8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT PURSUANT

TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported) November 14, 2008 (November 10, 2008)
	REIS, INC.
(Exact Name of Registrant as Specified in Charter)
	Maryland
(State or Other Jurisdiction of Incorporation)
1-12917		13-3926898
(Commission File Number)		(IRS Employer Identification No.)
530 Fifth Avenue, New York, NY		10036
(Address of Principal Executive Offices)		(Zip Code)
	(212) 921-1122
(Registrant’s Telephone Number, Including Area Code)
	N/A
(Former Name or Former Address, if Changed Since Last Report)

 Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02

Results of Operations and Financial Condition.

(d) On November 10, 2008, Reis, Inc. (the “Company”) issued a press release (the “Press Release”) and held a conference call regarding its financial results for the third quarter of 2008. Pursuant to General Instruction F to Form 8-K, copies of the Press Release and the transcript from the conference call (the “Transcript”) are attached hereto as Exhibits 99.1 and 99.2, respectively, and are incorporated into this Item 2.02 by this reference.   The Press Release and the Transcript include disclosure of non-GAAP financial measures.  In the Management’s Discussion and Analysis of Financial Condition and Results of Operations section of the September 30, 2008 Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 10, 2008, as well as in the Press Release (both of which are available on the Investor Relations portion of the Company’s website at www.reis.com), the Company includes cautionary language about the use of EBITDA and Adjusted EBITDA as non-GAAP measures and presents reconciliations of net income to EBITDA and Adjusted EBITDA for the periods discussed therein.   The information contained in this Item 2.02, including the related information set forth in the Press Release and the Transcript, is being “furnished” and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise.  The information in this Item 2.02 shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, or into any filing or other document pursuant to the Securities Exchange Act of 1934, as amended, except as otherwise expressly stated in any such filing.

Item 9.01 Financial Statements and Exhibits

 (d) Exhibits

99.1	Press Release Dated November 10, 2008.
99.2	Transcript of November 10, 2008 Conference Call.

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 SIGNATURES

 Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	REIS, INC.
	By:	/s/ Mark P. Cantaluppi
		Mark P. Cantaluppi
		Vice President, Chief Financial Officer
Date: November 14, 2008

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Exhibit Index

 99.1  Press Release Dated November 10, 2008.

 99.2  Transcript of November 10, 2008 Conference Call.

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EX-99.1

 Exhibit 99.1

FOR IMMEDIATE RELEASE:

Reis, Inc. Announces Third Quarter 2008 Results

Conference Call Scheduled for Monday, November 10, 2008 at 2:00 P.M. (EST)

NEW YORK, November 10, 2008: Reis, Inc. (NASDAQ:REIS) (“Reis” or the “Company”) announced its financial results and operational achievements for the three and nine months ended September 30, 2008.

Results and Performance

Reis presents financial information for its two operating segments: the information services segment, which we refer to as Reis Services, and the Residential Development Activities segment. The Company believes that the utilization of segment reporting will assist investors in analyzing the two separate businesses. For comparison purposes, the Company has included pro forma financial information for the nine months ended September 30, 2007, which is presented as if the May 30, 2007 merger (the “Merger”) had been consummated between Reis, Inc., then a privately held real estate information company (“Private Reis”), and a wholly owned subsidiary of Wellsford Real Properties, Inc. (“Wellsford”) as of January 1, 2006.

Consolidated Financial Results

For the three months ended September 30, 2008, the Company’s consolidated net loss was $(209,110), as compared to net income of $316,566 for the three months ended September 30, 2007. Total revenue for the three months ended September 30, 2008 and 2007 was $11,563,802 and $19,169,758, respectively. During the 2008 period, revenue was comprised of subscription revenue of $6,524,346 and revenue from sales of residential units of $5,039,456. During the 2007 period, revenue was comprised of subscription revenue of $6,342,711 and revenue from sales of residential units of $12,826,987.

For the nine months ended September 30, 2008, the Company’s consolidated net income was $1,263,326, as compared to a consolidated pro forma net loss of $(8,820,910) for the nine months ended September 30, 2007. Total revenues for the nine months ended September 30, 2008 and 2007 were $39,262,149 (actual) and $43,724,428 (pro forma), respectively. During the 2008 period, revenue was comprised of subscription revenue of $19,440,153 and revenue from sales of residential units of $19,821,996. During the 2007 pro forma period, revenue was comprised of subscription revenue of $17,269,212 and revenue from sales of residential units of $26,455,216.

Included in the nine months ended September 30, 2008 is a tax benefit of $1,165,000, recorded in June 2008, which resulted from a change in estimate of net operating losses allocable for income tax purposes to the fiscal 2007 period subsequent to the Merger.

Reis Services EBITDA

Management uses EBITDA to monitor and assess Reis Services’s performance and believes it is helpful to investors in understanding Reis Services’s business (see Reconciliation of Net (Loss) Income to EBITDA and Adjusted EBITDA below). For the three months ended September 30, 2008, EBITDA for the Reis Services segment was approximately $2,965,000, representing a 45.4% EBITDA margin and a 16.0% EBITDA growth rate over third quarter 2007 EBITDA of approximately $2,557,000. For the nine months ended September 30, 2008, EBITDA for the Reis Services segment was approximately $8,515,000, representing a 43.8% EBITDA margin and 43.5% EBITDA growth rate over the nine months 2007 pro forma EBITDA of approximately $5,933,000.

The increase in EBITDA over the comparable 2007 periods is primarily the result of (i) the revenue growth of 2.9% and 12.6% for the three and nine months ended September 30,

2008, respectively, over the 2007 comparable periods, (ii) the effect of a significant portion of the revenue growth translating directly to EBITDA growth as a result of our fixed cost structure (as demonstrated by the increase in EBITDA margin from 40.3% to 45.4% from the third quarter of 2007 to the third quarter of 2008 and an increase from 34.4% to 43.8% for the nine months ended September 30, 2007 (pro forma) to the 2008 period), (iii) as it relates to the nine month comparison, higher expenses in the pro forma nine months ended September 30, 2007 as a result of accruals for lease termination and other operational obligations of Private Reis that were not Merger related costs or costs of the merged entities, and (iv) management’s ability to control operating expenses.

Consolidated Balance Sheet Information

At September 30, 2008, Reis had consolidated assets of $131,174,597, including $25,856,621 of cash and cash equivalents, $49,053,129 of consolidated liabilities and consolidated stockholders’ equity of $82,121,468 or $7.48 per common share based upon 10,984,517 shares outstanding. Officers and directors of Reis beneficially own approximately 25% of the common shares outstanding.

Wellsford’s primary operating activities immediately prior to the Merger were the development, construction and sale of three residential projects and its approximate 23% ownership interest in Private Reis. At September 30, 2008, the Company’s equity in its remaining real estate assets was approximately $13,183,000 (or 16.1% of consolidated stockholders’ equity).

