Company: LoopNet Inc.
Title: President and Chief Executive Officer
Time in current role: 6 years
Biggest accomplishment: Being part of the LoopNet team, which has created the largest online marketplace for commercial real estate listings in the industry
Short-term goal: Make deals happen for our users
In the world of online commercial real estate listings, LoopNet Inc. holds an ample lead. Not only has it grown into a giant and equally influential online presence, but the company also went public at a highly lucrative moment in the real estate cycle. The San Francisco-based company left the private realm last summer (Nasdaq: LOOP) while boosting its membership ranks by 58% from 1.2 million to 1.75 million during the full year.
“The industry is looking for the simplest and fastest way to search for properties,” according to LoopNet CEO Richard Boyle. “We offer a low-cost way to do just that. We're creating a way for supply and demand to connect on the Internet.”
Indeed, a highly active sales market has spurred LoopNet's growth. In 2006, U.S. investment sales transactions among properties $5 million and higher totaled $349 billion, up from $306 billion the previous year, reports Real Capital Analytics.
As of mid-February, LoopNet featured more than 3.4 million active for-sale commercial property listings valued at nearly $400 billion total. Investment sales offerings are just part of the package. The site also advertised roughly 3.2 billion sq. ft. of property for lease.
Boyle isn't content to remain idle as a simple listings site, either. The company has introduced several new services in recent months. One 2006 offering is the Recent Sales function, whereby LoopNet members can view recent deals that have closed in thousands of markets. It also lists how long a property remained on the market before it was sold.
LoopNet grew its revenues to $48.4 million in 2006, up 56% from the prior year. The company also enjoys solid financial health. In a February research note, Cantor Fitzgerald buy-side analyst Derek Brown referred to LoopNet's balance sheet as “pristine.” Brown also has a buy rating on LoopNet, which has averaged more than 875,000 unique visits per month during 2006. The stock was trading at $17 per share in late February, up from its float price of $12 per share last summer.
LoopNet's biggest competitor is CoStar Group (Nasdaq: CSGP), which went public in 1998. The two company profiles are hardly identical, though they do overlap on the listings side. As of late February, CoStar listed roughly 2.1 million properties on its site. One major difference is that Bethesda, Md.-based CoStar offers far more research than its West Coast rival.
What drives commercial real estate owners or brokers to utilize LoopNet? Suppose a Los Angeles office landlord wishes to sell his property, hypothesizes Boyle. With global demand for core office assets soaring, that owner wants to leverage the power of the Internet to market his building. For as little as $30 per month, LoopNet members can list their properties on a site that gets several hundred thousand unique visitors monthly.
Boyle says that LoopNet's mission to provide lower-cost marketing and listing options for the U.S. commercial real estate industry is no less relevant in a down market. “No matter what direction the market is going in, investors need the best possible information on that market.”
What's next for LoopNet? The company has entered into an agreement with Real Capital Analytics to bring added dimensions to the listings site using RCA's deep pool of industry metrics. Boyle believes that the combination of pure marketplace data and deeper market intelligence will give LoopNet members the best of both worlds. He is also boosting LoopNet's map search functions by overlaying property data onto detailed aerial maps.
“People are really realizing how powerful the LoopNet online marketplace really is,” says Boyle. “And with so much of the industry still working off-line, we see plenty of growth in our model over the next few years.”