W&D Webcast: CoStar’s Florance Says It’s “Early Days” for Digital Impact
He’s increased his company’s market cap a thousand-fold since 1998, to what is now nearly $26 billion. The company owns some of the leading digital information, analytics and marketing brands in real estate, from LoopNet to Apartments.com, a roster that soon will be joined by Ten-X.
But in the view of CoStar Group founder and CEO Andy Florance, the digitization of real estate information is just getting started. “These are early, early days” for digital impact, Florance said in the latest Walker & Dunlop webcast hosted by CEO Willy Walker.
The sheer enormity of the real estate sector is one reason Florance sees untapped potential. He cited figures measuring the value of all real estate globally, including residential property, at about $180 trillion. That compares to the value of the world’s public companies: $90 trillion. Further, the economic activity generated by the real estate has a multiplier effect of five, for approximately $1 quadrillion of activity.
Florance noted that in the current pandemic environment of stay-at-home orders and social distancing, there has been “an explosion of people shopping for space digitally.” In the apartment sector, he noted, renters have become comfortable with touring homes digitally.
“People no longer feel like they have to go to the community” in person, he said. “It’s like Amazon—they can buy it online.”
The commercial sector, though, has some catching up to do. “Most people are marketing their real estate like it’s 1975,” said Florance. “And it’s not 1975.”
A real estate community unified by digitization is potentially more important than the data itself, Florance said. Hampering the formation of such a community is a lack of standardization in information presentation across the industry. He likened it to traveling by train through several towns, each of which has a different gauge of rail, meaning that the traveler has to change trains several times.
Wednesday’s hour-plus webinar began with insights from John Rice, a Walker & Dunlop board member and CEO of Management Leadership for Tomorrow, who addressed the systemic racism that gave rise to nationwide and even worldwide protests following the death of George Floyd at the hands of Minneapolis police. “Take a rigorous approach to action” at the organizational level, Rice advised. “Don’t settle for random acts of diversity.”
Replays of the June 3 webcast are available by clicking here.
For comments, questions or concerns, please contact Paul Bubny