YouSaid · the spoken record

Andy Florence

lines on the record: 94
first: 2026-04-23
most recent: 2026-04-23
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“Promise we're going to get the homes.com. But yeah, LoopNet is co star's commercial real estate marketplace. And so just to intermix things even more, you might say it's like the apartments.com equivalent, but for commercial properties. Meaning if you're looking for office space in Dallas or if you're a broker with a retail storefront to lease in Chicago, LoopNet is where you're going to go to browse. And so CoStar acquired LoopNet in 2012. And there was actually this question at the time about whether it was a good deal to do. And so CoStar Suite had commercial property listings already for professionals. So there was a question of why do you need a separate consumer-facing marketplace for this? But Andy Florence's insight was that they serve different use cases. Ghost Star Suite is the professional subscription tool with deep analytics, historical comp data, detailed research, and everything that serious professionals need.”
2026-04-23 · We Study Billionaires · TIP809: The Real Estate Data Empire Making a $5 Billion Bet: CoStar Group w/ Shawn O'Malley & Daniel Mahncke · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, I mean, as we talk about it today, I'm going back and forth because I have some hesitations. I am trying to think about how homes.com has better data than Zillow and the way that departments.com did. And that is a little bit questionable to me. And also homes.com really didn't have a very strong foundation of organic traffic to go on. So I do think what they're trying to do with homes.com is harder and probably harder than they initially thought, but I think your summary pretty much captures. This kind of business. No one else has co starts data. And again, there's no legal way for an LLM to scrape it.”
2026-04-23 · We Study Billionaires · TIP809: The Real Estate Data Empire Making a $5 Billion Bet: CoStar Group w/ Shawn O'Malley & Daniel Mahncke · IDENTIFIED FROM THE TRANSCRIPT
“Is a barrier to entry and it's an expensive one, especially in the short term. But the result is that today apartments.com generates roughly 1.2 billion dollars a year. So think about that from a 585 million dollar total acquisition price, a little over a decade ago, to now a billion dollar plus revenue stream. I mean, that is a really extraordinary return on investment. And it took eight to ten years to really fully build that out in a way that was sustainable and profitable.”
2026-04-23 · We Study Billionaires · TIP809: The Real Estate Data Empire Making a $5 Billion Bet: CoStar Group w/ Shawn O'Malley & Daniel Mahncke · IDENTIFIED FROM THE TRANSCRIPT
“Separate, specialized sales organization specifically for apartments.com. And it's a team that knows the multifamily rental market, including property management companies, the reeds and all the smaller landlords just inside and out. And so Andy Florence has said, and I'm going to paraphrase here, you cannot win a major marketplace without committed boots on the ground. You need salespeople who build real relationships with real property owners and managers. That's how you get supply on the platform. And once you have supply, demand follows because renters go where the listings are.”
2026-04-23 · We Study Billionaires · TIP809: The Real Estate Data Empire Making a $5 Billion Bet: CoStar Group w/ Shawn O'Malley & Daniel Mahncke · IDENTIFIED FROM THE TRANSCRIPT
“Ironically, it's pretty similar to what Google does with search results. So you have landlords and property management companies working on behalf of landlords who will pay for enhanced listings. And so that is basically just better placement and search results. It means being able to provide more photos of your property, the ability to directly receive rental applications from within the platform and more things like that. And so the more you pay, the more visibility you get. It is a pay-to-play dynamic. And crucially, CoSar is not generating revenue through any kind of lead diversion or clever advertising tricks. They're getting paid because they have built the most useful rental platform in the country on both sides for renters and for these property management companies. And so then the next phase, after monetization, has been maintaining this dedicated sales force that CoStar has built. And they have this.”