Operational Highlights

Following are recent operational highlights for Reis:

·   In October 2008, launched Transaction Analytics™, a tool that empowers commercial real estate investors and portfolio managers to identify sales and capital markets trends that are directly impacting the value of their assets;

·   Introduced coverage in August 2008 of an additional 30 metropolitan office markets, concentrated in the Northeast and Midwest, resulting in 50 markets being added to this sector in 2008;

·   Reduced the interest rate spread over LIBOR an additional 0.5% on the Reis Services Bank Loan to 1.50%, which is the lowest rate allowable under that credit agreement;

·   Reduced construction debt by $7,952,000 from the December 31, 2007 balance to $5,431,000 at September 30, 2008, which reduction includes the retirement of the Gold Peak construction debt in the third quarter;

·   Reduced our liquidity requirement to $4,651,000 at September 30, 2008;

·   Continued sales at our Gold Peak project towards our goal of a complete sell-out by the end of the first quarter of 2009 with an aggregate of 232 sales closed at September 30, 2008, including 12 and 47 sales in the three and nine months ended September 30, 2008;

·   Sold eight partially improved lots at our East Lyme project to a regional homebuilder in September 2008 and sold one and six homes in the three and nine months ended September 30, 2008, respectively; and

·   Completed model homes and infrastructure at our Claverack project.

Unsolicited Offers and Board Rejections

On August 13, 2008, Reis’s board of directors rejected, for a second time, a proposal by CoStar to acquire the Company for $8.75 per share in cash.  In the view of the board, the price offered in the CoStar proposal was inadequate as it was below the long-term value Reis could realize for its stockholders by the pursuit of its business as an independent entity and the continued disposition of its real estate assets, or by an organized sale

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of the Company.  CoStar made its initial unsolicited offer, also at $8.75 per share in cash, on June 5, 2008, which was rejected by the board on June 30, 2008. On October 30, 2008, CoStar publicly announced on its quarterly conference call that it was formally withdrawing its offer.

Basis of Accounting

The previously announced plan of liquidation of the Company was terminated as a result of the Merger and the Company returned to the going concern basis of accounting from the liquidation basis of accounting. For accounting purposes, the Merger was deemed to have occurred at the close of business on May 31, 2007 and the statements of operations include the operations of Reis Services effective June 1, 2007.

Reconciliation of Net (Loss) Income to EBITDA and Adjusted EBITDA

EBITDA is defined as earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA is defined as earnings before interest, taxes, depreciation, amortization, impairment losses on real estate assets under development and stock based compensation. Although EBITDA and Adjusted EBITDA are not measures of performance calculated in accordance with GAAP, senior management uses EBITDA and Adjusted EBITDA to measure operational and management performance. Management believes that EBITDA and Adjusted EBITDA are appropriate metrics that may be used by investors as supplemental financial measures to be considered in addition to the reported GAAP basis financial information to assist investors in evaluating and understanding the Company’s business from year to year or period to period, as applicable. Further, these measures provide the reader with the ability to understand our operational performance while isolating non-cash charges, such as depreciation and amortization expenses, as well as other non-operating items, such as interest income, interest expense and income taxes, and in the case of Adjusted EBITDA, isolates non-cash charges for impairment losses on real estate assets under development and stock based compensation. Management also believes that disclosing EBITDA and Adjusted EBITDA will provide better comparability to other companies in Reis Services’s type of business. However, investors should not consider these measures in isolation or as substitutes for net income, operating income, or any other measure for determining operating performance that is calculated in accordance with GAAP. In addition, because EBITDA and Adjusted EBITDA are not calculated in accordance with GAAP, they may not necessarily be comparable to similarly titled measures employed by other companies. Reconciliations of EBITDA and Adjusted EBITDA to the most comparable GAAP financial measure, net income, follow for each identified period:

(amounts in thousands)
Reconciliation of Net (Loss) to EBITDA and Adjusted EBITDA for the Three Months Ended September 30, 2008	Reis Services		Residential Development Activities and Other*			Consolidated
Net (loss)						$	(209	)
Income tax (benefit)							(73	)
Income (loss) before income taxes	$	1,564	$	(1,846	)		(282	)
Add back:
Depreciation and amortization expense		1,161		53			1,214
Interest expense (income), net		240		(138	)		102
EBITDA		2,965		(1,931	)		1,034
Add back:
Stock based compensation expense, net		—		402			402
Adjusted EBITDA	$	2,965	$	(1,529	)	$	1,436

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Reconciliation of Net Income to EBITDA and Adjusted EBITDA for the Nine Months Ended September 30, 2008	Reis Services		Residential Development Activities and Other*			Consolidated
Net income						$	1,263
Income tax (benefit)							(865	)
Income (loss) before income taxes	$	4,345	$	(3,947	)		398
Add back:
Depreciation and amortization expense		3,308		182			3,490
Interest expense (income), net		862		(491	)		371
EBITDA		8,515		(4,256	)		4,259
Add back:
Stock based compensation expense, net		—		887			887
Adjusted EBITDA	$	8,515	$	(3,369	)	$	5,146
Reconciliation of Net Income to EBITDA and Adjusted EBITDA for the Three Months Ended September 30, 2007	Reis Services		Residential Development Activities and Other*			Consolidated
Net income						$	316
Income tax expense							332
Income (loss) before income taxes	$	1,016	$	(368	)		648
Add back:
Depreciation and amortization expense		932		64			996
Interest expense (income), net		609		(520	)		89
EBITDA		2,557		(824	)		1,733
Add back:
Stock based compensation benefit, net		—		(132	)		(132	)
Adjusted EBITDA	$	2,557	$	(956	)	$	1,601

	Reconciliation of Pro Forma Net (Loss) to Pro Forma EBITDA and Pro Forma Adjusted EBITDA for the Nine Months Ended September 30, 2007	Reis Services		Residential Development Activities and Other*			Consolidated
	Pro forma net (loss)						$	(8,821	)
	Income tax (benefit)							(894	)
	Income (loss) before income taxes	$	846	$	(10,561	)		(9,715	)
	Add back:
	Depreciation and amortization expense		3,277		192			3,469
	Interest expense (income), net		1,810		(1,052	)		758
	Pro forma EBITDA		5,933		(11,421	)		(5,488	)
	Add back:
	Impairment loss on real estate assets under development		—		2,740			2,740
	Stock based compensation benefit, net		—		(1,237	)		(1,237	)
	Pro forma Adjusted EBITDA	$	5,933	$	(9,918	)	$	(3,985	)
*	Includes Gold Peak, East Lyme, the Company’s other developments and corporate level income and expenses.

Revenue was stable from the second quarter of 2008 to the third quarter of 2008.  Historically, Reis Services has been able to grow revenue through new business as well as contract price increases in connection with renewals.  Therefore, revenue increases are dependent to some extent upon the timing of contract renewals.  Reis Services has historically experienced higher revenue during the second half of any calendar year because a greater number of our contracts have renewed, coupled with contract price increases, in the second half of each year.

Our largest customer accounted for 2.4% of Reis Services’s revenue for the nine months ended September 30, 2008. Our 25 largest customers in the aggregate accounted for 32.3% of Reis Services’s revenue in that period.

During the third quarter of 2008, contract price increases on renewal were constrained due to usage reductions at some large customers as well as budgetary pressures at our customers in the banking, investment and real estate industries. Contract renewal pricing is based on a number of factors, including historical and projected usage.

