Loopnet is gaining in popularity for buyers who are looking or commercial property that is for sale. It's an online commercial real estate marketplace that provides listings that are for lease or for sale within the United States. We were interested in learning more about this business and so we checked it out. We were surprised by what we found and if you're in the market for commercial real estate, either to buy or to sell, it may be a site worth checking out. Here are 20 things we discovered about Loopnet that you probably didn't know, but may benefit from hearing about.
1. It was founded in 1995
With almost a decade and a half in its history the company has come a long way since Dennis DeAndre and Steve Midgely established the business. One of the greatest benefits of the site is that it provides a convenient location to find thousands of commercial properties in one place.
2. There are millions of registered users on the site
What makes this site so useful is that there are over 8 million registered members on the site, making contributions for commercial properties that are for sale or for lease. The 8 million also includes buyers who are always on the lookout for certain types of commercial property opportunities. Statistics show that there are also 5 million unique visitors to the site each month. This means that there are five million people who visit the site who are not registered users, so there are a lot of people checking it out to see what's available.
3. It took a lot of venture capital to launch Loopnet
Shortly after founding the company which became the largest commercial real estate listing service on the internet, it was the recipient of several rounds of venture funding. In 1997, they received a round of privately backed venture capital financing by Indo Suez. In 1998, Trinity Capital & partners invested in Loopnet and again in 1999, they received financing from a multi-party investment.
4. Loopnet wasn't profitable until 2003
After all the funding to get Loopnet going, the company finally started to show a profit. It was growing and thriving at such a fast pace that by 2006, Loopnet made its first initial public offering of shares on the market. Going public is always a high point in the development of a business and it shows that it has surpassed a significant financial milestone.
5. The CoStar Group acquired Loopnet in April of 2012
For the first time since the company was originally founded and launched, it traded hands in ownership. CoStar acquired the successful commercial real estate company for a cost of $860 million, paid in cash and stock.
6. They gave their services for free initially
We also learned another interesting fact about the internet real estate site. Loopnet gave away many of their services for no charge when they were first trying to build their membership and user base. This is a practice that is common among many internet businesses. It would also help to explain why the company didn't show a profit until 2003.
7. The first users had to enter their information manually
We also learned that in 1996, all of the listings for commercial properties were entered manually by the users who were offering them for sale or lease. This was before LoopNet had had the opportunity of adding user features that would allow them to import the listings in an automated fashion. Doing things the old fashioned way was in no way a deterrent for users because they were used to doing things the hard way. When LoopNet was able to add the automated import option the site's popularity soared because of the innovation, which is now considered to be one of the more basic functions of such websites.
8. LoopNet was an early experiment in user created internet content
Although the founders were not creating the site to perform an experiment, it was one of the earliest websites to be based upon this platform. Hence, it was experimental in nature, although that was not the intention. It proved to be an effective medium for users because the site was successful in accomplish its mission to connect people interested with selling or leasing out commercial properties with those who were interested in buying or signing a lease agreement. It wasn't difficult to use the site, but it was more time consuming than the modern methods that it employs today.
9. The basis of Loopnet's goals have not changed
Most successful companies evolve over time and this brings about changes. Although Loopnet has advanced in its technology and user friendliness, the basic premise of its reason for existing has not changed. The company has remained true to its original mission, even through changes in ownership. It is still one of the most popular online resources for connecting buyers and sellers in the commercial real estate property market in a free and open network.
10. They have a unique business model
The business model that LoopNet currently uses is one that sells memberships to its website. They offer paid premium memberships which offer some additional benefits that are not available to the members who use the site for free. This is their revenue model that began in the fourth quarter of 2001. The term is referred to as the "freemium" model. The offered a tiered pricing structure for their memberships in 2008.
11. Loopnet was sued in 2012
The LoopNet company had some serious legal issues in 2012. They were sued by the CoStar Group which was their competitor at the time. LoopNet came out of the winning end of the case and they had filed a counter suit against CoStar Group, which they won. Right after the lawsuit was completed, CoStar Group acquired LoopNet. The case rendered a ruling which was important in clarifying the DMCA and earlier cases.