2026-04-23 · We Study Billionaires · TIP809: The Real Estate Data Empire Making a $5 Billion Bet: CoStar Group w/ Shawn O'Malley & Daniel Mahncke · IDENTIFIED FROM THE TRANSCRIPT
“Beautifully strange, but that's worked. It really has worked. I mean, why would anybody care about an apartment listing website, but they've found a way to make it cool and catchy or at least appealing in some way? And oh my gosh, I saw so many of those apartments.com ads when watching March Madness last month. And what they were hoping to do was not just get existing users to use the platform more, but they want to own just the entire category so that in people's minds, whenever somebody is ready to move, the first thing they think is, hey, I should check apartments.com.”
2026-04-23 · We Study Billionaires · TIP809: The Real Estate Data Empire Making a $5 Billion Bet: CoStar Group w/ Shawn O'Malley & Daniel Mahncke · IDENTIFIED FROM THE TRANSCRIPT
“CoSer did something that a B2B data company would not typically do, which is launch a major national television advertising campaign. And so the apartments.com jingle has got really, really recognizable. And you have Jeff Goldblum as a spokesman famously. And those ads were and still are everywhere. And you can think of the brand marketing as this way of accelerating growth in customer traffic once you've built a baseline of unique data and organic traffic.”
2026-04-23 · We Study Billionaires · TIP809: The Real Estate Data Empire Making a $5 Billion Bet: CoStar Group w/ Shawn O'Malley & Daniel Mahncke · IDENTIFIED FROM THE TRANSCRIPT
“Definitely right. And CoStar understands that as well as anyone. And that's been integral to their success. If you have 50,000 words of unique, high quality content descriptions about every apartment complex and let's say Phoenix, content that's not available anywhere else on the internet, Google is going to recognize that. Google is very good at what it does and they're going to rank you first. And when someone searches apartments in Phoenix, you are going to come up and that traffic is coming to you for free and it can compound thanks to this flywheel that gets created where you rank at the top and then Google sees that and then continues to recommend you and more people are satisfied with the search results and so on and so on. And so you really don't pay for that traffic once you've earned it once people start getting into the habit of saying I'm going to go to apartments.com and then phase two for them was brand advertising and building on that organic momentum and that data quality. And so”
2026-04-23 · We Study Billionaires · TIP809: The Real Estate Data Empire Making a $5 Billion Bet: CoStar Group w/ Shawn O'Malley & Daniel Mahncke · IDENTIFIED FROM THE TRANSCRIPT
“Phase one was content. So CoStar had this deep conviction that winning search traffic is fundamentally about having the best, most comprehensive content. And so not just listings, but listings plus photos and floor plans, amenity descriptions, neighborhood information, local school ratings, walkability scores, everything that you might want to know and more as a renter. And so they invested massively in the content quality on apartments.com. And so they sent field researchers out just like they did with building their commercial real estate database to physically photograph apartment communities. And from there, they created neighborhood profiles and built virtual tours before virtual tours were even commonplace. And so it is some.”
2026-04-23 · We Study Billionaires · TIP809: The Real Estate Data Empire Making a $5 Billion Bet: CoStar Group w/ Shawn O'Malley & Daniel Mahncke · IDENTIFIED FROM THE TRANSCRIPT
“What CoStar did over the following decade was execute one of the more impressive digital marketplace playbooks that I've seen. And so with this aggressive but very strategic advertising campaigns, they've managed to turn apartments.com profitable and into by far the biggest player in their market.”
2026-04-23 · We Study Billionaires · TIP809: The Real Estate Data Empire Making a $5 Billion Bet: CoStar Group w/ Shawn O'Malley & Daniel Mahncke · IDENTIFIED FROM THE TRANSCRIPT
“The story starts there with apartments.com. And that is what sets the stage for them to do what they're trying to now do with homes.com by wanting to become the go-to place for agents to list homes and for home shoppers like me a few months ago to find their next dream house. And so in 2014, CoStar acquired apartments.com for about $585 million. And that seemed like a really expensive deal because at the time it was a solid but not the most dominant rental listing property portal. And Zillow was arguably much bigger in rentals and rent.com was also a significant player too at that time. And so naturally people were skeptical about why this commercial real estate data behemoth would be buying a consumer-facing rental website.”
