Virtual Premise, Inc. to become CoStar Real Estate Manager
- Strategic acquisition will combine industry leading lease management tools with CoStar’s comprehensive information platform
- Virtual Premise sales are expected to benefit from CoStar’s large sales force
- Virtual Premise manages approximately $1 billion a month in rent payments
WASHINGTON, Oct. 26, 2011 — CoStar Group, Inc. (Nasdaq:CSGP), commercial real estate’s leading provider of information and analytic services, today announced the acquisition of Virtual Premise, Inc., a leading independent provider of SaaS-based real estate information management solutions. The Atlanta-based, privately held company develops and hosts real estate management software and provides lease abstraction services for over 250 major corporations, commercial real estate brokers, retailers and property owners. Virtual Premise’s subscription-based clients use the SaaS (software as a service) solutions to increase the efficiency of real estate management processes, reduce occupancy costs and improve utilization of real estate assets. The company’s lease administration module allows clients to manage and monitor lease expirations, rental payments, renewal options and transactions and projects.
M. Andrew Thomas, Virtual Premise’s President and Chief Operating Officer since 2001, will continue to lead the Virtual Premise team of approximately 50 professionals based in Atlanta as a division of CoStar Group. CoStar plans to combine Virtual Premise with its Atlanta-based operations, growing its Atlanta presence to nearly 100 employees.
“We are excited about working with Andy Thomas and the team at Virtual Premise,” said Frank A. Carchedi, Senior Vice President of Corporate Development at CoStar. “The combination of CoStar data and design elements with Virtual Premise’s products are expected to lead to more efficiency for brokers, greater transparency and more transactions. We also believe we can significantly grow Virtual Premise’s revenue by building upon their sales force of seven individuals in two locations with CoStar’s sales force of approximately 200 people in 30 locations.”
“The addition of Virtual Premise is expected to provide substantial value to CoStar’s significant base of commercial real estate brokerage clients, which they in turn can pass on to their clients,” Carchedi added. “We also see a tremendous opportunity to grow market share in the lease management space, which is very fragmented with over two dozen participants, all with less than 5% market share. Lease data hosted by Virtual Premise will remain strictly confidential.”
“Our software manages over $1 billion in rent payments a month,” said Thomas. “Our clients use our software to simplify the management of their real estate assets. We believe that combining Virtual Premise with CoStar will enhance the value we provide our customers who desire comprehensive, real-time property and market intelligence that allows them to move quickly and make decisions more easily.”
Prior to joining Virtual Premise in 2001 as COO, Thomas was with Equitable Real Estate for 12 years where he served as an Executive Vice President. As Managing Director of RealEstate.com, he oversaw the launch of its commercial website, negotiating agreements with strategic partners in both the real estate and technology arena. As Managing Director of Portman Holdings, he was responsible for fostering relationships with capital sources and developing capital strategies for Portman’s worldwide development projects. Thomas received an MBA from the University of Pennsylvania’s Wharton School and a BS in Building Construction from the Georgia Institute of Technology.
CoStar acquired Virtual Premise in an all cash transaction valued at approximately $17.0 million net of cash acquired. A more detailed discussion of the acquisition is planned for CoStar’s Third Quarter Financial Results Conference call at 11:00 am EDT on Thursday, October 27, 2011.
About Virtual Premise
Virtual Premise, Inc. is a leading SaaS provider of real estate information management solutions for corporations, retailers, landlords and commercial real estate service providers. With Virtual Premise, companies have a smart, easy way to collect, manage and report on complex real estate information from anywhere, at any time. Virtual Premise technology solutions include strategy and analytics, portfolio management, lease management, lease administration, project management, transaction management, and document management. Virtual Premise also offers a wide range of supporting services to include lease abstracting, document management services, data validation, due diligence support, and best practices consulting. In addition, the company is taking a thought leadership role in preparing its solution for the upcoming FASB lease accounting changes.
About CoStar Group, Inc.
CoStar Group (Nasdaq:CSGP) is commercial real estate’s leading provider of information and analytic services. Founded in 1987, CoStar conducts expansive, ongoing research to produce and maintain the largest and most comprehensive database of commercial real estate information. Our suite of online services enables clients to analyze, interpret and gain unmatched insight on commercial property values, market conditions and current availabilities. Headquartered in Washington, DC, CoStar maintains offices throughout the U.S. and in Europe with a staff of approximately 1,500 worldwide, including the industry’s largest professional research organization. For more information, visit www.costar.com.
This news release includes “forward-looking statements” including, without limitation, statements regarding CoStar’s expectations, beliefs, intentions or strategies regarding the future. These statements are subject to many risks and uncertainties that could cause actual results to differ materially from these statements. More information about potential factors that could cause actual results to differ materially from those discussed in the forward-looking statements include, but are not limited to, those stated in CoStar’s filings from time to time with the Securities and Exchange Commission, including CoStar’s Form 10-K for the year ended December 31, 2010, and Form 10-Q for the quarter ended June 30, 2011, under the heading “Risk Factors.” In addition to these statements, there can be no assurance that Virtual Premise sales will benefit from CoStar’s large sales force; that Virtual Premise’s services will increase the efficiency of real estate management processes, reduce occupancy costs and improve utilization of real estate assets as stated in this press release; that CoStar will combine its Atlanta-based operations when and as expected; that the combination of CoStar data and design elements with Virtual Premise’s products will lead to more efficiency for brokers, greater transparency and more transactions; that CoStar can significantly grow Virtual Premise’s revenue by building upon their sales force with CoStar’s sales force; that the addition of Virtual Premise will provide significant value to CoStar’s commercial real estate brokerage clients and in turn their clients; that CoStar will successfully increase market share in the lease management space; that combining Virtual Premise with CoStar will enhance the value Virtual Premise provides its customers; and as to when or if the Virtual Premise products and services will be integrated with CoStar’s services. All forward-looking statements are based on information available to CoStar on the date hereof, and CoStar assumes no obligation to update such statements, whether as a result of new information, future events or otherwise.