Our success depends on our subscribers’ confidence in the comprehensiveness, accuracy, and reliability of the data and forecasts we provide. We believe that we take adequate precautions to safeguard the completeness and accuracy of our data and that the information is generally current, comprehensive and accurate. Nevertheless, we depend to a large degree on information provided to us on a voluntary basis by third parties, including commercial real estate brokers, agents and property owners. Further, data is susceptible to electronic malfeasance including theft, alteration, deletion, viruses and computer hackers. In addition, our reports and conference calls for subscribers may contain forecasts with respect to real estate trends. Although our contracts contain language limiting our liability if any of our data or forecasts are inaccurate or are later not borne out by actual results, for any of the above reasons, demand for our services could diminish and we may be exposed to lawsuits claiming damages resulting from inaccurate data and forecasts.

Our business depends in large measure on the intellectual property utilized in our methodologies, software and database. We rely on a combination of trademark, trade secret and copyright laws, registered domain names, contracts which include non-disclosure provisions, work-for-hire provisions, and technical security measures to protect our intellectual property rights. However, we do not hold Federal registrations covering all of our trademarks and copyrightable materials. We also do not own any patents or patent applications. Our business could be significantly harmed if we do not continue to protect our intellectual property. The same would be true if claims are made against us alleging infringement of the intellectual property rights of others. Any intellectual property claims, regardless of merit, could be expensive to litigate or settle, and could require the expenditure of substantial amounts of time and expenditures.

Our business depends upon the satisfactory performance, reliability and availability of our web sites. Problems with the web sites could result in reduced demand for our services. Furthermore, the software underlying our services is complex and may contain undetected errors. Despite testing, we cannot be certain that errors will not be found in our software. Any errors could result in adverse publicity, impaired use of our services, loss of revenues, cost increases or legal claims by subscribers.

Additionally, our services substantially depend on systems provided by third parties, over whom we have little control. Interruptions in service could result from the failure of data providers, telecommunications providers, or other third parties, including due to the actions of computer hackers. We depend on these third-party providers of Internet communication services to provide continuous and uninterrupted service. We also depend on Internet service providers that provide access to our services. Any disruption in the Internet access provided by third-party providers or any failure of third-party providers to handle higher volumes of user traffic could harm our business.

Our operations depend upon our ability to maintain and protect our computer systems. While we believe that our systems, most of which are redundant and independent systems in separate locations. While we believe that our systemslocations, are adequate to support our operations, our systems may be vulnerable to damage from break-ins, unauthorized access, computer viruses, vandalism, fire, floods, earthquakes, power loss, telecommunications failures, terrorism, acts of war, and other similarly damaging events. Although we maintain insurance against fires, floods, and general business interruptions, the amount of coverage may not be adequate in any particular case. Furthermore, any damage or disruption could materially impair or block our ability to provide services, which could significantly impact our business.

Experienced computer programmers, or hackers, may attempt to penetrate our network security from time to time. Although we have not experienced any security breaches to date and we maintain a firewall, a hacker who penetrates network security could misappropriate proprietary information or cause interruptions in our services. We might be required to further expend significant capital and resources to protect against, or to alleviate, problems caused by hackers. We also may not have a timely remedy against a hacker who is able to penetrate our network security. In addition to purposeful security breaches, the inadvertent transmission of computer viruses or anything else manifesting contaminating or destructive properties could expose us to litigation or to a material

We do not collect sales or other similar taxes in states other than New York. However, one or more states (other than New York) may seek to impose sales tax collection obligations on out-of-state companies, such as Reis, which engage in online commerce. A successful assertion that we should collect sales, use or other taxes on the sale of productproducts or services into these states could subject us to liability for current or past taxes due, and could increase the effective price of our products and services, which could harm our business.