2026-04-23 · We Study Billionaires · TIP809: The Real Estate Data Empire Making a $5 Billion Bet: CoStar Group w/ Shawn O'Malley & Daniel Mahncke · IDENTIFIED FROM THE TRANSCRIPT
“Tends to be complementary and even genuinely counter cyclical, or at least they balance each other out. And so real estate obviously is not a monolith. And through their diversification, they have found ways to consistently grow the overall company. Like we've said a few times, if you can grow by double digits for 60 quarters in a row, which is 15 years, to be clear, then you've clearly weathered more than a few storms without the business, or at least the top line, taking any major setbacks.”
2026-04-23 · We Study Billionaires · TIP809: The Real Estate Data Empire Making a $5 Billion Bet: CoStar Group w/ Shawn O'Malley & Daniel Mahncke · IDENTIFIED FROM THE TRANSCRIPT
“And we're going to keep teasing it because I'm not ready to get to homes.com yet. But I do want to say, Andy likes to make the point on earnings calls that this diversification, especially across the commercial real estate businesses, is in itself a form of resilience. And so in any given market environment, some parts of the commercial real estate ecosystem are going to be suffering, while others might be thriving. And so during COVID, hospitality was crushed, but industrial was booming. And during a rate hike cycle, transaction volume falls, but lease management becomes more complex as companies try to optimize costs. And actually during downturns, that's when landlords need the most help getting their spaces filled, reducing occupancies. And so that is something CoStar can help a lot with. And so those subscriptions remain intact, even as the broader industry can fall off. And so in a few ways, their portfolio of businesses”
2026-04-23 · We Study Billionaires · TIP809: The Real Estate Data Empire Making a $5 Billion Bet: CoStar Group w/ Shawn O'Malley & Daniel Mahncke · IDENTIFIED FROM THE TRANSCRIPT
“to comply with accounting standards like ASC 842, which Google it. It's a fun one to say. It's a mouthful. The TLDR of that is that it requires recognizing leases on the balance sheet. And so Visual Lease provides tools that help with landlords and lease management companies. It helps them ensure that they're in compliance using CoStar software. So that's another category of what I would call very, very sticky B2B subscription revenue.”
2026-04-23 · We Study Billionaires · TIP809: The Real Estate Data Empire Making a $5 Billion Bet: CoStar Group w/ Shawn O'Malley & Daniel Mahncke · IDENTIFIED FROM THE TRANSCRIPT
“Yep. So there are a few important ones we should talk about. So CoStar for lenders is their platform that extends their offerings to banks and debt funds who are underwriting commercial loans and need to verify collateral, assess market conditions, track existing borrowers and all that kind of stuff. And it's a newer product, but I do think it's one where they see enormous opportunity. They also acquired STR a few years ago. And so STR is the leading data provider for the hospitality industry. So they're tracking hotel supply and demand and occupancy rates and all that sort of stuff. And it's basically an extension of the same basic model into another real estate adjacent vertical. And then they also have something called visual lease and real estate manager. And these are SaaS platforms for comparing real estate, helping really large companies manage their lease portfolios. So for landlords. And as more landlords need”
2026-04-23 · We Study Billionaires · TIP809: The Real Estate Data Empire Making a $5 Billion Bet: CoStar Group w/ Shawn O'Malley & Daniel Mahncke · IDENTIFIED FROM THE TRANSCRIPT
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2026-04-23 · We Study Billionaires · TIP809: The Real Estate Data Empire Making a $5 Billion Bet: CoStar Group w/ Shawn O'Malley & Daniel Mahncke · IDENTIFIED FROM THE TRANSCRIPT
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2026-04-23 · We Study Billionaires · TIP809: The Real Estate Data Empire Making a $5 Billion Bet: CoStar Group w/ Shawn O'Malley & Daniel Mahncke · IDENTIFIED FROM THE TRANSCRIPT
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2026-04-23 · We Study Billionaires · TIP809: The Real Estate Data Empire Making a $5 Billion Bet: CoStar Group w/ Shawn O'Malley & Daniel Mahncke · IDENTIFIED FROM THE TRANSCRIPT
“Of how to use a system in the historical data your team has built up in it, the integrations with your internal systems, all of that creates a very deep lock-in with high switching costs. And it's very, very similar to Salesforce, right? We talked about that a lot with Salesforce. And that is a form of moat. If it's hard for your customers to leave, whether they like you or not. And I think this is pretty incredible. But management has said one of the biggest drivers of their annual churn is not from people switching to competitors products, but just simply from their customers going out of business. That's crazy. CoStar accounts get canceled because the business using them goes out of business, not because someone is switching to a competitor.”
