistance component in the form of phone and e-mail support.
CoStar Group’s business model entails maintaining a common platform between two parties: property listers and property seekers. The platform includes its website and mobile app.
CoStar Group’s key partners are data and image providers. The company licenses a portion of its images and data from third-party data sources and public record providers. These data elements and images include property ownership, demographic information, tenant information, aerial photographs, maps, and 3D virtual tours of apartment communities.
CoStar Group’s main resource is its proprietary software platform, which serves over 25 million monthly visitors.
It depends on human resources in the form of research professionals who gather and study commercial real estate information through phone calls, online research, e-mails, public records review, field inspections, direct mail, and news monitoring. It also relies on the technology employees who maintain and update its platform, the sales employees who promote it, and the customer service personnel who provide support.
CoStar Group has a cost-driven structure, aiming to minimize expenses through significant automation and low-price value propositions. Its biggest cost driver is cost of revenues, a variable expense. Other major drivers are in the areas of sales/marketing, administration, and software development, all fixed costs.
CoStar Group has one revenue stream: revenues it generates from the subscription fees it charges customers to access its research database/marketplace.
Subscription rates are set based on the number of users, number of sites, organization size, geography, the client’s business focus, the number of properties a client advertises, the number and types of services to which a client subscribes, and the placement and prominence of a client's advertised properties in search results.
info: Andrew earned a Bachelor of Arts in Economics at Princeton University. He has served as head of CoStar since founding it in 1987. He has served on the board of several organizations, including American Real Estate Society and Walker & Dunlop.
info: Frank earned a Bachelor of Arts in Computer Science at State University of New York — Geneseo and a Master of Science in Information Systems at George Washington University. He previously served as SVP of Information Systems at CoStar Group.
info: Scott earned a Bachelor of Arts in Business and Finance at the University of Washington. He previously served asVice President, Finance and Information Systems at Avery Dennison and as Chief Financial Officer of GE Bayer Silicones.
info: Francis earned a Bachelor of Science in Accounting at Wake Forest University. He previously served as Chief Financial Officer and Treasurer of CoStar Group and as Chief Financial Officer of Avectra, Inc.
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