Using Drones to Collect Data:

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.

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."

"We can actually operate and cover the United States, 168 markets, for less than $1 million a year using this technology," said Florance. "We typically collect twice as much under-construction activity as any of our competitors, and that can be as much as hundreds of thousands of apartment units that we know about that no one else knows about."

"New construction activity will move rents down, so if I own a large building, and two new buildings are being built right next to my building, I need to lower my rents before they deliver, so that I can lease up my building before I have to compete against these new buildings," Florance said. "Often the decision-makers that are setting rents are thousands of miles away. Being able to capture really high quality information like this and provide it to our clients allows them to more effectively set their rents and be able to position against competitors remotely."