2026-04-23 · We Study Billionaires · TIP809: The Real Estate Data Empire Making a $5 Billion Bet: CoStar Group w/ Shawn O'Malley & Daniel Mahncke · IDENTIFIED FROM THE TRANSCRIPT
“As you'd expect, it's all subscription based, tiered by the breadth of access to data that you wanted. So a basic CoStar Suite subscription is probably like $5,000 to $10,000 a year per user, scaling significantly from there depending on how many markets you need data on, which analytics modules you're using, whether you're accessing loan data, international data, and just all the different ways they can package things. And so enterprise level deals can reach hundreds of thousands of dollars annually. And actually, the renewal rates are really exceptional. Once a brokerage firm or investment fund integrates CoStar Suite into their workflow, and once their analysts are used to pulling comp data on it every day, running models against it, doing due diligence through CoStar, the switching cost just becomes absolutely enormous. And so you're changing how your entire team works and the institutional knowledge.”
2026-04-23 · We Study Billionaires · TIP809: The Real Estate Data Empire Making a $5 Billion Bet: CoStar Group w/ Shawn O'Malley & Daniel Mahncke · IDENTIFIED FROM THE TRANSCRIPT
“On a couple of those key markets. And I correspondingly think the organic growth runway for the data business alone, the core business, is very, very strong, independent of these more speculative bets like homes.com that they've invested in, which we'll get to and talk more about.”
2026-04-23 · We Study Billionaires · TIP809: The Real Estate Data Empire Making a $5 Billion Bet: CoStar Group w/ Shawn O'Malley & Daniel Mahncke · IDENTIFIED FROM THE TRANSCRIPT
“And their financial resources, that database does not translate easily internationally, right? Like somebody in Hamburg does not care about a property in New York City. And so you have to start from scratch. You're going building by building, city by city and country by country. And the international part of the story is where there's still very, very early. And maybe the analogy to use is it reminds me of Google Maps where you have these Google vehicles with cameras attach, driving around and mapping all the roads. And it was one thing to do that in the US, which is where CoStar is at now. But now you're going to do that with the rest of the world. And so, for example, they've only recently launched in Spain. And they're also focused on building out in the UK, in Germany, and France. And that is still just scratching the surface of India, China, Japan, right? There's so much more that they could do this. But like I said, they're focusing on.”
2026-04-23 · We Study Billionaires · TIP809: The Real Estate Data Empire Making a $5 Billion Bet: CoStar Group w/ Shawn O'Malley & Daniel Mahncke · IDENTIFIED FROM THE TRANSCRIPT
“Time we were talking before, Daniel, like you were saying you don't think anything really like this even exists in Germany, right? So there's a lot of countries that they can expand into and they're not even done probably capturing all the value that they can in North America. So I feel like 60 consecutive quarters of double digit revenue growth. I don't know how long it can be sustained for, but I would pretty good confidence say in 10 years from now they'll probably still be growing the business at eight to 10% a year. And so I think just to be clear, a big part of the gap in their penetration globally is because mapping out details on every commercial property in one city alone is really, really hard, let alone an entire country. So it took them four decades to get to a place where you could say they've done a pretty good job with North America. But besides their experience,”
2026-04-23 · We Study Billionaires · TIP809: The Real Estate Data Empire Making a $5 Billion Bet: CoStar Group w/ Shawn O'Malley & Daniel Mahncke · IDENTIFIED FROM THE TRANSCRIPT
“That is maybe one of the more exciting arguments of the bull case in thinking about how big the TAM is, because CoStar estimates they're only penetrating about 3% to 4% of the, and this is the keyword, global total addressable market for professional CRE data, right? Because they're mostly focused on really just entirely North America or historically they have been. And so if you think about what that means, though, for their compounding runway, if they can just take this playbook and recreate it in other developed markets around the world, it's very, very compelling in the sense of how long that runway is, right? They're the dominant player. They've been at this for 37 years. They have tons of capital that can be used on investing into building out their database of information on global commercial real estate properties. And like I said, by some ways you draw it up, there may be at three to four percent penetration globally. I think that probably is wishful thinking, but also at the same time.”
