How do CRE data companies (CoStar, Yardi, Axio, etc) collect their data?

As a debt professional, I'm sure I share common grievances among others here with having to rely on real estate data that often is not entirely accurate. My experience with "CRE Data Providers" is typically through CoStar, Axio, REIS, and the other common ones. My experience is also obtaining rental, vacancy, absorption, and related data.

I don't know how much my company pays for CoStar, but I assume it's a ton of money. And I cannot believe how complacent this industry is with data that - at best - is like a "solid ballpark estimate" of actual data points. Often, I've found that we underwrite a deal using CoStar/others and the rent/vacancy/etc information is 5-15% within actuals. That's crazy!

I'm really curious about thinking about a business model that has the objective of getting this information more accurately and cheaper than the competition (in addition to other services).

Since I haven't worked on the principal side or at one of the data providers, does anyone have ANY information how these companies get their data?

• Do they employ staff that literally calls and inquires about properties?
• Does Apartments.com (CoStar) actually have real signed leases that they report?
• Do property management companies like Yardi sell their data back to the CoStars of the world?

Any and all information would be super interesting to hear.