Let's face it. Hosting an online marketplace for commercial real estate isn't the most attractive of businesses these days. Who wants to deal with gun-shy lenders or play the dangerous game of catching falling steak knives given the freefalling prices in some markets? Commercial properties may be holding up better than their residential cousins, but this probably isn't the best time to be LoopNet (NASDAQ:LOOP).

However, this may very well turn out to be the best time to be a LoopNet investor.

Diving into last night's second quarter report probably requires a hardhat. All works in progress do. Investors need to realize that this is a construction project, not a demolition.

Here are the reasons why I'm feeling as confident in LoopNet as I have been since it was originally recommended as a Rule Breakers stock pick.

1. It's still growing where it counts
Revenue soared 29% higher to $22 million. Earnings did fall by 12%, but that is not indicative of a site that continues to grow in popularity. The challenging margins can be tackled easier than winning over an audience. LoopNet clearly has that. There are now nearly 3 million members on the site. There are 623,000 listings, 20% more than at this time a year ago. comScore Media Metrix claims that there was an 8% decline in unique visitors to the site, but LoopNet delivered 43.2 million profile views during the quarter, an 11% uptick. In other words, there may have been fewer people on the site, but they stuck around longer.

2. You have to love that balance sheet
LoopNet has been eating its stock, swallowing down nearly 10% of the outstanding shares since initiating a share buyback in February. Even after the binge, LoopNet's balance sheet is flush with $69.5 million in cash.

3. Turning lemons into lemonade
What does a cash rich company do when its sector is out of favor? It buys up smaller players at bargain prices. LoopNet has been doing that lately. Its latest purchase is rural land listings site FarmAndLand.com.

4. It's in the right place at the wrong time
Good luck knocking online lead generation as a business model. It works. You see it in the category killers like Bankrate (NASDAQ:RATE) in financial services, The Knot (NASDAQ:KNOT) in wedding services, and InsWeb (NASDAQ:INSW) in insurance. Companies like LoopNet that are growing during a market lull will be that much more appealing when things turn around, and they are in the right place at the right time.

5. You can't beat the price
LoopNet has shed more than half of its value since peaking last summer. The numbers prove that LoopNet is a more important company today than it was back then. It is sticking to its guidance, calling for adjusted earnings to come in between $0.58 a share and $0.60 a share this year. Is LoopNet really worth less than 20 times this year's earnings? We know that earnings are depressed, but have you seen the top line growth? Even with its bottom line hiccups, this is a bargain given its multiple in the teens.

LoopNet is a category killer in its niche. It isn't a marketplace like eBay (NASDAQ:EBAY) that is suffering from cheaper alternatives. This isn't a poorly conceived realtor lead generator like HouseValues (NASDAQ:SOLD) that ultimately scares away both potential home buyers and commissioned brokers. It may not be growing as quickly as CoStar (NASDAQ:CSGP) -- another commercial real estate information provider -- but it's certainly trading at a cheaper valuation.

No one can tell you for sure when real estate will bounce back, but as long as you have a profitable company like LoopNet that continues to grow in this difficult environment, it's hard to bet against it.

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