2026-04-23 · We Study Billionaires · TIP809: The Real Estate Data Empire Making a $5 Billion Bet: CoStar Group w/ Shawn O'Malley & Daniel Mahncke · IDENTIFIED FROM THE TRANSCRIPT
“in that area, right? You're about to build a bunch of Amazon data centers and it's going to create 10,000 jobs as a developer. You need to know that and then figure out the best ways to map out how you're going to help meet that demand by creating more supply of workers in those spaces. And so there's a lot of different reasons that people would use CoStar's data. And I think it's fair to say all of these people need comprehensive property data. They want comparable transaction history, right? See what similar properties sold for. You want market analytics like vacancy rates and supply and demand dynamics, maybe like population demographics in a certain area, and then also cap rate trends, what sort of returns are people earning on these similar investments, what's happening with interest rates, all that stuff. And so CoStar Suite provides all of that data in much, much more. And it lasts count, they had about 270,000.”
2026-04-23 · We Study Billionaires · TIP809: The Real Estate Data Empire Making a $5 Billion Bet: CoStar Group w/ Shawn O'Malley & Daniel Mahncke · IDENTIFIED FROM THE TRANSCRIPT
“CoStar Suite is the best place to start because it's kind of the foundation of the business. It's the go to subscription data platform for commercial real estate professionals. And if you don't know what that means, again, just think Bloomberg for commercial real estate. You still don't know what that means, go read about Bloomberg. But just to take a step back, think about everyone directly and indirectly involved in these typical commercial real estate transactions. It's a huge, huge market. And you've got the broker listing of building for sale. You've got the broker trying to find space for a tenant. You've got an institutional investor that may be deciding whether they want to buy an office building or not. They're lenders often involved, right? Of whether they're going to make a $50 million loan against some building as collateral to fund a deal. And then you have developers analyzing whether to build new apartments in an area based on the commercial activity.”
2026-04-23 · We Study Billionaires · TIP809: The Real Estate Data Empire Making a $5 Billion Bet: CoStar Group w/ Shawn O'Malley & Daniel Mahncke · IDENTIFIED FROM THE TRANSCRIPT
“It's probably fair to say that Andy Florence is obsessively competitive. And we will see that, I would guess, today as we talk more about some of the approaches CoStar has used to defend their intellectual property, but he is very, very protective of what he's built and very, very competitive.”
2026-04-23 · We Study Billionaires · TIP809: The Real Estate Data Empire Making a $5 Billion Bet: CoStar Group w/ Shawn O'Malley & Daniel Mahncke · IDENTIFIED FROM THE TRANSCRIPT
“More than 1% of it to say the least. And so just to talk about Andy a little more, I mean, he is a character. Having read through dozens of his earnings call transcripts and he has this really unique combination of being what I would say is deeply analytical. He'll cite very specific data points down to the third decimal place off the top of his head. And then you'll also just be really optimistic sometimes to the point of almost being poetic about the company's opportunity. Others might call it delusional. If you're a pessimist on the business and so like he'll describe their addressable market as the largest and most important untapped opportunity of our generation and he actually once said with total sincerity, we may be appearing optimistic and that is how we are. And I mean, at least he's honest about it. But when you've compounded revenue for 59 consecutive quarters the way they have, a double digit percentage is, I don't.”
