Mention "commercial real estate" to a crowd of investors, and you may very well clear the room. The same niche that was holding up well when the residential market initially cratered is now in the same sinkhole, and LoopNet
LoopNet is the country's leading online marketplace for commercial real estate, and it's hurting. Revenue in its latest quarter fell 13% to $18.3 million. The website posted a profit of $0.07 a share, after earning $0.12 a share a year ago.
"Our company and business performed solidly ahead of our expectations in Q4 2009, despite ongoing gridlock in the commercial real estate industry," CEO Richard Boyle explained in yesterday's earnings release -- but I'm not as forgiving.
Sure, analysts were talked down into expecting a profit of only $0.06 a share on $18 million, but that's not worthy of high-fivery. LoopNet still needs to begin inching in the right direction if it wants to be treated as a growth stock.
Some metrics are turning around. There were 732,503 commercial listings on the site -- a 12% year-over-year advance. Even more encouragingly, user profile views soared 26% to 46.6 million during the quarter. Do the math, and you'll realize that the average listing was drawing increased exposure.
However, LoopNet can't deny that premium subscribers -- the folks paying an average of $66 a month for enhanced access and listing features -- declined by 12% during the quarter.
Online marketplaces can be lucrative. Whether you're talking about Amazon.com
Residential real estate has a laundry list of players, led by Realtor.com parent Move
Is LoopNet lowballing again? Probably so, but I refuse to lift the moratorium on high-fivery until I see year-over-year improvement.