INDEPENDENCE, MO. — A consent decree from the Federal Trade Commission (FTC) — stemming from the merger between CoStar Group and LoopNet — has paved the way for competing firm Xceligent to expand into the nation’s top 65 commercial real esate markets.
The expansion plan is made possible by an investment from Stamford, Conn.-based dmg :: information (dmgi), a business-to-business information company. The new funds will enable Xceligent to match CoStar’s nationwide footprint.
Xceligent currently employs 210 people and provides real estate information services to 30 markets in the U.S., including second-tier cities such as Milwaukee. Part of the FTC consent decree is for Xceligent to expand to 65 markets within the next 3 years.
“For years, those who use commercial real estate information in metro areas like Chicago, New York, Washington, D.C., Miami, Seattle, and other top-tier markets have had to rely for the most part on a single source,” said Doug Curry, Xceligent’s founder and CEO. “Now, they will have a cost-effective, competitive alternative.
“Our pricing strategy is based on the idea that with primary research being done in small towns in the Midwest … our cost structures are lower, allowing us to provide a similar level of service at a rate that is very competitive and reach a broader audience,” explains Curry.
DMGT, a London-based company that owns the British newspaper The Daily Mail as well as commercial real estate research firms such as Trepp LLC and Real Capital Analytics, is the owner of dmgi. After interviewing more than 30 prospective investment partners, Xceligent chose dmgi because of the parent company’s reputation.
“(DMGT) has a reputation of being vested in commercial real estate and to transitioning information companies to be the top in their sector,” explains Curry.
Xceligent recently completed its “relaunch” in the Atlanta market, which involved the inspection of approximately 40,000 commercial properties. Some 30 to 35 professionals from Xceligent lived in the Buckhead area for 3 to 4 months while they collected pertinent real estate data on the properties. Xceligent’s Atlanta database will officially go live this week.
Another facet of the FTC consent decree is for Xceligent to create a top property listing alternative to LoopNet, which was once Xceligent’s investment partner before the CoStar-LoopNet merger. That closely watched merger closed this spring. Xceligent plans to make an announcement at the International Council of Shopping Centers (ICSC) RECon convention in Las Vegas next week concerning that portion of the consent decree.
Additionally, Xceligent has acquired ePropertyData (ePD), a commercial real estate data platform, from Second Century Ventures, the strategic investment arm of the National Association of Realtors (NAR).
“Given that realtors are at the heart of the deal, we want to significantly expand and enhance the public search capabilities beyond what is available today to give industry professionals more exposure than they’ve ever had,” says NAR President Moe Veissi, broker-owner of Veissi & Associates Inc., in Miami. “Combining the experience of Xceligent and ePD was an obvious move for us in this sector’s next chapter.”
Xceligent’s expansion is taking off following the FTC consent decree, the details of which took several months to hammer out. For example, the firm plans to announce later this week that it will enter two major markets in the near term. The firm will also unveil a new technological product this week.
“(Xceligent’s expansion) will completely change the landscape of the industry as we know it,” said Curry.
Considering the firm’s investment partner, expansion plan and technological product offerings, Curry may very well be right.
— John Nelson