We may in the future attempt to further expand our markets and services in part through acquisitions of other complementary businesses, services, databases and technologies. Mergers and acquisitions are inherently risky, and we cannot assure you that future acquisitions, if any, will be successful. The successful execution of any future acquisition strategy will depend on our ability to identify, negotiate, complete and integrate such acquisitions and, if necessary, obtain satisfactory debt or equity financing to fund those acquisitions, to the extent that the Company requires cash in excess of amounts it may then have on its balance sheet at that time. Any such acquired businesses would generally be subject to the other risks described under “Risk Factors Relatingthis “Risks Related to Our Commercial Real Estatethe Reis Services Business and the Information Services Business” in thisIndustry Generally” section.

Failure to manage and successfully integrate acquired businesses could harm our business. In addition, if we finance acquisitions by incurring additional debt, our financial condition or liquidity could be adversely impacted. If we finance or otherwise complete acquisitions by issuing equity or convertible debt securities, existing stockholders’ ownership may be diluted.

Reis may be exposed to various claims associated with the development, construction and sale of condominium units, single family homes or lots. Claims related to environmental remediation, dissatisfaction by homeowners and homeowners’ associations with the construction of condominiums, homes and amenities by us and/or our developer partners in any condominium or subdivision development, or other matters, may result in litigation costs, remediation costs, warranty expenses or settlement costs which could be material to Reis’s results of operations and financial condition.

Risks Related to Ownership of Our Common Stock, Our Capital Structure and local laws, ordinances, rulesReis Generally

Our common stock is thinly traded and regulations concerning protectionthere may continue to be little or no liquidity for shares of our common stock.

Historically, our common stock has been thinly traded, and an active trading market for our common stock may not develop. In the absence of an active public healthtrading market, investors trying to sell their shares may find it difficult to find buyers for their shares at prices quoted in the market or at all.

Our board of directors, or Board, may authorize transactions with respect to our common stock. These transactions may include a reverse stock split or odd-lot or other share repurchase programs. Between December 2008 and August 2011, our Board authorized the environment. These laws may impose liability on property owners or operators forrepurchase of an aggregate of $5,000,000 of our common stock. Repurchases through December 31, 2011 resulted in the costscumulative repurchase of removal or remediation of hazardous or toxic substances on real property, without regard to whether the owner or operator knew of, or was responsible for, the presenceapproximately 8.1% of the hazardouscommon shares outstanding at the time of the Board’s initial authorization in December 2008. At December 31, 2011, approximately $551,000 remained available for repurchases under the existing authorizations. All decisions regarding any such authorizations to repurchase stock will be at the discretion of our Board and will be evaluated from time to time in light of the Company’s liquidity and anticipated cash needs, the price per share of our common stock, the number of shares of our common stock outstanding, applicable NASDAQ rules, applicable law and other factors deemed relevant. If we effect any such repurchases, the liquidity of our common stock could be adversely affected by the reduced number of shares that would be outstanding. In addition, a share repurchase program requires the payment of cash by Reis to stockholders, which could adversely impact our liquidity. If we effect a reverse stock split, there can be no assurance that the market price per share of our common stock after the reverse stock split will rise or toxic substances. remain constant in proportion to the reduction in the number of shares of our common stock outstanding before the reverse stock split.

Our executive officers and directors own a significant percentage of our stock and have significant control of our management and affairs, and they may take actions which may not be in the best interest of other stockholders.

The presenceexecutive officers and directors of orReis in the failure to properly remediate, such substancesaggregate beneficially owned approximately 23.3% of Reis’s outstanding common stock as of December 31, 2011. Of this total, Lloyd Lynford and Jonathan Garfield, each of whom is an executive officer and a director of the Company, beneficially owned 11.6% and 7.9%, respectively. This significant concentration of share ownership may adversely affect the valuetrading price of our common stock because investors may perceive disadvantages in owning stock in companies where management holds a property,significant percentage of the voting power. This concentration of ownership may have the effect of delaying or preventing a change of control, including a merger, consolidation or other business combination involving Reis, or discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control, even if such a change of control might be seen as beneficial to other Reis stockholders.