2026-04-23 · We Study Billionaires · TIP809: The Real Estate Data Empire Making a $5 Billion Bet: CoStar Group w/ Shawn O'Malley & Daniel Mahncke · IDENTIFIED FROM THE TRANSCRIPT
“That's right. Yeah, he's still a CO. It's one of the longer founder CEO tenures in American business. But despite being founder-led, I was really disappointed at the amount of insider ownership here. I mean, you normally expect someone like this to own a really large stake in the business, but a stake is only worth about $70 million and it's less than 1% ownership in the overall company. And maybe to play Devil's Advocate just to be fair, a big part of that is because they've issued so much equity over the year. They've done so many acquisitions. Naturally, his original stake in the business has become diluted over time. And if anything, you could maybe argue that the fact that he doesn't have a bigger stake is a reflection of him not being exceedingly compensated with stock-based comp packages. And so there's always two sides to everything, but still, when you think about looking at somebody that's run a business for nearly 40 years and founded it, I would have hoped that he would own.”
2026-04-23 · We Study Billionaires · TIP809: The Real Estate Data Empire Making a $5 Billion Bet: CoStar Group w/ Shawn O'Malley & Daniel Mahncke · IDENTIFIED FROM THE TRANSCRIPT
“Well, so Andy Florence estimates that they've spent more than $5 billion on cumulative investments in research, technology, data collection, and also, as anybody who works in data science, there's a lot of data cleaning. You get a lot of raw numbers and then you actually have to figure out how to organize and process them in a way so that it's usable. And the result is that if you're a commercial real estate professional in the United States, you're a broker, maybe an investor, a lender, or a developer, co-star suite is really treated as essential, which is not to say everybody loves it. It's a very important caveat. Many people see it as a huge pain in their side, but it is arguably the Bloomberg terminal of its industry. There really is not.”
2026-04-23 · We Study Billionaires · TIP809: The Real Estate Data Empire Making a $5 Billion Bet: CoStar Group w/ Shawn O'Malley & Daniel Mahncke · IDENTIFIED FROM THE TRANSCRIPT
“And decide to replicate 37 years of proprietary data collection. I mean, it would take billions of dollars in many, many years. And by the time you'd finish, CoStar would just be much further ahead of you because they've been continuously collecting data at full speed that entire time as well. So it's really not clear to me how any competitor could truly catch up to CoStar on a one-to-one basis.”
2026-04-23 · We Study Billionaires · TIP809: The Real Estate Data Empire Making a $5 Billion Bet: CoStar Group w/ Shawn O'Malley & Daniel Mahncke · IDENTIFIED FROM THE TRANSCRIPT
“Property by property, city by city. And the remarkable thing is that the company never really stopped doing that. Even today, CoStar employs thousands of field researchers who are out visiting properties, verifying data, taking photos. And in a way, that's part of the moat. But it's also a very costly thing that's built into their business structurally. It's just, it's an overhead cost. They really can't get rid of. And so obviously it is a much more sophisticated process now. There's satellite imagery involved. There's these automatic data feeds and machine learning and AI and all that stuff. But there's still a genuine boots on the ground element that just cannot be fully replicated by software alone. AI can take a lot of jobs, but if you're an on the ground rep for co-star, I think for now your job is pretty safe. There's no AI that's coming to replace you. And so this all creates what I think is a fairly large motor. A competitor cannot just wake up one day.”
2026-04-23 · We Study Billionaires · TIP809: The Real Estate Data Empire Making a $5 Billion Bet: CoStar Group w/ Shawn O'Malley & Daniel Mahncke · IDENTIFIED FROM THE TRANSCRIPT
“Information as much as they could possibly get, and then they would compile all of that, and they would sell it to these paid subscribers who wanted access to that information on floppy disks. So that's what the original business was.”