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Although we generally impose contractual restrictions limiting our immediate exposure to revenue reductions due to mergers and consolidations and our pricing model is based on actual and projected usage, we may be impacted by future consolidation among our customers and potential customers, as a result of their reduced usage or greater bargaining power, or in the event that customers enter bankruptcy or otherwise go out of business.

Despite the current dislocations in the financial markets, overall report usage has remained constant over the first three quarters of 2008. Further, our overall renewal rate during the first nine months of 2008 was 92%, with a higher rate among our institutional customers. Reis Services continues to work to retain customers by emphasizing the value of Reis SE, highlighting its ability to assist in risk analysis and management, as well as transaction support.

Another factor contributing to a flattening in revenues in the third quarter of 2008 is the fact that a number of customers have been moved to longer term contracts of up to 36 months, which provides stability and spreads renewals more evenly across the year, but also removes an opportunity to increase revenue from that contract until the new renewal date.  In addition, as noted in our September 2007 Form 10-Q, revenues in the third quarter of 2007 were positively impacted by additional special project and consulting work. This amount was approximately $244,000 greater than the amount recorded in the third quarter of 2008. If we compared total revenue in the aggregate for these two periods without the variance related to revenue from special project and consulting work, the growth in our primary subscription business would have been $425,000, or 7.2%. Special project and consulting work for the nine months ended September 30, 2007, in excess of the comparable 2008 period was approximately $291,000. If we compared total revenue in the aggregate for the 2008 and 2007 year to date periods excluding special project and consulting work, the growth in our primary subscription business would have been to $2,462,000, or 14.9%.

Residential Development Activities

At September 30, 2008, the Company’s residential development activities and other investments were comprised primarily of the following:

• The 259 unit Gold Peak condominium development in Highlands Ranch, Colorado.  Sales commenced in January 2006 and 232 Gold Peak units were sold as of September 30, 2008, with an additional six units under contract with nominal down payments.

• The Orchards, a single family home development in East Lyme, Connecticut, upon which the Company could build 161 single family homes on 224 acres. Sales commenced in June 2006 and an aggregate of 33 homes and lots (25 homes and eight lots) were sold as of September 30, 2008. At September 30, 2008, there were no East Lyme homes under contract and four homes, including the model, were either in inventory or substantially complete.

• The Stewardship, a single-family home development in Claverack, New York, which is subdivided into 48 developable single-family home lots on 235 acres.

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The following table presents Gold Peak and East Lyme sales information for the respective periods:

		For the Three Months Ended				For the Nine Months Ended				Project Total
		September 30,				September 30,				Through
		2008		2007		2008		2007		September 30, 2008
	Gold Peak:
	Number of units sold		12		24		47		59		232
	Gross sales proceeds	$	3,479,000	$	7,412,000	$	14,522,000	$	17,988,000	$	70,490,000
	East Lyme:
	Number of homes and lots sold (A)		9		8		14		12		33
	Gross sales proceeds	$	1,560,000	$	5,415,000	$	5,300,000	$	8,267,000	$	18,687,000
(A)	In September 2008, the Company completed the sale of eight partially improved lots, in a single transaction, to a regional homebuilder for $900,000. All of the transaction proceeds were used to partially repay the project’s construction loan.

On June 30, 2008, the Company entered into a listing agreement authorizing a broker to sell the remaining lots at East Lyme (which are comprised of improved lots with road and infrastructure in place and unimproved lots without road and infrastructure in place). In addition, the Company has made the decision to halt any new home construction pending exploration of a bulk sale of lots at East Lyme. There can be no assurance that the Company will be able to sell the remaining lots at East Lyme at acceptable prices, or within a specific time period, or at all.

Investor Conference Call

The Company will host a conference call on Monday, November 10, 2008, at 2:00 PM (EST). This call is for the benefit of existing and prospective stockholders, stock analysts, and other interested parties to discuss the third quarter 2008 operating results and other matters. The Company has a policy of not providing quarterly or annual guidance.

The U.S. dial-in number for this teleconference is (800) 860-2442.  The international dial-in number is (412) 858-4600.  A replay of the conference call will be available from shortly after the conference call through 5:00 PM (EST) on November 24, 2008 by using U.S. dial-in number (877) 344-7529 and entering the following passcode: 425108# (international callers may use dial-in number (412) 317-0088 and use the same passcode).  An audio webcast of the conference call will be available on Reis’s website at www.reis.com/events and will remain on the website for a period of time following the call.

About Reis

The Company was formed through a May 2007 merger between Private Reis and Wellsford.  Reis carries on the businesses of Private Reis and Wellsford.

Private Reis was founded in 1980 as a provider of commercial real estate market information.  Reis maintains a proprietary database containing detailed information on commercial real properties in neighborhoods and metropolitan markets throughout the U.S.  The database contains information on apartment, retail, office and industrial properties and is used by real estate investors, lenders and other professionals to make informed buying, selling and financing decisions. In addition, Reis data is used by debt and equity investors to assess and quantify the risks of default and loss associated with individual mortgages, properties, portfolios and real estate backed securities. Reis currently provides its information services to many of the nation’s leading lending institutions, equity investors, brokers and appraisers.

Reis’s flagship product is Reis SE, which provides online access to information and analytical tools designed to facilitate both debt and equity transactions.  In addition to trend and forecast analysis at neighborhood and metropolitan levels, the product offers detailed building-specific information such as rents, vacancy rates and lease terms, property sale information, new construction listings and property valuation estimates.  Reis SE is

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 designed to meet the demand for timely and accurate information to support the decision-making of property owners, developers and builders, banks and non-bank lenders, and equity investors, all of whom require access to information on both the performance and pricing of assets, including detailed data on market transactions, supply and absorption. This information is critical to all aspects of valuing assets and financing their acquisition, development, and construction.

For more information regarding Reis’s products and services, visit www.reis.com.

Prior to the Merger, Wellsford was a public company operating as a real estate merchant banking firm which acquired, developed, financed and operated real properties and invested in private real estate companies. The Company’s primary operating activities immediately prior to the Merger were the development, construction and sale of its three residential projects and its approximate 23% ownership interest in Private Reis. The Company continues to develop, construct and sell these remaining residential projects in an effort to ultimately exit this business in order to focus solely on the Reis Services business.

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Cautionary Statement Regarding Forward-Looking Statements

The Company makes forward-looking statements in this press release.  These forward-looking statements may relate to the Company’s or management’s outlook or expectations for earnings, revenues, expenses, asset quality or other future financial or business performance, strategies or expectations, or the impact of legal, regulatory or supervisory matters on the Company’s business’s operations or performance. Specifically, forward-looking statements may include:

• statements relating to future services and product development of the Reis Services segment;

• statements relating to future business prospects, potential acquisitions, revenue, expenses, income, cash flows, valuation of assets and liabilities and other business metrics of the Company and its businesses, including EBITDA and Adjusted EBITDA; and

• statements preceded by, followed by or that include the words “estimate,” “plan,” “project,” “intend,” “expect,” “anticipate,” “believe,” “seek,” “target” or similar expressions.

