CNBC's Diana Olick looks at the novel way CoStar is gathering commercial real estate information: By using low-flying, military-style reconnaissance planes with cameras.
The company's CEO Andy Florance says its multimillion dollar investment compiles about twice the info of its competitors, and is much more accurate than tracking construction activity through building permit volume, which is often revised.
"Investors, lenders, developers, people that manage apartment buildings need to understand exactly how much new competitive supply is coming into each sub-market or neighborhood so they can set rents, they can determine what additional inventory they want to build," said Florance, standing in a hangar in front of the small white plane. "This technology allows us to track construction activity in the United States in a way that no one has ever been able to do."
... CoStar not only mines the data to sell to clients, it also uses it to find clients. CoStar owns apartments.com, one of the largest rental websites in the nation. While it has a strong brand, not all apartment landlords know about it; CoStar can use the plane to find new apartment buildings and then market the website to those landlords. In the past year, CoStar claims it discovered 250,000 apartment units under construction that no one from the traditional information sources knew about.