The companies, both providers of market data in the real estate industry, are competitors and if an acquisition were to happen it would be a significant consolidation in this niche--as well as a narrowing of focus for Reis, which was formed in May 2007 in a merger between the privately held Reis and Wellsford Real Properties Inc. "We believe a combination with CoStar would eliminate very substantial duplicative costs and provide the opportunity to immediately refocus Reis' business entirely on the real estate information services segment," Florance said in his letter.

Competitors in this space include Real Capital Analytics in New York City and Property & Portfolio Research in Boston. Both companies declined to comment for this story. Each company, though--including CoStar and Reis--approach the market in a different way, says Hessam Nadji managing director of research services at Marcus & Millichap. For that reason, customers might not want to see mergers among these players, he suggests to GlobeSt.com.

"If you examine both companies strengths and weaknesses objectively and their operating methods objectively you will see it is actually better that they are different companies," he says. Marcus & Millichap subscribes to all four for that reason, Nadji continues. "They each have their own strengths. We use their data to come to our own conclusions and issue our own forecasts for our clients."

For instance, he says, one of RCA's strength is a focus on analyzing and identifying trends in property sales. One of PPR's, by contrast, is long-term forecasting using several different models.

Interestingly, Lynford was asked to differentiate between CoStar's and Reis's strength in the earnings call for Q1 2008, by a private investor. He gave a very detailed answer, according to a transcript of that call.

"Costar clearly is the leading provider of information of what we might call the space market," he said. "It primarily supports brokers and leasing agents to help them serve clients who are out in the marketplace looking to lease facilities. Reis, on the other hand, primarily serves the investor marketplace--those people who have capital at risk in either debt or equity investments.

"So that influences the type of research that we each perform. They're going to be very, very focused on what we might call suite-level availabilities. There might be space on the third floor of a building with northerly views, seven windowed offices. Our client base cares less about that type of information and more about information that influences the cash flow potential of the asset. So we're going to focus on things like concessions and absorption rates and a lot of things that drive a discounted cash flow valuation for our property."