These statements reflect management’s judgment based on currently available information and involve a number of risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. With respect to these forward-looking statements, management has made certain assumptions. Future performance cannot be assured.  Actual results may differ materially from those in the forward-looking statements. Some factors that could cause actual results to differ include:

• revenues may be lower than expected;

• the inability to retain and increase the Company’s customer base;

• adverse changes in the real estate industry and the markets in which the Company operates;

• competition;

• the inability to attract and retain sales and senior management personnel;

• changes in accounting policies or practices;

• legal and regulatory issues;

• difficulties in protecting the security, confidentiality, integrity and reliability of the Company’s data;

• the possibility of litigation arising as a result of terminating the Plan; and

• the risk factors listed under “Item 1A. Risk Factors” of the Company’s report on Form 10-K for the year ended December 31, 2007, which was filed with the SEC on March 14, 2008, as updated by “Item 1A. Risk Factors” in the Form 10-Q for the quarter ended September 30, 2008 which was filed with the SEC on November 10, 2008.

You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date of this press release.  Except as required by law, the Company undertakes no obligation to publicly update or release any revisions to these forward-looking statements to reflect any events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events.

 Press Contact: Mark P. Cantaluppi Reis, Inc. Vice President, Chief Financial Officer (212) 921-1122

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Financial Information

The following financial information should be read in conjunction with Reis’s unaudited consolidated financial statements and the notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations, both of which are included in Reis’s quarterly report on Form 10-Q for the three and nine months ended September 30, 2008, which was filed with the Securities and Exchange Commission on November 10, 2008.

CONSOLIDATED BALANCE SHEETS

(GOING CONCERN BASIS)

	September 30, 2008			December 31, 2007
ASSETS	(unaudited)
Current assets:
Cash and cash equivalents	$	25,856,621		$	23,238,490
Restricted cash and investments		3,081,378			3,663,789
Receivables, prepaid and other assets		3,842,693			8,068,675
Real estate assets under development		8,969,266			20,731,762
Total current assets		41,749,958			55,702,716
Furniture, fixtures and equipment, net		1,888,128			2,257,045
Other real estate assets		8,505,480			6,040,204
Intangible assets, net of accumulated amortization of $4,914,052 and $1,967,608, respectively		23,786,891			25,353,030
Goodwill		54,824,648			54,824,648
Other assets		419,492			670,829
Total assets	$	131,174,597		$	144,848,472
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of loans and other debt	$	185,659		$	175,610
Current portion of Bank Loan		3,000,000			1,500,000
Construction payables		274,450			2,791,896
Construction loans payable		5,431,409			13,382,780
Accrued expenses and other liabilities		7,726,119			8,629,376
Reserve for option liability		199,339			527,034
Deferred revenue		10,759,741			13,262,114
Total current liabilities		27,576,717			40,268,810
Non-current portion of Bank Loan		20,125,000			22,750,000
Other long-term liabilities		1,034,832			816,741
Deferred tax liability, net		316,580			1,313,580
Total liabilities		49,053,129			65,149,131
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.02 par value per share, 101,000,000 shares authorized, 10,984,517 shares issued and outstanding		219,690			219,690
Additional paid in capital		100,094,885			98,936,084
Retained earnings (deficit)		(18,193,107	)		(19,456,433	)
Total stockholders’ equity		82,121,468			79,699,341
Total liabilities and stockholders’ equity	$	131,174,597		$	144,848,472

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(GOING CONCERN BASIS)

(Unaudited)

	For the Three Months Ended September 30, 2008			For the Three Months Ended September 30, 2007			For the Nine  Months Ended September 30, 2008			Pro Forma For the Nine Months Ended September 30, 2007			For the Period June 1, 2007 to September 30, 2007
Revenue:
Subscription revenue	$	6,524,346		$	6,342,771		$	19,440,153		$	17,269,212		$	8,216,705
Revenue from sales of residential units		5,039,456			12,826,987			19,821,996			26,455,216			13,984,254
Total revenue		11,563,802			19,169,758			39,262,149			43,724,428			22,200,959
Cost of sales:
Cost of sales of subscription revenue		1,413,573			1,254,907			4,119,221			3,847,417			1,659,569
Cost of sales of residential units		4,553,641			11,208,359			17,005,326			23,053,126			12,158,236
Impairment loss on real estate assets under development		—			—			—			2,740,384			—
Total cost of sales		5,967,214			12,463,266			21,124,547			29,640,927			13,817,805
Gross profit		5,596,588			6,706,492			18,137,602			14,083,501			8,383,154
Operating expenses:
Sales and marketing		1,260,167			1,313,937			3,996,307			4,396,296			1,761,870
Product development		473,491			412,845			1,436,201			1,261,934			517,721
Property operating expenses		267,800			366,733			801,631			771,990			436,010
General and administrative expenses		3,775,683			3,794,509			11,157,848			16,018,198			3,905,167
Total operating expenses		5,777,141			5,888,024			17,391,987			22,448,418			6,620,768
Total other income (expenses)		(101,557	)		(169,902	)		(347,289	)		(1,349,993	)		(275,154	)
(Loss) income before income taxes		(282,110	)		648,566			398,326			(9,714,910	)		1,487,232
Income tax (benefit) expense		(73,000	)		332,000			(865,000	)		(894,000	)		336,000
Net (loss) income	$	(209,110	)	$	316,566		$	1,263,326		$	(8,820,910	)	$	1,151,232
Net (loss) income per common share:
Basic	$	(0.02	)	$	0.03		$	0.12		$	(0.81	)	$	0.10
Diluted	$	(0.02	)	$	(0.03	)	$	0.09		$	(0.81	)	$	(0.06	)
Weighted average number of common shares outstanding:
Basic		10,984,517			10,984,517			10,984,517			10,844,942			10,982,779
Diluted		10,984,517			11,258,605			11,196,660			10,844,942			11,259,648

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EX-99.2

Exhibit 99.2

Transcript of

Reis, Inc. Third Quarter 2008 Financial Results Call

November 10, 2008

2:00PM (Eastern Time)

Speakers:

Mr. Lloyd Lynford, President and Chief Executive Officer

Mr. Jeffrey H. Lynford, Chairman

Mr. Mark P. Cantaluppi, Vice President and Chief Financial Officer

OPERATOR:

Hello and welcome to the Reis, Inc. Third Quarter 2008 Financial Results Conference Call.  All participants will be in a listen-only mode.  There will be an opportunity for you to ask questions at the end of today’s presentation.  If you would like to ask a question during the Question and Answer Session, please press “*” then “1” on your touchtone phone.  You will hear a tone to confirm that you have entered the list.  If you decide you want to withdraw your question, please press “*” then “2”.   If you should need assistance during the conference, please signal an Operator by pressing “*” then “0” on your touchtone phone.  Please note this conference is being recorded.  Now I would like to turn the conference over to Mr. Lloyd Lynford.  Sir, you may begin.

