Real Estate: PEOPLE

trillion dollars of potential transactions being offered to the market here in the United States, and our brokerage clients earn about $60 billion of commissions off that each year.

VB: How well did you know Rich- mond before you started this search?

“We believe we’re involved in about 85 percent of all real estate deals in the United States,” Florance says.

Florance: I personally worked with the brokerage firms here 15 to 20 years ago in getting CoStar going. When I first started up the company, my sister had a little graphics shop down here, and I would spend every week here when we were producing our first product. When we printed commercial real estate direc- tories back in the early ’90s, we used to print those down here in Richmond. I’ve gone up and down I-95 a fair amount.

VB: Now, tell me a little bit of where your revenue comes from.

We now even have data where, we

frankly can see how inefficient people are at pricing their real estate. You’ll see one community setting a price just $100 too high a month, and they will get only 10 percent of the attention of the renters that another community priced $100 dollars lower gets. You realize that the automated pricing systems have to move out to the internet where the consumer is actually searching. As real estate becomes completely digital, that will keep the aca- demic world busy for a long, long time, and the more problems the academic world can dig into, the more the private sector can consume that knowledge.

VB: Where does most of your infor- mation come from, public data or private sources?

Florance: There are probably several hundred different sources of data. One of the keys to presenting good data is having the software to pull together all those different flows of data and ratio- nalizing and curating it into something that makes sense … There will be a lot of data coming from public data sources: the Department of Energy, the EPA, the

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SCC, state insurance filings. There will be tons of private sources of data coming in ...

Then we write tens of thousands of

little software robots that roam around the internet collecting data. We have a robot that puts in every single possible permutation of potential deed number every morning and compares it to what was there yesterday morning and then finds the new deed. So we can actually get immediate word of a new deed through this sort of code cracking. We also have robots that [track the locations of CVS drugstores]. If we find there’s a new CVS, we then send a trigger to our researchers responsible for that neighborhood who will then figure out what happened — like who built it and what was there before … We will have a point person who

manages a relationship here in Rich- mond between CoStar and the brokers at [major brokerages] or at any of the big developers. We take all that data, and we try to make sure that the most important part of the market, which is the active listings, are being accurately represented and the deals are being accurately repre- sented. At any point, there’s more than a

Florance: [CoStar] subscribers pay a monthly subscription fee, roughly a per- broker subscription fee. Institutions pay a similar sort of fee. We have a quarter mil- lion clients, and, they include every major brokerage firm in the United States. Most of the vast majority of the substantial [real estate owners] are using it. A vast major- ity of banks use it, also regulators and economic development, state government and federal government [officials]. On the apartment side and on the

commercial real estate side, people pay advertising fees to generate leads online. We’ve served up 50 million leads for tenants to our clients over the past two years. We believe we’re involved in about 85 percent of all real estate deals in the United States. We do a lot of other things, like

things you’d never think of. We’re the number one site for buying and selling farms in the United States, which is a multitrillion-dollar sector. That’s timber, that’s minerals, that’s agriculture. And we’re also the number one website for buying and selling small businesses … Then we also do things like rent pay- ment systems … We do econometric consulting and then we also have a team that works with the Fed and various major banks on doing debt risk analytics … We’re involved in a lot of stuff.

Photo by Mark Rhodes

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