The following discussion should be read in conjunction with the consolidated financial statements and notes thereto appearing elsewhere in this quarterly report on Form 10-Q.

Reis, Inc., which we refer to as either the Company or Reis (formerly Wellsford Real Properties, Inc., which we refer to as Wellsford), is a Maryland corporation. The name change from Wellsford to Reis occurred in June 2007 after the completion of the May 2007 merger (which event we refer to as the Merger) of the privately held company, Reis, Inc. (which we refer to as Private Reis) with and into Reis Services, LLC (which we refer to as Reis Services), a wholly-owned subsidiary of Wellsford.

The Company's primary business is providing commercial real estate market information and analytical tools for its customers. For disclosure and financial reporting purposes, this business is referred to as the Reis Services segment.

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 properties in metropolitan markets and neighborhoods throughout the U.S. The database contains information on apartment, office, retail 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, quantify and manage 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 web-browser based online access to information and analytical tools designed to facilitate both debt and equity transactions and ongoing evaluations. In addition to trend and forecast analysis at metropolitan and neighborhood levels, the product offers detailed building-specific information such as rents, vacancy rates, lease terms, property sales, new construction listings and property valuation estimates. Reis SE is 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, absorption, rents and sale prices. This information is critical to all aspects of valuing assets and financing their acquisition, development and construction.

Reis's revenue model is based primarily on annual subscriptions that are paid in accordance with contractual billing terms. Reis recognizes revenue from its contracts on a ratable basis; for example, one-twelfth of the value of a one-year contract is recognized monthly.

As commercial real estate markets have grown in size and complexity, Reis, over the last 29 years, has invested in the areas critical to supporting the information needs of real estate professionals in both the asset market and the space leasing market. In particular, Reis has:

? developed expertise in data collection across multiple markets and property types;

invested in the analytical expertise to develop decision support ? systems around property valuations, credit analytics, transaction support and risk management;

? created product development expertise to collect market feedback and translate it into new products and reports; and

? invested in a robust technology infrastructure to disseminate these tools to the wide variety of market participants.

These investments have established Reis as a leading provider of commercial real estate information and analytical tools to the investment community. Reis continues to develop and introduce new products, expand and add new markets and data, and find new

ways to deliver existing information to meet and anticipate client demand, as more fully described below under "Products and Services." The depth and breadth of Reis's data and expertise are critical in allowing Reis to grow its business.

Reis has expertise in collecting, screening and organizing volumes of data into its proprietary databases. Each quarter, a rotating sample of building owners, leasing agents, and managers are surveyed to obtain key building performance statistics including, among others, occupancy rates, rents, rent discounts, free rent allowances, tenant improvement allowances, lease terms and operating expenses. All survey responses are subjected to an established quality assurance and validation process. At the property level, surveyors compare the data reported by building contacts with the previous record for the property and question any unusual changes in rents and vacancies. Whenever necessary, follow-up calls are placed to building contacts for verification or clarification of the results. All aggregate market data at the neighborhood (submarket) and city (market) levels are also subjected to comprehensive quality controls. Reis publishes information on approximately 1,800 submarkets at March 31, 2009. The following table lists the number of metropolitan markets covered by Reis for each of four types of commercial real estate at March 31, 2009:

Number of metropolitan markets:

  Apartment                                  169
  Office                                     132
  Retail                                      76
  Industrial                                  44

In addition to the core property database, Reis maintains a new construction database that monitors projects that are being added to the covered markets. The database reports relevant criteria such as project size, property type and location for planned and proposed projects, projects under construction, and projects nearing completion.

Finally, Reis also maintains a sales comparables database that captures information such as buyer, seller, purchase price, capitalization rate and financing details, where available, for transactions over $2,000,000 in 82 of our largest covered markets.

Reis SE, available through the www.reis.com web site, serves as a delivery platform for the thousands of reports containing Reis's primary research data and forecasts, as well as a number of analytical tools. Access to the core system is by secure password only and can be customized to accommodate the needs of various customers. For example, the product can be tailored to provide access to all or only certain markets, property types and report combinations. The Reis SE interface has been refined over the past several years to accommodate real estate professionals who need to perform market-based trend analysis, property specific research, comparable property analysis, and generate valuation and credit analysis estimates at the single property and portfolio levels.