LLOYD LYNFORD:

Good afternoon, this is Lloyd Lynford, President and CEO of Reis. Today, we have with us: Jeffrey Lynford, our Chairman and my brother; Mark Cantaluppi, Reis’s Chief Financial Officer; and other members of Reis’s senior management team. First, I need to provide our legal disclaimer: Today’s comments may include forward-looking statements which involve a number of risks and uncertainties and are based on currently available information and current management outlook or expectations.  Actual results may differ materially from those in the forward-looking statements.  In addition, we do not plan to update any forward-looking statements to reflect subsequent events or circumstances or if our expectations change.  For more information relating to the risks and uncertainties involved in our forward-looking statements and the Company generally, please see the “Risk Factors” and “Forward-Looking Statements” sections of our recent filings with the SEC, including our third quarter 10-Q and our 2007 10-K. This call is being broadcast live over the Internet and will be available for replay for a period of time following the call.  A link to the webcast of this call, as well as information on the replay is available at www.reis.com/events. Today, we filed our third quarter Form 10-Q and issued an earnings press release, copies of which can be found at the Investor Relations portion of our website at www.reis.com. Our presentation this afternoon will begin with my comments on Reis’s third quarter and current market conditions. I will in turn ask Jeff Lynford to briefly review the status of our three real estate projects, and Mark Cantaluppi will then describe our third quarter financial performance. We will then open the telephone lines for your questions.  We ask that, when you speak, you please state your name and the organization with which you are affiliated.

The headline of today’s call is that Reis Services’s earnings growth remains strong. We believe this is a particularly impressive accomplishment in the context of these most challenging economic conditions. Our growth in revenue, EBITDA and EBITDA margin are testimony to the compelling power of Reis’s business model and to the must-have nature of our information and analytics in strong and weak markets alike. As we have pointed out in previous calls, Reis’s products have been designed to assist investors and service providers in all phases of the commercial real estate life cycle: preliminary market research, origination, underwriting and acquisition due diligence, financial reporting, regulatory compliance and risk management, and ultimately, disposition through sale or securitization. A slowdown in one area, such as transaction activity, heightens the demand for information in other areas, such as portfolio and risk management. This is our historical and current experience and it is an important factor behind Reis’s continuing success. If constrained capital flows diminish the pace of new acquisitions and financings, a logical response by portfolio and risk managers is to quantify how these sluggish capital market conditions are affecting the value of the assets in their portfolios. Updated market information and forecasts are central to the dynamic re-valuation of commercial real estate holdings in difficult markets. The demand for market information during a market correction is not unusual—the Wall Street Journal Online has been adding subscribers during this downturn and continues to increase its subscription pricing. In addition, many providers of business-critical information, including Reed Elsevier and Thomson Reuters, have noted the resilience of business information services (and the attractiveness of recurring revenue from subscriptions for these services) even in difficult economic times.

Unlike other commercial real estate information firms whose products and value propositions are geared almost exclusively to transaction-related or marketplace activities, and whose business models depend on the number of properties listed on their websites, or on the number of users of their products, Reis’s model is predicated on report consumption.  Even in the current troubled market, there remain debt and equity investors responsible for commercial real estate assets, and these investors continue to access our reports to make asset and portfolio management decisions. Simply stated, our business model is driven in large measure by the existence of the assets themselves, and is further supported by the importance of Reis’s information throughout the real estate life cycle. Our annual subscription fees are determined predominantly by report consumption—in contrast to other models whose revenues are tied more closely to the number of subscribing brokers or property listing fees.  It is important to note in this regard that our report consumption remains stable despite the fact that the volume of commercial real estate transactions is down 66% nationally from the level of 2007.

More specifically, you’re probably wondering what the impact of some of the high profile financial institution combinations and failures means to Reis’s business. There is not yet a clear-cut answer but let me share with you as much insight as I can.

Reis’s revenue base is not heavily concentrated. Our largest customer accounted for only 2.4% of Reis Services’s nine month 2008 revenue. Our 25 largest customers in the aggregate accounted for 32.3% of revenue.  Although three of these customers have been subject to regulatory intervention, all three continue to utilize our services.

While of course we would prefer that all clients survive, prosper and utilize Reis’s market information, it appears we have multiple layers of insulation from some if not all of the repercussions of recently announced business combinations and failures—some of these layers provide near term insulation, others will benefit us over the intermediate term.

Contracts for Reis’s services typically range from one to three years; some of the institutions that have combined or filed for bankruptcy remain under contracts and continue to use our service, which remains vital to the management of their business and assets and for which they have prepaid without cancellation rights. Moreover, this is not the first time during Reis’s corporate history that we have experienced a wave of business combinations among financial institutions—and we have learned from

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those experiences. One lesson is that when two firms merge, usage does not necessarily decline even though the number of users may diminish due to layoffs. Our service and our contracts recognize this reality.  Specifically, Reis’s contracts typically have language protecting Reis in the case of a merger.  To ensure the integrity of our usage-based model, in the event of a merger between two Reis clients, any consolidation of those two clients into one account requires a fresh look at usage upon renewal.  Simply stated, our contracts, our usage model (rather than a per seat or per listing model), and the critical nature of our information to the asset re-valuation process are all favorable attributes in maintaining revenue. Over the intermediate term, stress at larger financial institutions typically leads to Reis users moving to new firms, some of which will not be Reis clients. Many of our new accounts come directly from individual users landing in new positions and seeking access to the same high quality information they utilized in their previous positions. Once again, relying upon these layers of insulation I have discussed is not preferable to maintaining healthy relationships with flourishing clients, but they do represent components of a stable business model that some other businesses would envy.

The strength of Reis’s products and business model is evident from our third quarter results. Later on this call, Mark Cantaluppi will discuss our financial results in detail. I will just provide a few highlights for the Reis Services segment. Keep in mind that the year to date 2007 period is presented on a pro forma basis.

The Reis Services segment posted record levels of revenue and EBITDA in the third quarter of 2008. For the three months ended September 30th, EBITDA for the Reis Services segment was just under $3 million, representing a 16% year-over-year growth rate and a 45% EBITDA margin. For the nine months ended September 30th, EBITDA was approximately $8.5 million, representing a 44% year-over-year growth rate and a 44% EBITDA margin. Interestingly, our EBITDA for the first nine months of 2008 is equal to our EBITDA from all of 2007.

I would like to comment on the recent announcement by CoStar withdrawing its offer to acquire Reis for $8.75 per share. As you are probably aware, at the end of June, Reis’s board—after an extensive review with the help of nationally-recognized legal and financial advisors—had previously and unanimously rejected CoStar’s initial offer as inadequate. In the middle of August, upon CoStar’s public announcement of its identical offer, our board reconvened and reiterated its rejection within hours. Certainly, the board considered the premium that CoStar’s offer represented to our then-current stock price, but it also concluded that neither our stock price nor CoStar’s premium was determinative of the intrinsic value of the Reis franchise as measured by its current and prospective earnings.

At the time of CoStar’s initial offer, Reis had been a public company for one year; one of the guiding premises of combining Reis and Wellsford was to bring Reis into the public market while simultaneously exiting Wellsford’s real estate development business. From the May 2007 merger through today, the Company has repaid $29.2 million of revolving development debt, leaving a balance of just $5.1 million. We have also sold 96 units at Gold Peak in Colorado, leaving only 19 remaining units to sell of the original 259. We expect to wrap that project up in the next six months. We haveceased all development activities at our Claverack and East Lyme projects and are currently attempting to sell both properties in bulk; in accordance with this plan, in September, we sold eight lots in East Lyme to a regional builder.

