Most of you, being the intelligent, well informed and good looking bunch that you are, likely already know of the announcement by leasing workflow platform VTS about their new market data product. This tool will, as CEO Nick Romito puts it, “can show average base rents, tour activity, what kinds of industries are looking and average transaction times for different industries.”
While there was no foreshadowing of this move by the team it should not come as a surprise. Back in 2016, when VTS raised $55 million in their Series C round, Romito explained his vision for the company:
“We see our opportunity as capturing more market share among global real estate investors, landlords and brokers, so we can become the single platform upon which the entire industry is managed. A side effect of that is that we generate a ton of data for our clients to harness and use to improve performance. The opportunity is marrying the best software in the industry with some very powerful data.”
Even further back, when VTS raised their Series B round Nick also had a notable quote, saying “We don’t want to be a part of the ecosystem, we want to be the place where all commercial real estate happens.” This sentiment was reinforced when VTS merged with their biggest competitor, Hightower. Rather than be the leading leasing management company, the VTS team and investors were willing to give up some of their company to bring on Hightower and be THE leasing management company.
The move was likely less defensive posturing and more big-picture thinking. Creating a management platform was probably never the end game, it was just a way to capture valuable data. Bringing on Hightower was a great way to fast track data acquisition and onboard a great team to boot.
When it comes to data, you either have everything or you have nothing. CoStar has been able to stand alone as the main place for the commercial real estate industry to research properties, even with their exorbitant prices, because they are the only place to find comprehensive data for almost every property in the country. They too saw the power of being the one source of listing data and showed their commitment to being that source by buying LoopNet.
Whether or not VTS will compete directly with CoStar is yet to be seen but their new tool represents another option for brokers, managers, landlords and corporate occupiers when it comes to understanding a market. The increasing amount of data options for the real estate industry is a good sign, competition usually helps the consumer. But all of the new data tools need to get to a place where they can be the only tool that an industry pro needs.
VTS has a great start on getting a comprehensive data set for commercial real estate. As they improve their product it will likely keep growing. Eventually, they could get to the point where they could rival other data providers as it seems like that was their plan all along.