On a quarterly basis, Reis updates thousands of neighborhood and city level reports that cover historical trends, current observations and, in a majority of its markets, five year forecasts on all key real estate market indicators. These updates are supported by property, neighborhood and city data gathered during the prior quarter.

Reports are retrievable by street address, property type (apartment, office, retail and industrial) or market/submarket and are available as full color presentation quality documents or in spreadsheet formats. These reports are used by Reis's customers to assist in due diligence and to support commercial real estate transactions such as loan originations, underwriting, acquisitions, risk assessment (including loan loss reserves and impairment analyses), portfolio monitoring and management, asset management, appraisal and market analysis.

Other significant elements of Reis SE include:

? real estate news stories chosen by Reis analysts to provide information relevant to a particular market and property type;

? customizable email alerts that let users receive proactive updates on only those reports or markets that they are interested in;

? property comparables that allow users to identify buildings or new construction projects with similar characteristics (such as square footage, rents or sales price);

? quarterly "first glance" reports that provide an early assessment of the apartment, office and retail sectors across the U.S. and preliminary commentary on new construction activity; and

? the "quarterly briefing" - a conference call during which Reis provides an analysis of its latest findings and forecasts.

Reis is continuously enhancing Reis SE by developing new products and applications. Examples of recently released enhancements include:

? the October 2008 launch of Transaction AnalyticsSM, 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. The resulting precision supports more informed valuations and decisions with regard to troubled debt and associated commercial real estate collateral. For all of Reis's metro areas and regions, users of Transaction AnalyticsSM can obtain, on demand, a customized read on historical, current and forecasted capital market conditions, offering key measurements of sales transaction activity, including mean, median, and 12-month rolling cap rates, total sales price, price per unit or square foot, and total transaction volume. The user may refine this analysis by including only properties that meet specified sales transaction characteristics (price or rate cap), or physical characteristics (size, age or class). All property level transactions are accessible within the module, providing complete transparency; and

? the February 2009 launch of Value AlertSM, an analytical tool that provides a quick measure of how previous commercial real estate value assumptions may need to be modified to reflect current economic realities. The tool can be applied to a portfolio as an initial screen to identify assets that may warrant further scrutiny.

Reis also intends to expand its coverage of retail markets during 2009, with additional markets beginning coverage in May 2009 and August 2009. As with the addition of apartment markets in 2007 and office markets in 2008, the expanded retail coverage will be available for an additional fee to our existing customers.

Reis's data is available to customers in four primary ways: (1) annual and multi-year subscriptions to Reis SE; (2) capped subscriptions allowing customers to download a limited number of reports; (3) online credit card purchases; and (4) custom data requests. Annual subscription fees range from $1,000 to over $600,000, depending on the combination of markets, property types and reports subscribed to and allow the client to download an unlimited number of reports over a 12-month period. Capped subscriptions generally range from $1,000 to $25,000 and allow clients to download a fixed retail value of reports over a 12-month period. Individual report sales typically range from $150 to $695 per report and are available to anyone who visits Reis's retail web site or contacts Reis via telephone, fax or email. However, certain reports are only available by a subscription or capped subscription account. Finally, custom data deliverables range in price from $1,000 for a specific data element to hundreds of thousands of dollars for custom portfolio valuation and credit analysis. Renewals are negotiated in advance of the expiration of an existing contract. Important factors in determining contract renewal rates include a subscriber's historical and projected usage pattern.

Reis focuses heavily on proactive training and customer support. Reis's dedicated customer service team offers customized on-site training and web-based and telephonic support, as well as weekly web-based training seminars open to all customers. The corporate training team also meets regularly with a large proportion of Reis's customers. Additional points of customer contact include mid-year service reviews, a web-based customer feedback program and account manager visits. All of these contacts are used to assist customers with their usage of Reis SE (including by maximizing their knowledge of the product), to identify opportunities for product adoption and increased usage and to solicit customer input for future product enhancements.