We believe that the successful completion of our programmatic approach to exiting the real estate business will result in a greater understanding by investors of Reis’s core market information and analytics business—its recurring revenue, high EBITDA margins and rapid EBITDA growth—and that Reis shareholders will receive the multiples typically accorded these types of businesses in a more normalized market environment. Our current stock price does not discourage us from realizing these strategic objectives and producing exceptional value for our shareholders. Remember: Reis’s senior officers and directors own approximately 25% of the company and our objectives are fully aligned with those of all shareholders. Selling a business information company with our proprietary database and

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growth profile, whose current annualized EBITDA run rate exceeds $11 million, at a multiple of trailing EBITDA that is less than 10, does not make sense given a reasonable economic environment. We understand CoStar’s effort to exploit our low stock price to acquire an industry leader at a bargain price; we understand that they believe, as has been stated, that they can reduce our costs by roughly fifty percent and realize an astonishingly accretive transaction for their shareholders. There is only one problem with that scenario: we work for you—Reis’s shareholders—not CoStar’s shareholders. There has been a second impediment to a productive dialogue with CoStar. They refuse to sign a non-disclosure agreement, the identical agreement that we have entered into from time to time in the ordinary course of negotiating with third parties. In the case of CoStar, who is a competitor, and whose CEO has a proclivity for negotiating in public, a non-disclosure agreement is an indispensable first step to dialogue. CoStar’s CEO has also indicated that I would not return his calls. For the record, we have responded in an appropriate manner to all communications from CoStar—the first time we received any response from CoStar regarding our industry-standard NDA was when their CEO said that he wouldn’t sign it, on his quarterly conference call on October 30th, nearly two months after we forwarded the NDA to him. Of course, as we have said publicly, we will review, together with our legal and financial advisory team, all reasonable offers from responsible third parties. I also want to address the state of trading in our stock. We have identified certain trades and trading patterns, particularly during the March 2008 to May 2008 time period, that are troubling, and we have asked the Nasdaq and FINRA (The Financial Industry Regulatory Authority) to review these trades. They determined that opening an investigation was an appropriate next step. There are a number of days when our stock does not trade (or trades lightly), and then at the end of the day (in what is called the closing cross), a 100 or 200 share trade is executed at a price substantially below the most recent sale price. This has been causing consistent downward pressure on our stock. We are concerned that one or more parties may be using abusive trading practices to drive down our stock price. FINRA has expanded its review to include the period from February 2008 to August 2008, and is reviewing the trading patterns for completed transactions as well as unfilled orders, including trades leading up to the public unsolicited offer by CoStar on August 12, 2008. We have identified additional trades over the past few months, which will be included in this review. At this time, we do not have any other information that we can provide you on this topic. I would now like to turn the call over to Jeff Lynford to discuss our three real estate projects.

JEFFREY LYNFORD:

Thank you, Lloyd. We have made progress towards an ultimate disposition of our three legacy real estate projects.  As I have done in prior calls, I would like to provide you with some key metrics and operational achievements. Real estate assets decreased from $26.8 million at December 31, 2007 to $17.5 million at September 30, 2008, a net reduction of 35%, as a result of sales at both our Gold Peak and East Lyme projects. Construction loans outstanding decreased from $13.4 million at December 31, 2007 to $5.4 million at September 30, 2008, a net reduction of 59%, also as a result of the aforementioned sales. As of today, the balance has been further reduced to $5.1 million, and this encumbers only East Lyme, since we retired all the remaining Gold Peak debt in August. Our minimum liquidity covenant requirement has decreased to $4.7 million at September 30, 2008 from $10 million at December 31, 2007.

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At Gold Peak, we have sold 232 units through September 30th, with an additional three sales in October. Currently, five units are under contract, leaving 19 units available to buyers. As I noted, these remaining Gold Peak units are free and clear of any debt. Thus, the incremental cash flow generated from the sale of these units will remain within the Company. In September, we sold eight partially improved lots at East Lyme to a regional homebuilder for $900,000. At the Stewardship, our project in Claverack, New York, the infrastructure, amenities and two model homes are complete. At this time, the construction of new homes has been concluded or suspended at all of our projects. At Gold Peak, management’s efforts are directed entirely towards completing the sell out of the remaining 19 units. We are responding to the weakening market through appropriate pricing, concessions and upgrades in order to complete the sell out. At East Lyme and Claverack, we are working with brokers to sell these projects in whole or in part as expeditiously as possible. We have expanded our disposition efforts to encompass smaller bulk sales.  An example of this effort is the previously mentioned sale of eight lots in East Lyme to a regional homebuilder.  Given current constraints on national homebuilders, we have implemented a strategy to identify and sell smaller bundles of lots at our projects directly to these local or regional builders. This provides us with an additional methodology to dispose of these projects in successive multiple sales.  However, as a result of the lack of liquidity generally, and specifically the reluctance of banking institutions to lend new construction funds, this task continues to be challenging. At this time, I would like to turn the call over to Mark Cantaluppi to talk about our financial results.

MARK CANTALUPPI:

Thank you, Jeffrey. The financial information I will present today includes the actual results for the third quarter and nine month period ended September 30, 2008 as compared to the results of the third quarter and nine month period ended September 30, 2007 and as compared to the results for the trailing quarter ended June 30, 2008.  Please note that the information for the nine months ended September 30, 2007 is presented on a pro forma basis. We continue to present financial information in two operating segments: the information business, which we refer to as Reis Services, and the Residential Development Activities segment. Management believes that the utilization of segment reporting will assist stockholders in analyzing the two separate businesses. Accordingly, I will describe our operations in that manner. Consolidated revenue for the third quarter of 2008 aggregated $11.5 million, which is comprised of subscription revenue of $6.5 million and sales revenue from residential development activities of $5 million. Consolidated revenue for the nine months ended September 30, 2008 aggregated $39.2 million, which is comprised of subscription revenue of $19.4 million and sales revenue from residential development activities of $19.8 million. The Company had a consolidated net loss of $209,000 for the third quarter of 2008 or ($.02) per share on a basic and fully diluted basis. Consolidated net income for the nine months ended September 30, 2008 was $1,263,000 or $0.12 and $0.09 per share on a basic and fully diluted basis, respectively. Net income for the nine month period was positively impacted by a $1.2 million tax benefit realized in the second quarter.

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The Company also reports EBITDA, which we believe is a useful measure to understand the financial performance of Reis Services. Since EBITDA is a non-GAAP financial measure, I must caution you about its limitations. In the MD&A section of our third quarter 2008 10-Q, on page 35, and in our earnings release issued earlier today (both of which are available in the Investor Relations portion of our website, at www.reis.com), we include cautionary language about the use of EBITDA and Adjusted EBITDA as non-GAAP measures and present reconciliations of net income to Adjusted EBITDA and EBITDA for the three and nine months ended September 30, 2008 and for the comparable 2007 periods, including the nine months ended September 30, 2007, which is on a pro forma basis.

While Lloyd has already provided a highlight of certain financial information for Reis Services, I would like to provide this segment’s performance and comparative results in greater detail.

EBITDA for Reis Services was $2,965,000 for the third quarter of 2008, representing a 45% margin. EBITDA was $8.5 million for the nine months ended September 30, 2008, representing a 44% margin.

