“The industry at some point will respond”: These were the words of Brett White, CEO of leading commercial real estate agency Cushman & Wakefield in response to the acquisition of property transaction platform Ten-X by data giant CoStar back in May. The acquisition seems to have put a few noses out of joint among commercial brokerage firms in the US who feel that CoStar is encroaching on their business by getting closer to the transaction with the purchase of a platform that directly facilitates real estate auctions.
Speaking to Bisnow, White was clear in his assessment of the situation:
"If you cross a line, either to go to nonutility pricing or to be competitive, you need to know that the industry at some point will respond in one form or another. And I think with the recent purchase CoStar has made, it feels like we may be getting closer to that inflection point."
By way of a response, the CEO of CoStar Andy Florance said in an interview with the same source:
"What Brett White ought to be feeling here is actually confident that, when CoStarbuys a Ten-X, you have a partner, a client, a firm that pays you millions and has been a trusted partner for 35 years that has bought a company that, in someone else's hands, might be competitive, but in CoStar's hands is not going to be competitive and is going to support the brokers like we have for 35 years,"
Going on to cite the fact that Cushman & Wakefield have benefited from Ten-X to the tune of $140 million and that anyone wishing to use the platform must have a brokerage licence, Florance said that the accusation had been consistently levelled against CoStar since 1987.
Certainly, the issue of data or portal companies encroaching on the turf of their intermediary customers is nothing new and is likely to become more of a hot topic in the coming years as big companies in consolidated markets look to get closer to the transaction to expand their revenue. The topic was addressed by several speakers at The Global Online Marketplaces Summit held this week. Stay tuned for speaker video and analysis.