2026-04-23 · We Study Billionaires · TIP809: The Real Estate Data Empire Making a $5 Billion Bet: CoStar Group w/ Shawn O'Malley & Daniel Mahncke · IDENTIFIED FROM THE TRANSCRIPT
“Absolutely. And billions and billions of dollars were being incrementally allocated based on incredibly limited information, right? If you think about how much information we like to have investing in a stock, that is probably not the amount of information that people had available to make decisions on commercial real estate properties, especially through three or four decades ago. And so Andy was about 24 at the time. His big idea was that he was going to go and try and fix this. he started CoStar Group in 1987. And the initial business was honestly just really unglamorous for as passionate as I think he was about it. What he did was he sent these researchers out into the field with clipboards and cameras and they would physically visit commercial properties and they would document everything from the square footage of it, who the current tenant is, what the asking rent is, how much available space there is. They would take photographs of the building and just really whatever.”
2026-04-23 · We Study Billionaires · TIP809: The Real Estate Data Empire Making a $5 Billion Bet: CoStar Group w/ Shawn O'Malley & Daniel Mahncke · IDENTIFIED FROM THE TRANSCRIPT
“No systematic data, there's no database, and there is no way to just quickly answer the question what's available? What is the property worth? And then what is the market doing around that property?”
2026-04-23 · We Study Billionaires · TIP809: The Real Estate Data Empire Making a $5 Billion Bet: CoStar Group w/ Shawn O'Malley & Daniel Mahncke · IDENTIFIED FROM THE TRANSCRIPT
“The founder and CEO is a guy named Andy Florence, and his story is one of the more unusual founding stories I've come across. And so like me, Andy grew up at the Washington, D.C. area. And by the time he was in his early 20s, he had this very specific frustration that kept bothering him. And it was that commercial real estate was one of the most opaque markets in the world. So if you think of the efficient markets hypothesis and the spectrum of the stock market maybe being closest to being the most efficient, commercial real estate was all the way on the other side of the spectrum where you have huge gaps of asymmetric information between maybe what the seller of the property knows and what the buyer of the property knows and the discoverability of that information. So, you know, if you were a broker trying to find office space for a client in 1987, what you were doing was essentially calling other brokers and just flipping through newspaper listings and then driving around neighborhoods.”
2026-04-23 · We Study Billionaires · TIP809: The Real Estate Data Empire Making a $5 Billion Bet: CoStar Group w/ Shawn O'Malley & Daniel Mahncke · IDENTIFIED FROM THE TRANSCRIPT
“I think there's three big questions. Firstly, is the core commercial real estate data business? Is it as special as it looks from the outside and based on the way people talk about it? And people usually frame their B2B data service as being like the Bloomberg terminal of commercial real estate. And one of the things I wanted to look into is to try and understand how true that is. And so secondly, does all their spending on a residential property between their circle of competency in commercial real estate with homes.com, does that make strategic sense given all the pain they're feeling in the short term? And thirdly, is management's judgment trustworthy given what they've been able to deliver return-wise historically to shareholders? Because this is a company that has issued a lot of equity over the years.”
2026-04-23 · We Study Billionaires · TIP809: The Real Estate Data Empire Making a $5 Billion Bet: CoStar Group w/ Shawn O'Malley & Daniel Mahncke · IDENTIFIED FROM THE TRANSCRIPT
“Dramatically underperformed is probably the way to put it right in the last five years where you have the SP 500 up around 70%. CoStar stock has been down more than 10%. And then just in the last year, you've seen something like a 50% sell-off at the time of recording and co-star. And so one of the most prominent activist investors in the world, third point run by Dan Loeb, published an open letter in January 2026 essentially calling for a board overhaul and demanding the company pull back on residential spending. So we have a lot to get through today, I think. It might be a long episode.”