Our business depends on retaining and attracting capable management and operating personnel.

The implementation and development of Reis’s business plan require the skills and knowledge of our senior executives, as well as our abilitysales, technology and operational personnel. Reis may not be able to selloffset the property,impact of the loss of the services of these individuals or other key officers or employees because its business requires skilled management, as well as technical, product and technology, and sales and marketing personnel, who are in high demand and are often subject to borrow funds usingcompeting offers. Competition for qualified employees is intense in the information industry, and the loss of a substantial number of qualified employees, or an inability to attract, retain and motivate additional highly skilled employees, could have a material adverse impact on Reis.

Although Reis uses various incentive programs to retain and attract key personnel, these measures may not be sufficient to either attract or retain, as applicable, the personnel required to ensure our success. In addition, grants and issuances pursuant to our equity incentive plans may result in dilution to Reis stockholders.

The loss of one or more of our senior executives, or our sales, technology or operational personnel, could have a material adverse impact on the continuing operations of Reis and could adversely affect the market price of Reis’s common stock.

Our governing documents and Maryland law contain anti-takeover provisions that propertymay discourage acquisition bids or merger proposals, which may adversely affect the market price of our common stock.

Reis’s articles of amendment and restatement contain provisions designed to discourage attempts to acquire control of Reis by merger, tender offer, proxy contest, or removal of incumbent management without the approval of our Board. These provisions may make it more difficult or expensive for a third party to acquire control of Reis even if a change of control might be seen as collateral. Costs associated withbeneficial by other Reis stockholders. This could discourage potential takeover attempts and could adversely affect the foregoingmarket price of Reis’s common stock. Reis’s governing documents:

In addition, under Maryland law, certain “business combinations” (including certain issuances of equity securities) between a Maryland corporation and any person who beneficially owns 10% or more of the voting power of the corporation’s shares or an affiliate thereof are prohibited for five years after the most recent date on which the interested stockholder becomes an interested stockholder, unless waived by the then existing board. The Board may approve certain transactions or exempt certain interested stockholders at any time prior to a party becoming an interested stockholder. At December 31, 2011, there were no exemptions from the Maryland statute.

Increases in extreme cases could exceedinterest rates would increase our interest expense.

As of December 31, 2011, we had approximately $5,691,000 of variable rate debt outstanding. During the year ended December 31, 2011, the interest rate on our debt was LIBOR + 1.50% and ranged from a low of 1.69% to a high of 1.85% during the year, based upon changes in the 30 day LIBOR. The 30 day LIBOR was 0.30% at December 31, 2011.

We may incur additional indebtedness in the future. If interest rates increase, so will our interest costs, which may have a material adverse effect on our business, results of operations, cash flows and financial condition. In the past, we limited our exposure to significant interest rate increases by purchasing interest rate caps. In deciding whether to purchase interest rate caps or other hedging instruments, we weigh the value of protection against significant increases in interest rates against the contaminated property. Environmental claims are generallycost of such instruments. Based on the December 31, 2011 debt balance, a 1% increase in the base interest rate on our variable rate debt would result in approximately $57,000 of additional interest being incurred on an annualized basis.

Declines in operational performance could cause financial covenants to be violated on our outstanding debt.

At December 31, 2011, the outstanding balance of the Reis Services Bank Loan was approximately $5,691,000. Provisions in the Bank Loan impose restrictions on Reis Services’s ability to, among other things:

The credit agreement also contains other customary covenants, including covenants which require Reis Services to meet specified financial ratios and financial tests. If Reis Services were not coveredable to comply with these covenants in the future, the failure to do so may result in the declaration of an event of default. Furthermore, certain events, such as the delisting of our common stock from a national stock exchange or the voluntary or involuntary filing by our insurance programs.Reis under any bankruptcy, insolvency or similar law (which is not stayed or dismissed within certain time periods), will cause an event of default. In addition, applicable environmental laws create liens on contaminated sitesan event of default, if not cured or waived, may result in favorthe acceleration of the government for damagesmaturity of indebtedness outstanding under this agreement, which would require Reis Services to pay all amounts outstanding. If an event of default occurs, Reis Services may not be able to cure it within any applicable cure period, if at

all. If the maturity of this indebtedness is accelerated, Reis Services or Reis may not have the ability to borrow or obtain sufficient funds to replace the accelerated indebtedness on terms acceptable to us, or at all. In particular, the interest rate under the Bank Loan is significantly lower than the interest rate the Company would likely be able to obtain on new financing. Furthermore, the Bank Loan is secured by Reis Services’s assets and, costs it incurs in connection with a contamination.

Our ability to use our propertiesnet tax operating loss carryforwards will be subject to limitation and the generation of which we are aware relates to a portion of the East Lyme project. This land requires remediation of pesticides used on the property when it was an apple orchard at a cost of approximately $1,000,000. Remediation costs were consideredtaxable income in the value of the property and are recognized as a liabilityfuture.

The Company has aggregate net operating loss, or NOL, carryfowards aggregating approximately $56,014,000 at December 31, 20102011. These NOLs include NOLs generated subsequent to the Merger, losses from Private Reis prior to the Merger, losses obtained from the Company’s 1998 merger with Value Property Trust and 2009.

None.

As of December 31, 2010,2011, the Company leases approximately 33,50038,000 square feet of space in New York, New York for its principal executive offices, under a lease expiringtwo leases, both of which expire in September 2016.

Reis, Inc. and two of its subsidiaries (Gold Peak at Palomino Park, LLC (“GP LLC”) and Wellsford Park Highlands Corp. (“WPHC”)) are the subject of a suit brought by the homeowners’ association at the Company’s former 259-unit Gold Peak condominium project outside of Denver, Colorado. This suit was filed in District Court in Douglas County, Colorado on October 19, 2010, seeking monetary damages (not quantified at the time) relating to alleged design and construction defects at the Gold Peak project. The construction manager/general contractor for the project (not affiliated with Reis) and two former officers of Reis, Inc. (one of whom was also a director) have also been named as defendants in the suit. In October 2011, experts for the plaintiff delivered a report alleging a cost to repair of approximately $19 million. Trial commenced on February 21, 2012 and a verdict is expected in mid-March 2012.

In connection with the development of Gold Peak, the Company purchased a commercial general liability “WRAP” insurance policy that covers the Company (including its subsidiaries) and its former officers, the construction manager/general contractor and the subcontractors. The Company, upon advice of counsel and based on a reading of the policy, has taken the position that a total of $9 million (and possibly $12 million) of coverage is available for this claim. The insurer has taken the position that only $3 million of coverage is provided. The Company has filed suit against this insurer, alleging failure to cover this claim, bad faith and other related causes of action. The Company has also brought a separate claim against the architect and a third party inspector engaged at Gold Peak, and is also seeking coverage under additional applicable insurance policies maintained by the Company, co-defendants or others.

Neither GP LLC nor WPHC has substantial assets or other ability to pay (other than the “WRAP” insurance policy described above). The plaintiff is seeking to hold Reis, Inc. directly liable as the developer of the project and, if successful against one or more of GP LLC or WPHC, will seek to hold Reis, Inc. indirectly liable through a “piercing the corporate veil” theory. Separately, Reis, Inc. would likely have indemnification obligations to its former officers/directors, to the extent either or both of these individuals is held liable.

The Company believes that it and its co-defendants have valid defenses to some or all of the plaintiff’s allegations (including attempts to hold Reis, Inc. directly or indirectly liable), that insurance will cover some or all of any eventual settlement or judgment, and that the defendants other than Reis, Inc., GP LLC, WPHC and the former officers, are likely to be liable for some of any remaining settlement judgment amount. Although not factored into the Company’s assessment of this case for purposes of reserves, in the event of an adverse judgment, the Company would expect to appeal, and would continue to pursue all available remedies against applicable insurers or other parties at fault.

