Maybe I should be doing a press release or something, but we ain’t fancy like that around here. We’re a bit more down-home, take me home country roads style. Yes, I know that’s unusual for an Asian-American lawyer from the Ivy League, but that’s just how we roll here.
After weeks of research, enormous effort, multiple interviews, and tunneling through the web like we’re moles with Google-fu, I am proud to say that we have released a major Red Dot Report on CoStar and its entry into residential real estate. Let me just post the Introduction from the report for you:
CoStar’s surprise acquisition of Homesnap, a residential real estate data startup, for an eye-popping $250 million was a non-event outside of real estate. After all, CoStar was already engaged in a bidding war for CoreLogic for billions of dollars, and was trying to acquire RentPath.
Within the residential real estate industry, however, that acquisition clearly signalled that a major new power had entered the industry. Glenn Kelman, CEO of Redfin, recently compared competition in the residential sector to the film “Mad Max: Beyond Thunderdome” between Redfin, Zillow, Compass, “and now CoStar.”
But the residential real estate industry is largely ignorant of CoStar, a dominant giant in commercial real estate. Most of the executives in brokerages, franchises, MLS and Associations, and even technology companies don’t know much about CoStar. We thought it might be useful for industry leaders to understand who CoStar is, its history of growth, and what CoStar might or might not do in residential real estate.
At the same time, investors who do know CoStar often don’t know the weirdness that is the residential real estate industry. It is nearly impossible to explain the opaque and difficult to understand landscape of residential real estate.
This report represents our best effort at bridging that divide, while engaging in some informed speculation about what the future holds. We must make clear that we do not know what CoStar intends, do not know what Homesnap intends, nor do we know what various MLSs and brokerages intend. And even if we did, we could not use them unless things were told to us on the record. They were not. So we limit ourselves to public statements, proprietary research, and nonconfidential information. Then we use logic and reason and speculate. It is sadly unavoidable.
But it is, we think, the most informed speculation available on this subject. Of that, we are confident.
Unfortunately, because of the scope of the topic, the report is very, very long… even by our inflated standards. To paraphrase Mark Twain, “I apologize for such a long report – I didn’t have time to write a short one.”
But we named this report The Rising Sun, because it turns out, the sun is a star… and it rises in the East.
Grant and I are rather proud of our work here. I hope we’re justified in that pride. Because we think we’re onto something here.
This is a massive study — well over 100 pages in length. But it is broken down into three parts so that people don’t have to read about what they already know. We think it will end up being manageable, and we do provide an Executive Summary. Section 1 goes into CoStar, its history, who it is today, product lines, its financial strength, senior executive team, and some of the issues they have run into over the years. Section 2 goes into the real estate industry, Homesnap and BPP, some of the disruptions we are facing; this part is intended for people from outside of real estate so they can get some context. The heart of the Report is Section 3, where we go into what we think the implications are of CoStar moving into residential real estate for brokerages, agents, teams, franchises, MLSs and Associations, and technology companies.
It’s Kind of Like a Free Report
Since we spent so much time and energy on the report, no, I can’t just give it away. Writers and researchers and designers don’t work for free; they too have to eat.
But the good news is that it’s almost like a free report, since I am deducting the cost of the Report from my telephone consultation rate. So if you actually want some Recommendations on what to do about this, or have further questions, then it’s almost like you got the Report for free.
Anyhow, head on over to The Red Dot Store to check it out, and get a copy for yourself, and one for your best friend. (If you’d like to buy more than 5 copies, contact me directly and we’ll set you up with discounts and such.)
Thanks and I do hope you find our work useful. This is one of them big things poppin’ in 2020 and beyond.