To protect our proprietary rights, we rely upon a combination of:

? trade secret, copyright, trademark, database protection and other laws at the Federal, state and local level;

? nondisclosure, non-competition and other contractual provisions with employees, vendors and consultants;

? restrictive license agreements with customers; and

? other technical measures.

We protect our software's source code and our database as either trade secrets or under copyright law. We license our services under license agreements that restrict the disclosure and use of our proprietary information and prohibit the unauthorized reproduction, re-engineering or transfer of the information in the products and/or services we provide.

We also protect the secrecy of our proprietary database, our trade secrets and our proprietary information through confidentiality and noncompetition agreements with our employees, vendors and consultants. Our services also include technical measures designed to deter and detect unauthorized copying of our intellectual property.

We have registered the trademarks for the Reis logo and "Your Window Onto the Real Estate Market."

Real estate transactions involve multiple participants who require accurate historical and current market information. Key factors that influence the competitive position of commercial real estate information vendors include: the depth and breadth of underlying databases; price; ease of use, flexibility and functionality of the software; the ability to keep the data up to date; scope of coverage by geography and property type; customer training and support; adoption of the service by industry leaders; consistent product innovation; and recognition by business trade publications.

Reis's senior management believes that, on a national level, only a small number of firms serve the property information needs of commercial real estate investors and lenders. Reis competes directly and indirectly for customers with online services or web sites targeted to commercial real estate professionals such as CoStar Group, Inc., Real Capital Analytics, Inc., Torto Wheaton Research, a wholly-owned subsidiary of CB Richard Ellis, Property and Portfolio Research Inc., a subsidiary of the Daily Mail and General Trust plc, and LoopNet, Inc., as well as with in-house real estate research departments.

The Company was originally formed on January 8, 1997. 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 is seeking to exit the residential development business in order to focus solely on the Reis Services business.

At March 31, 2009, the Company's residential development activities were comprised primarily of the following:

? The 259 unit Gold Peak condominium development in Highlands Ranch, Colorado, which we refer to as Gold Peak. Sales commenced in January 2006 and 245 Gold Peak units were sold as of March 31, 2009, leaving 14 units to be sold.

? The Orchards, a single family home development in East Lyme, Connecticut, upon which the Company could build 161 single family homes on 224 acres, which we refer to as East Lyme. Sales commenced in June 2006 and an aggregate of 33 homes and lots (25 homes and eight lots) were sold as of March 31, 2009.

? The Stewardship, a single family home development in Claverack, New York, which is subdivided into 48 developable single family home lots on 235 acres, which we refer to as Claverack.

During 2008, the Company made the decision to halt new home construction pending exploration of a bulk sale of lots at East Lyme and Claverack. In June 2008, the Company entered into a listing agreement authorizing a broker to sell the remaining lots at East Lyme. In September 2008, the Company sold eight partially improved East Lyme lots, in a single transaction, to a regional homebuilder. Separately, the Company is working with local and regional brokers related to the Claverack bulk sale initiative. There can be no assurance that the Company will be able to sell any or all of the homes in inventory or the remaining lots, individually or in bulk, at acceptable prices, or within a specific time period, or at all.

See Note 3 of the consolidated financial statements included in this filing for additional information regarding all of the Company's segments.

For a description of our selected significant accounting policies and estimates, see our Annual Report on Form 10-K for the year ended December 31, 2008.

Management considers certain metrics in evaluating the performance of the Reis Services business. These metrics are revenue, revenue growth, EBITDA (which is defined as earnings before interest, taxes, depreciation and amortization), EBITDA growth and EBITDA margin. Following is a presentation of these historical metrics for the Reis Services business (for a reconciliation of GAAP net income to EBITDA for the Reis Services segment and to Adjusted EBITDA on a consolidated basis for each of the periods presented here, see below).

