UPDATED, Sep. 12, 2:14 p.m.: New York’s brokerage firms may be no match for StreetEasy and its parent Zillow, but CoStar looks to be trying to become one.
The real estate data company agreed to buy the rental listing site ForRent.com for $385 million in a bid to list “every single apartment in the U.S. being marketed, whether it’s someone’s garage apartment up to the largest institutional property,” according to its CEO Andrew Florance.
ForRent.com has 8 million monthly visitors, according to CoStar. The Wall Street Journal reported that CoStar is paying $350 million in cash for the Virginia-based firm and $35 million in stocks.
CoStar started out as a commercial property database but has been branching out into residential listings. In 2014, it bought Apartments.com for $585 million and a year later it added Apartment Finder.
Listing websites like Apartments.com become more appealing to consumers the more listings they offer, which gives them an incentive to grow quickly by acquiring competitors.
CoStar’s main competitors in the rental apartment listing business are Zillow and NewsCorp’s Realtor.com. Zillow’s New York subsidiary StreetEasy has been battling brokerage firms for months over its decision to start charging them for listings. Several brokerages launched a boycott, but that effort suffered a big blow last week when Corcoran parent Realogy signed a deal with StreetEasy to cover listing fees for its brokers.
Meanwhile, CoStar is locked in a legal battle with its main rival in the commercial property data business. CoStar accuses Xceligent of copyright infringement, while Xceligent accuses Florance’s firm of anti-competitive practices. [WSJ] – Konrad Putzier