Based on pre-trial disclosures and the positions of the parties’ experts, it is likely that a judgment of at least $6.7 million (plus approximately $1 million of the plaintiff’s costs) will be entered against GP LLC. In the event of such a judgment against GP LLC and/or WPHC (but without a finding of liability against Reis, Inc. or the former officers), the Company would be under no obligation to fund any shortfall by GP LLC or WPHC.

At this time, the low end of the Company’s expected range of net exposure is believed to be approximately $4,740,000. The Company has recorded a charge of approximately $4,460,000 in discontinued operations at December 31, 2011. The $4,740,000 amount reflects the $7,740,000 minimum exposure referred to above, net of minimum expected insurance recovery of $3,000,000, all of which is reflected in discontinued operations on the December 31, 2011 balance sheet. It is possible that a settlement or judgment in this matter could involve the payment by the Company of an amount that could be material to the Company’s reportable income (loss) from discontinued operations, net income, its properties are subjectconsolidated financial position or cash flows. It would not have any effect on the Company’s income from continuing operations.

The Company is not a party to any other litigation that could reasonably be foreseen to be material litigation.

The Company’s common shares trade on the NasdaqNASDAQ Global Market under the symbol “REIS”.“REIS.” As of December 31, 2010,2011, there were approximately 380362 holders of record of our common stock. This number does not reflect beneficial holders of our common stock through accounts maintained at participants in The Depository Trust Company.

The high and low closing sales prices per share for our common stock for each quarter in the years ended December 31, 20102011 and 20092010 are as follows:

The following graph compares the cumulative total stockholder return on Reis’s common stock, which is represented below by “REIS,” for the period commencing December 31, 20052006 through December 31, 2010,2011, with the cumulative total return on the Russell 2000 Index, which we refer to as the Russell 2000, and the S&P 500 Index, which we refer to as the S&P 500, for the same period. Reis has chosen the Russell 2000 based on the market capitalization of the issuers contained in that index. Reis has not identified a peer group, due to the limited number of issuers in businesses similar to ours. Total return values were calculated based on cumulative total return assuming (1) the investment of $100 in the Russell 2000, the S&P 500 and Reis common stock on December 31, 2005,2006, and (2) reinvestment of dividends. The total return for Reis common stock from December 31, 20052006 to December 31, 20102011 was a gain of approximately 17.2%21.3% versus gainsa gain of approximately 24.5%0.7% for the Russell 2000 and 12.0%a loss of 1.2% for the S&P 500.

The Company did not declare or distribute any dividends during 2010the years ended December 31, 2011 or 2009.

Reis does not currently intend to declare or distribute any dividends. All decisions regarding the declaration and payment of dividends will be at the discretion of the Board and will be evaluated from time to time by the Board in light of the Company’s financial condition, earnings, cash flows, growth prospects, restrictions under the Company’s credit agreement, applicable law and other factors that the Board deems relevant.

The Company has not sold any unregistered securities within the past three years.

Between December 2008 and June 2010, the Board authorized the repurchase of up to an aggregate amount of $1,000,000$4,000,000 of the Company’s common stock.  Previously,stock, which authorizations were fully utilized by December 2010. In August 2011, the Board had authorized the repurchasean additional $1,000,000 to make stock repurchases (of which approximately $551,000 remained available as of an aggregate of $3,000,000 of the Company’s shares.  In April 2010, the Company completedDecember 31, 2011). The stock repurchases under the initial $3,000,000 authorization.  The program permits purchasesare permitted from time to time in the open market or through privately negotiated transactions. Depending on market conditions, financial developments and other factors, additional amounts may be authorized by the Board whereby future purchases could be commenced or suspended at any time, or from time to time, without prior notice and the program may be expanded with prior notice. The Company may make purchases pursuant to a trading plan under Securities Exchange Act Rule 10b5-1, permitting open market purchases of common stock during blackout periods consistent with the Company’s “Policies for Transactions in Reis Stock and Insider Trading and Tipping.” During the fourth quarter of 2010,2011, the Company repurchased the following shares of common stock:

From the inception of the share repurchase programs in December 2008 through December 17, 2010,31, 2011, the Company purchased an aggregate of 838,076888,136 shares of common stock at an average price of $4.77$5.01 per share, for an aggregate of $4,000,000.  Under the repurchase programs,approximately $4,449,000. Cumulatively, the Company has repurchased approximately 7.6%8.1% of the common shares outstanding at the time of the Board’s initial authorization in December 2008.

For additional information concerning the Company’s capitalization, see Note 10 to the Company’s consolidated financial statements.

For purposes of calculating the aggregate market value of those common shares of the Company held by non-affiliates, as shown on the cover page of this annual report on Form 10-K, it has been assumed that all of the outstanding shares at June 30, 20102011 were held by non-affiliates except for shares held by directors and officers of the Company. However, this should not be deemed to constitute an admission that all of such directors and officers are, in fact, affiliates of the Company, or that there are not other persons who may be deemed to be affiliates of the Company. For further information concerning shareholdings of officers, directors and principal stockholders, see “Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.”

The following table presents selected financial data for the Company and should be read in conjunction with “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and the consolidated financial statements included herein starting at Page F-1. For the periods presented, this information conforms with the current financial statement presentation which segregates the assets and liabilities, as well as the operating results of the Company’s Residential Development Activities segment, and other related costs, as a smallerdiscontinued operation.

Consolidated information related to the operations or cash flows for year ended December 31, 2007 has been excluded from the table as during that year, from the period January 1, 2007 to May 31, 2007, the Company was reporting company, as defined by Rule 12b-2 under the Securities Exchange Actliquidation basis of 1934, and are not requiredaccounting. As a result of the Merger, the Company commenced reporting on the going concern basis of accounting for the period June 1, 2007 to provideDecember 31, 2007. Inclusion of the information otherwise called for under2007 would not provide any meaningful historic or trend information of the continuing business of the Company for this item.

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

Reis, Inc., which we refer to as either the Company or Reis, is a Maryland corporation. The Company’s primary business is providing commercial real estate market information and analytical tools for its subscribers, through its Reis Services subsidiary. For disclosure and financial reporting purposes, this business is referred to as the Reis Services segment.

Reis Services, including its predecessors, was founded in 1980. 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, warehouse/distribution and industrialflex/research & development 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 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.

Reis was originally formed on January 8, 1997. Reis acquired the Reis Services business by merger in May 2007, which we refer to as the Merger. Prior to May 2007, Reis operated as Wellsford Real Properties, Inc., which we refer to as Wellsford. Wellsford’s primary operating activities immediately prior to the Merger, and conducted through its subsidiaries, were the development, construction and sale of its three residential projects and its approximate 23% ownership interest in the Reis Services business. The Company completed the sale of the remaining units at its Colorado project in September 2009, and sold its Claverack, New York project in bulk in February 2010.

The Company has determined, as a result of the April 2011 sale of property in East Lyme, Connecticut, that the Residential Development Activities segment, including certain general and administrative costs that supported that segment’s operations, should be presented as a discontinued operation. As a result of this determination and the fact that the historic operations and cash flows can be clearly distinguished, the operating results of the Residential Development Activities segment and related general and administrative costs are aggregated for separate presentation apart from continuing operating results of the Company could build 161 single family homes on 224 acres.  An aggregate of 42 homes and lots (29 homes and 13 lots) were sold as of December 31, 2010.  At December 31, 2010,in the remaining East Lyme inventory included 119 lots.  The Company is working with a broker to sell the remaining 119 lots in one or more bulk sale transactions.  There can be no assurance that the Company will be able to sell the remaining 119 lots in one or more bulk transactions at acceptable prices, or within a specific time period, or at all.  None of the Company’s remaining real estate is encumbered by debt.