For comparison purposes, Reis Services had the following growth: In the third quarter of 2008, EBITDA grew 16% from $2,557,000 in the 2007 quarter to $2,965,000 in the 2008 quarter. The EBITDA margin improved from 40.3% to 45.4%.  In the third quarter of 2008, revenue grew approximately 2.9% over the third quarter of 2007 from $6.3 million to $6.5 million. The 2007 third quarter revenue was positively impacted by special project and consulting work in excess of the amounts recorded in the 2008 quarter by $244,000.  Without the variance related to revenue from special project and consulting work, the growth in our primary subscription business would have been $425,000, or 7.2%.

For the nine months ended September 30, 2008, EBITDA grew 43.5% from $5.9 million to $8.5 million. The EBITDA margin improved from 34.4% to 43.8%.  For the nine months ended September 30, 2008, revenue grew approximately 12.6% over the 2007 pro forma period from $17.3 million to $19.4 million. The 2007 nine months revenue was also positively impacted by special project and consulting work in excess of the amounts recorded in the 2008 nine month period by $291,000.  Without the variance related to revenue from special project and consulting work, the growth in our primary subscription business would have been $2,462,000, or 14.9%.

Comparing the results of the third quarter of 2008 and the second quarter of 2008, revenue increased 0.3% from $6,505,000 to $6,524,000. EBITDA grew 3.7% from $2.8 million in the 2008 second quarter to $2,965,000 in the 2008 third quarter. The EBITDA margin improved from 43.9% to 45.4%.

The increase in EBITDA over the 2007 periods is primarily the result of:

 · One, the revenue growth of 2.9% and 12.6% for the three and nine months ended September 30, 2008, respectively, over the comparable 2007 periods;  

 · Two, the effect of a significant portion of the revenue growth translating directly to EBITDA growth as a result of our largely fixed cost structure (as demonstrated by the continued increase in EBITDA margins);  

 · Three, as it relates to the nine month comparison, higher expenses in the pro forma nine months ended September 30, 2007 as a result of accruals for lease termination and other obligations of Private Reis that were not Merger-related costs or costs of the merged entities; and  

 ·  Four, our ability to control operating expenses.

I am now going to move into a discussion of parent level general & administrative costs, or G&A. We are continually challenging and looking at ways to reduce these costs. Most of the G&A costs associated with the orderly disposition of our real estate projects are personnel-related and are

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subject to fixed contracts. The reduction of these costs is dependent upon the timing of the ultimate sale of the remaining real estate assets. We have reduced many costs over the year, including the costs associated with our 535 Madison Avenue lease obligation, which ended September 1, 2008. We have been diligently working to reduce other costs and have been able to achieve meaningful savings in 2008 upon renewal of our D&O and other corporate liability insurance coverages, which will run into 2009. The G&A expense savings from these items alone are approximately $1.2 million on an annualized basis. We will continue to strive for additional G&A savings in the fourth quarter of 2008 and during 2009. I would like to highlight that the three and nine month G&A expense for 2008 is burdened by $215,000 and $453,000, respectively, of legal and investment banking fees incurred with regards to assessing and responding to the unsolicited offers and assessing strategic alternatives. Following are some balance sheet statistics: Stockholders’ equity was $82.1 million at September 30th. The Company has approximately 10,985,000 common shares outstanding which equates to a book value per share of $7.48. Directors and senior management of the Company beneficially own approximately 25% of the outstanding stock. At September 30, 2008, we reported total assets aggregating $131 million. Cash and cash equivalents aggregated $25.9 million, or $2.35 per share. The Company reported deferred revenue of $10.8 million. Deferred revenue represents revenues from annual or longer term contracts for which we have billed and/or received payments from our customers related to services we will provide in the future. As time passes, these deferred revenues are recognized as income, primarily on a straight-line basis over contractual periods. Our annual contract model provides a significant level of revenue visibility and predictability relative to future periods. For example, approximately $5.8 million of the deferred revenue balance will turn into revenue in the fourth quarter of 2008. For comparison purposes, of the June 30, 2008 deferred revenue balance of $10.9 million, approximately $5.9 million of that balance turned into revenue in the third quarter, representing approximately 90% of the total third quarter revenue of $6.5 million.  We believe this visibility and predictability is an important aspect to emphasize to you. We have a strong balance sheet. Total debt aggregated $29.0 million, of which $5.4 million relates directly to the residential development debt and $23.1 million is the remaining outstanding balance of the Reis Services acquisition debt. During 2009, we will repay the remaining $5.1 million of residential development debt (which comes due in June 2009) and we will make scheduled quarterly principal payments aggregating approximately $3.5 million on the Reis Services debt, notably, all of which can be paid from our existing cash balance.  The Reis Services debt matures in September 2012.  As a result of the strong financial results of Reis Services, the LIBOR spread on this debt has been reduced from 300 basis points in 2007 to 150 basis points in the third quarter of 2008.  For the month of September 2008, we paid interest at an “all-in” rate on this debt of approximately 4%. With that, I would like to open up the call for questions.

OPERATOR:

Thank you. At this time, if you would like to ask a question, please press * then 1 on your touchtone phone. You will hear a tone to confirm that you have entered the list. If you decide you want to withdraw your question, please press * then 2. That is * then 1 to ask a question. Our first question comes from Ross Haberman from Haberman Funds. Please go ahead.

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ROSS HABERMAN:	How are you gentlemen?
LLOYD LYNFORD:	Good
ROSS HABERMAN:	Nice quarter.
LLOYD LYNFORD:	Thank you.
ROSS HABERMAN:	Could you discuss what you’re seeing in terms of pricing pressure on the product and expected client renewal or losses given the current state of affairs.
LLOYD LYNFORD:	Yes, I think that we can largely bifurcate our customers into two segments: what we call institutional clients and non-institutional clients. Our institutional renewal rate continues to be very strong. I think we’ve disclosed in the Q, overall our blended average renewal rate of all clients is 92%. So we are very pleased that it remains considerably above that 90% threshold. I would say one area of weakness is in the smaller, non-institutional accounts, those people paying us less than $15,000 and in many cases well below $15,000 annually. And even a subset of that, and that would really be the clients, the small institutional clients, who have come on board really pretty much in the last year. We made a concerted effort with our outbound telesales effort to access what we call that base of the pyramid, and we find that when they get into their second and third year with us, their renewal rate becomes very similar to our institutional renewal rate. But if I were to pinpoint one area of weakness, it would be in the first year renewals of our non-institutional clients. As far as overall pricing, we continue to get, on average, pricing increases. But I must say that in this marketplace, everyone has a budget story to tell. So while usage remains strong, we feel it’s the better part of valor in many cases to be perhaps a little less aggressive on fees than we’ve been in the past because we’re trying to show that we can work with our clients through this period of turmoil and not hit them with usage-based fees every year. So I do think there is some pricing pressure, some headwinds on that, largely due to budgetary considerations that we’re seeing. I would say that’s across the board.
ROSS HABERMAN:	The likely decrease or the reduction in the number of hedge funds which we are seeing and we’re going to see - that falls into your institutional group as you described or that smaller group, and do you expect to see much effect from that?
LLOYD LYNFORD:	Well, first of all I would say that hedge funds heretofore have never really been a major component of our user base, if we’re talking about classic hedge funds. Certainly, institutional real estate money managers, investment banks, commercial banks, pension funds, but classic hedge funds have not. Now, interestingly, in the last, let's say this year, we have signed up a number of new hedge fund clients that have been amassing capital, kind of ready to move into commercial real estate when they perceive that there finally is a significant break in pricing, which there really hasn’t been thus far. While transaction activity is down, as I mentioned, about 66%, pricing in terms of the asset class – depending on the type that we’re talking about – ranges anywhere from sub-10% to maybe 15 to 18%. Again, so a lot of these hedge funds are amassing capital, ready to move in when they see a decline. But most of the hedge funds that we do have would probably be in the smaller category, not in the larger category. Although, we have had a few nice hits, positive hits from hedge funds in recent quarters.
ROSS HABERMAN:	Thanks guys.
LLOYD LYNFORD:	Sure.