12. The lawsuit set a precedent
The legal case that occurred between LoopNet and CoStar Group helped to establish a new case law when it comes to ISP responsibilities in the case of user created content. The particulars of the case including a summary are located for public viewing on the Electronic Frontier Foundation website under the name CoS v Netcom. This is a similar case that took place before the legal issues between LoopNet and CoStar.
13. They started out when dial up was a thing
This is a fun fact that we learned when were were looking into the history of LoopNet. When the website was first launched it was when dial up was the way that people connected to the internet. Not only were the connection times slower, the web performance was also a lot slower. Sites were prone to crashing because the connections were so sluggish.
14. 2015 was a remarkable year for LoopNet
We checked the stats that LoopNet maintained to find out how they were doing four years ago. We discovered that in 2015, the LoopNet website received more than five million unique monthly visitors and athere were over 7 million registered members at the time. We also learned that 76% of the searchers were investors an tenants and only 14% of the users at that time were brokers. The statistics also sowed that 53% of the users were looking for commercial properties that were for sale and 47% of them were looking for lease properties. By looking through these statistics we not only saw that LoopNet was doing some great business, but they were also maintaining some great statistics and using analytics to monitor the type of traffic, frequency and reason for visit which gave them useful information that they could share with others.
15. LoopoNet has two services that can enhance your search and more
LoopNet added two useful tools to their site called Property Comps and Property Facts. These two tools allow you to do an entire search of multiple areas of the commercial real estate market.
16. You can access millions of property records
The Property Facts tool that we spoke about earlier gives users access to search more than ten million property records. This is an astronomical number of records. The tool also allows you to hone in on a specific location on their maps and search any property that is within the area, even if it's not currently listed for sale or lease on the market. In addition to this you can find information on the current owner of a property, any tenants that live there, as well as tax records and APN, lender and mortgage history, historical lease and sale information and a lot more. You can also search the tenants and owners by industry or name and identify loans by their due date. It also allows you to compare properties that are similar and perform calculations on asking price trends. You can also make more than a dozen different types of reports which are customized by using their presentation ready report templates to share with your clients if you're a broker or an agent.
17. The Property Comps Tool is just as helpful
The Property Comps tool allows users to search through more than 1.3 million sales comps and you can also begin appraisals on the LoopNet site. Another great thing about this tool is that the sales comps are usually available on the site before public record and they are updated daily. These comps are verified by the Research Team at Loopnet and they are taken from tax records, deed data and LoopNet.
18. LoopNet's Parent company acquired ForRent
Another useful resource was added to the CoStar Group family with a business that is named ForRent. The acquisition of this new business added millions of apartment.com Network renters. They acquired the company from Dominion Enterprises for a sum of $350 million cash an threw in an additional $35 million worth of CoStar Group stock. This business was aded to the Apartments.com network which is also a subsidiary of CoStar Group.
19. LoopNet and CoStar care about their community
The LoopNet team announced in November of 2016 that they were sponsoring a community food drive to help with the effort to stock local food banks and help locals in the community who were in need of food assistance. It was referred to as the CoStar Builds Thanksgiving Food Drive. Their office which is located in San Francisco, California joined forces with the San Francisco-Marin Food Bank in this effort. CoStar shred that they have made a commitment to give back to the community.
20. LoopNet also sponsors fun events for their users
LoopNet sponsored an event that they called the Cash Ride Contest. The contestants were to record their own video and they were charged with the task of showing their knowledge to prove that they were CRE experts. After the videos were submitted, they were viewed by Facebook viewers who in turn voted on the videos. This was a fun event that the company scheduled to get people involved and to build a sense of community. They're very astute at using a variety of methods for bringing people together and having some good old fashioned fun.
LoopNet has also sponsored other community events, such as the contest to win a brand spanking new Fender guitar. These are just a few examples of how they reach out to their audience and establish a good relationship with them. At LoopNet, everyone is important and they try to keep their employees actively engaged with community activities, while reaching out to the community members in meaningful ways. It's no wonder that they've grown to become the largest company of their kind in with commercial real estate industry. LoopNet is one of those unique companies that everyone seems to feel good about joining.
Written by Dana Hanson
Read more posts by Dana Hanson