ABOVE SOUTHERN MARYLAND — Andy Florance is spying on millions of miles of real estate in the United States and around the world, as his team is doing on this day over the suburbs of Washington.
Using a low-flying, military-grade reconnaissance plane, equipped with cameras once used to gather data over Iraq and Afghanistan, CoStar Group, a commercial real estate information company, is gathering about twice as much construction data as its competitors. It is exactly what CoStar CEO Florance envisioned a year ago, when he made a multimillion dollar buy into the technology.
"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."
The government tracks commercial construction data, as do other companies, through building permits, but it is often revised over and over and is never exact. CoStar, like its competitors today, used to put more than 1,000 researchers in cars crisscrossing the nation to gather data from the ground. That is time-consuming, tedious and expensive. It would take CoStar, for example, a year to fully cover the Baltimore area; with the small Cessna plane and mapping system, it can do it in three days, with far more accuracy and cost efficiency.