Bruce Weissberg, RealtyIQ's CEO, depicts this morning's events as "interesting." Where Zethus went wrong, says a Goldman Sachs source, is that it didn't latch onto other investors in subsequent funding rounds. Zethus reportedly had fallen short in Goldman Sachs' eyes to lure other investors to the fold.
In midyear 2000, Cushman and Wakefield struck an alliance with Zethus, but reportedly did not kick in any support money. The high-tech Zethus, an insider claims, had not gotten beyond the design stage for a transaction platform. Zethus had hoped to parlay itself into a revolutionary spot for a NASDAQ-type presence in the real estate industry.
As for RealtyIQ, Weissberg says the operation has reduced its burn rate to the point that it's close continuing on its own. And, he says, the overhead cutback to fewer employees and one office--New York City--has positioned the firm to be "a better candidate" for a takeover or an investor.
But in a published report, RealtyIQ's backer, FrontLine Capital, has said another buyer will be sought. That, says GlobeSt.com's source, could come from the ranks of Torto-Wheaton, a subsidiary of CB Richard Ellis, or possibly the Reis Reports.
The CoStar Group Inc. is RealtyIQ's foremost competitor, and it also holds a C&W contract but strictly for brokers' subscription purposes. That pact has a little over a year to go before it expires.
Sources aren't discounting yet that C&W might consider bringing Realty IQ into the fold along with Zethus. A RealtyIQ takeover certainly would satisfy an outstanding debt that GlobeSt.com has learned is close to $18 million. RealtyIQ racked up the tab for last year's purchase of the Cushman and Wakefield property database. Sources say roughly $3 million is all that has changed hands to date.
One thing is certain: Cushman and Wakefield doesn't plan on suing to recoup the money. "We don't need to put salt on that wound," says Thomas P. Falus, president of Cushman and Wakefield's two-month-old Strategic Ventures Group. "We have our data back. We're looking at it once again. Our data, as a practical matter, is ours and we own it."
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