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OPERATOR:	Our next question comes from Brad Kroese, a private investor. Please go ahead.
BRAD KROESE:	Looking at the cash balance that you guys have and the depressed state of the stock price, and unlike a lot of companies that probably unwisely used a lot of their cash at the peak of the market to buy back their stock, is there any point where putting some of that cash to work and given the containment you have in terms of amortization and coming up with the debt facilities? Is a buyback anything that might come up?
LLOYD LYNFORD:	I had a little trouble hearing the question so I think that…
BRAD KROESE:	Stock buyback, I’m sorry.
LLOYD LYNFORD:	Yeah, stock buyback. It’s something that we’re looking at. I think the tensions between wanting to have cash on hand and yet the very favorable opportunity represented by our current stock price is exactly the dynamic that the Board is considering. You know, when we’re trading at the values that we’re trading at, clearly one of the best investments we think we can make is probably in our own stock. At the same time, we all recognize that cash is king in this. Frankly, we think we’re in an enviable position in this regard, which is that, as you can tell by our quarterly results that our cash generation position is pretty good. You know, we’re generating an annualized run-rate of over $11 million in EBITDA. We have a cash balance of somewhere between $29 and $30 million. We have very, very manageable amortization payments next year on both the Reis Services front and on the development activities front. So with the cash on hand that we have and the cash that we’re generating, we think we might be able to accomplish both objectives, which is to retain a fair amount of cash for flexibility going forward as well as selectively repurchasing shares and it’s something that... the Board is reviewing this very, very carefully. So you should know that this is one potential avenue for enhancing shareholder value.
BRAD KROESE:	Would there be any issues with the bank loan in terms of putting that cash to work, or is that not an issue?
LLOYD LYNFORD:	Not really an issue as far as we can tell.
BRAD KROESE:	Okay, thank you.
OPERATOR:	As a reminder, if you would like to ask a question please press * then 1 on your touchtone phone. You will hear a tone to confirm that you have entered the list. If you decide you want to withdraw your question, please press * then 2. That is * then 1 to ask a question. Our next question will come from Patrick Walker from Walker Smith Capital. Please go ahead.
PATRICK WALKER:	Hey guys, thanks for the time.
LLOYD LYNFORD:	Hey Patrick, how are you?
PATRICK WALKER:	I’m all right. How are you?
LLOYD LYNFORD:	Good, thanks.
PATRICK WALKER:	The real estate holdings, obviously, in Connecticut, can you go through again how that’s currently valued on your balance sheet and that’s most of what’s left on the debt that I see, correct?
MARK CANTALUPPI:	The debt that’s outstanding is related solely to the East Lyme project, that’s correct.
PATRICK WALKER:	Okay, and how many lots are left?

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JEFFREY LYNFORD:	119 lots in total – one model and three houses in inventory, and five finished lots.
PATRICK WALKER:	And what do you consider to be your options? Obviously, you just continue to develop and work through this cycle.
JEFFREY LYNFORD:	We have stopped construction, we have stopped road building, we have retained brokers, and we are trying to sell it in total or in pieces, and we were happy to announce earlier as we said on this call that we have been able to find one regional homebuilder that bought eight lots to build spot homes, and we’re looking at others. So if we can’t sell it in one fell swoop, as they say, we’ll sell it in many fell swoops.
PATRICK WALKER:	All right, that’s all I’ve got. I think everything else has been addressed. Thank you.
OPERATOR:	Our next question will come from Ross Haberman from Haberman Funds. Please go ahead.
ROSS HABERMAN:	I just had a follow up question for Mark. Mark, could you go through the methodology of how you come up with that $13 million of equity value for the real estate business.
MARK CANTALUPPI:	That information comes right off of the segment balance sheet in the 10-Q. Hold on one second and I’ll flip to that.
ROSS HABERMAN:	Do you reappraise that or, for argument’s sake, if you end up selling that in bulk you’re clearly not going to get the prices you would get if you sold it in small individual pieces? Do you have to assess that at all?
MARK CANTALUPPI:	Each quarter, we take a look at our sale assumptions like any other real estate owner/operator/holder would do to test and look at indications of impairment with regards to either your land or your real estate. I think that the process that we do on a quarterly basis is comprehensive. We challenge our input assumptions with regards to selling prices, our ability and intent with regards to getting transactions or sales like Jeffrey has previously described closed. Just as a reminder, the projects that we had taken impairments on in the past were only the East Lyme and Claverack projects. Our Gold Peak project, which Jeffrey had mentioned before, we only have 19 units to go. Very strong, it does not come close on any calculation to an impairment and like Jeff said, we own that free-and-clear. So every dollar that we bring in there, other than paying commissions and operating expenses, is retained by the Company.
ROSS HABERMAN:	I’m just looking at that you sold nine lots in East Lyme in the last quarter or so. Based on the average price you got for that, there was no reason to further adjust your East Lyme valuation based on those sales?
MARK CANTALUPPI:	That’s correct.
ROSS HABERMAN:	Okay. All right, thank you.
OPERATOR:	Our next question will come from Adam Berger from Cougar Trading. Please go ahead.
ADAM BERGER:	Hey fellows, how are you?
LLOYD LYNFORD:	Good, thank you.
ADAM BERGER:	Have you guys thought of hiring someone to explore other options being that CoStar is gone?

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LLOYD LYNFORD:	Well, as I indicated, part of the deliberation process was aided by hiring a financial advisor as well as legal representation. As part of the process that the Board deliberated on over the summer, when the CoStar offer first came about in June, we certainly did look at the position of the Company and our other options. The decision of the Board was and has been that continuing to exploit the core business while exiting the real estate was the best option for the Company.
ADAM BERGER:	Got it, okay, thank you.
OPERATOR:	At this time, we show no further questions. I would like to turn the conference back over to Lloyd Lynford for any closing remarks.
LLOYD LYNFORD:	As always, Mark and I are available to speak to shareholders of Reis and we would be happy to answer any questions you have or come up with in the next coming weeks.  Of course, we must comply with SEC and other rules regarding selective disclosure.  We continue to work hard every day to deliver operating and financial results for our shareholders, and we believe that we have done that yet again this quarter, especially given the difficult market conditions. Thank you for listening today and have a good afternoon.

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