2026-04-23 · We Study Billionaires · TIP809: The Real Estate Data Empire Making a $5 Billion Bet: CoStar Group w/ Shawn O'Malley & Daniel Mahncke · IDENTIFIED FROM THE TRANSCRIPT
“that that will be what enables homes.com to win long term. But in the meantime, they're just investing tons and tons and tons of money in trying to create a brand around this new product”
2026-04-23 · We Study Billionaires · TIP809: The Real Estate Data Empire Making a $5 Billion Bet: CoStar Group w/ Shawn O'Malley & Daniel Mahncke · IDENTIFIED FROM THE TRANSCRIPT
“I wish I could say homestock.com. It was Zillow. I'm guilty of his charge. It's not because I have any special loyalty to Zillow, but for a long time, they've definitely had the best name recognition. And honestly, casually scrolling Zillow and maybe nowhomes.com, it's just fun, right? You're just, you're looking at all these interesting properties and doing that kind of became a habit for my wife and I. And we'd actually have these like date nights where we'd pull up Zillow on the TV and then just scroll through listings, sort of kind of half seriously fantasizing about what our lives would look like in all these different homes. And then we actually found one. We loved. And now I do have a significant investment in real estate. I think to say the least. But from what I can tell from a user perspective, it is hard to meaningfully articulate any differences between Zillow and home.com. But on the back end, there are some very big differences in how their business models work. And CoSar's hopes hoping.”
2026-04-23 · We Study Billionaires · TIP809: The Real Estate Data Empire Making a $5 Billion Bet: CoStar Group w/ Shawn O'Malley & Daniel Mahncke · IDENTIFIED FROM THE TRANSCRIPT
“Do and that's the big story with CoStar right now. And the reason it's generating so much controversy is that over the last five years, they have been pouring enormous amounts of money into trying to crack into the residential real estate market. So they've invested something like $5 billion into their own consumer facing real estate website called homes.com to compete directly with Zillow and also realtor.com. And I had never heard of it until they started running this blitz of Super Bowl ads with Dan Levy.”
2026-04-23 · We Study Billionaires · TIP809: The Real Estate Data Empire Making a $5 Billion Bet: CoStar Group w/ Shawn O'Malley & Daniel Mahncke · IDENTIFIED FROM THE TRANSCRIPT
“You're not alone on that because despite being close to a $30 billion company with revenues north of $3 billion a year, CoSars is genuinely not that well understood by most investors. And it's a business that's enjoyed nearly 60 consecutive quarters of double-digit revenue growth, which is just astounding. And then you have $2 billion in cash net of debt, then nearly 50% profit margins on its core business. So things look very good. And the company operates in this niche that's invisible to consumers like you and I. And until recently, it was primarily a B2B data and analytics provider. A little bit of jargon there. And as you know, probably not the kind of thing that is always coming up at dinner parties unless you have a bunch of commercial real estate brokers dining together.”
2026-04-23 · We Study Billionaires · TIP809: The Real Estate Data Empire Making a $5 Billion Bet: CoStar Group w/ Shawn O'Malley & Daniel Mahncke · IDENTIFIED FROM THE TRANSCRIPT
“It's both. It's so boring that most investors have probably never heard of CoStar Group. And yet, it's a company that just reported its 59th consecutive quarter of double-digit revenue growth through COVID and through the 2022 rate hike cycle that crushed commercial real estate in transaction volumes”
2026-04-23 · We Study Billionaires · TIP809: The Real Estate Data Empire Making a $5 Billion Bet: CoStar Group w/ Shawn O'Malley & Daniel Mahncke · IDENTIFIED FROM THE TRANSCRIPT
“Think about every commercial building in America, every office tower, every strip mall, every apartment complex, every warehouse. Now imagine that for 40 years there's one company that has had people physically visiting each one of those properties, recording what they see, photographing the buildings, and compiling the most comprehensive database to digitalize commercial real estate in the world.”
2026-04-23 · We Study Billionaires · TIP809: The Real Estate Data Empire Making a $5 Billion Bet: CoStar Group w/ Shawn O'Malley & Daniel Mahncke · IDENTIFIED FROM THE TRANSCRIPT