(amounts in thousands, excluding

     percentages)

                                            For the Three Months Ended                        Percentage
                                                     March 31,                (Decrease)      (Decrease)
                                             2009               2008           Increase        Increase

     Revenue                             $      6,355       $      6,411     $        (56 )          (0.9 %)
     EBITDA                              $      3,016       $      2,692     $        324            12.0 %
     EBITDA
     margin                                      47.5 %             42.0 %




                                               For the Three Months Ended
                                              March 31,         December 31,                         Percentage
                                                2009               2008            (Decrease)        (Decrease)

     Revenue                               $       6,355      $        6,411     $         (56 )           (0.9 %)
     EBITDA                                $       3,016      $        3,026     $         (10 )           (0.3 %)
     EBITDA margin                                  47.5 %              47.2 %

Reis Services's EBITDA in the first quarter of 2009 grew 12.0% over the first quarter of 2008. For the three months ended March 31, 2009, the increase in EBITDA over the first quarter of 2008 is primarily the result of management's implementation of cost control measures during 2008 and the first quarter of 2009, which translated into an increase in EBITDA margin to 47.5% for the first quarter of 2009 as compared to 42.0% for the first quarter of 2008.

EBITDA for the first quarter of 2009 and the fourth quarter of 2008 were comparable, with only a $10,000 decrease and a slight improvement in EBITDA margin to 47.5% from 47.2%.

Revenue decreased slightly, by 0.9%, from the first quarter of 2008 to the first quarter of 2009 and also decreased 0.9% from the fourth quarter of 2008 to the first quarter of 2009. These results reflect the cumulative impact from declines in the renewal rate in the third and fourth quarters of 2008 and, separately, the net effect of price increases and decreases upon renewals. During the third and fourth quarters of 2008 and the first quarter of 2009, contract price increases on renewals were constrained due to usage reductions at some large customers as well as budgetary pressures at our customers, predominantly in the banking industry. We generally impose contractual restrictions limiting our immediate exposure to revenue reductions due to mergers and consolidations; however, our business may be negatively impacted by bankruptcies of existing customers. Our pricing model is based on actual and projected usage, and is generally not as susceptible to downturns as would be a model based upon individual user licenses. We have been and we may be impacted by future consolidation among our customers and potential customers, or in the event that customers enter bankruptcy or otherwise go out of business, as has occurred during the latter part of 2008.

Our largest customer accounted for 3.5% of Reis Services's revenue for the three months ended March 31, 2009. Our 14 largest customers, each of which accounted for greater than 1% of our revenue, aggregated 25.6% of Reis Services's revenue for the three months ended March 31, 2009.

Despite the current dislocations in the financial markets, overall report usage grew in the first quarter of 2009 over the fourth quarter of 2008 and was consistent with first quarter 2008 usage. Our overall trailing 12 month renewal rate through March 31, 2009 was 87%, with a higher rate among our institutional customers at 88%.

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 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 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)
                                                                       Residential
     Reconciliation of Net Income to EBITDA and                        Development
                  Adjusted EBITDA                                      Activities
     for the Three Months Ended March 31, 2009     Reis Services       and Other*       Consolidated

     Net income                                                                         $         277
     Income tax expense                                                                           205
     Income (loss) before income taxes            $         1,665     $      (1,183 )             482
     Add back:
     Depreciation and amortization expense                  1,257                23             1,280
     Interest expense, net                                     94                25               119
     EBITDA                                                 3,016            (1,135 )           1,881
     Add back:
     Stock based compensation expense, net                      -               301               301
     Adjusted EBITDA                              $         3,016     $        (834 )   $       2,182



                                                                       Residential
     Reconciliation of Net Income to EBITDA and                        Development
                  Adjusted EBITDA                                      Activities
     for the Three Months Ended March 31, 2008     Reis Services       and Other*       Consolidated

     Net income                                                                         $         448
     Income tax expense                                                                           400
     Income (loss) before income taxes            $         1,249     $        (401 )             848
     Add back:
     Depreciation and amortization expense                  1,066                65             1,131
     Interest expense (income), net                           377              (215 )             162
     EBITDA                                                 2,692              (551 )           2,141
     Add back:
     Stock based compensation expense, net                      -                39                39
     Adjusted EBITDA                              $         2,692     $        (512 )   $       2,180

     Reconciliation of Net (Loss) to EBITDA and                        Residential
                  Adjusted EBITDA                                      Development
      for the Three Months Ended December 31,                          Activities
                        2008                       Reis Services       and Other*        Consolidated

     Net (loss)                                                                         $       (8,743 )
. . .