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PropertyFirst.com Merging With LoopNet

March 22, 2001|JESUS SANCHEZ | TIMES STAFF WRITER

Former Internet rivals PropertyFirst.com Inc. and LoopNet Inc. on Wednesday announced a merger that creates one of the largest online sources of commercial real estate listings and information.

The new company will operate under the name of San Francisco-based LoopNet but will adopt the technology developed by PropertyFirst of Alhambra. The merger, which has been approved by each company's board of directors, will result in a single Web site with more than 145,000 sale and lease listings, according to the companies. About 1,200 real estate firms pay to use LoopNet and PropertyFirst's technology on their Web sites.

"It seemed like a logical fit," said LoopNet Chief Executive Dennis DeAndre, who will serve as co-chairman of the company with John Stanfill, co-founder and president of PropertyFirst.

Despite several years of expansion and sizable investment, neither company is profitable. LoopNet, PropertyFirst and other companies in the field have struggled to find formats and products that attract paying customers. In most cases, the Web-based real estate listings are free for viewers. The companies generate most of their revenue by selling other services and advertising.

Real estate executives said the merger is part of an ongoing industry shakeout as the fledgling firms try to survive.

"There were clearly too many players in the real estate space," said Matthew Miller, a broker with Cresa Partners. "Whether this merger is enough to guarantee survival and success remains to be seen."

The LoopNet-PropertyFirst merger is expected to result in a profit by the middle of next year, company officials said. The combined firm does not expect to ask its investors for more money, Stanfill said.

The merger of the privately owned companies will result in layoffs as the firms combine operations. Officials declined to say how many jobs would be cut but said that about 100 people would be employed in Northern and Southern California.

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