CoStar adds millions of renters to Apartments.com with ForRent buy

By Paul Norman - Wednesday, September 13, 2017 13:13

CoStar Group has entered an agreement to acquire ForRent from Virginia-based Dominion Enterprises as it expands its Apartments.com online apartment rental platform in a drive to list every apartment unit available for rent in the US.

Under the purchase agreement, expected to close in the fourth quarter of 2017, CoStar will acquire the operator of four multifamily rental websites for $350m in cash and $35m in CoStar Group stock.

In addition to ForRent.com, ForRent’s websites include AFTER55.com, CorporateHousing.com and ForRentUniversity.com. The websites had approximately 17,000 advertised properties as of June 2017and generated over 47m visits and an average of 3.5m unique monthly visitors during the first six months of 2017.

“110 million renters in the U.S. collectively spend just under half a trillion dollars a year on rent, representing one of the fastest growing consumer market segments,” said CoStar Group Founder and Chief Executive Andrew C. Florance. “Our commitment to the multifamily industry has been resolute and evidenced by our investment in marketing, technology and the curation and delivery of original content to create the premier marketplace for renting an apartment in the US.”

CoStar plans to operate ForRent.com as a complementary online brand while expanding exposure of its property listings across the Apartments.com network, increasing exposure by approximately 500% following the acquisition, according to Florance.

“Our research, technology and marketing initiatives have created the most-visited apartment listing site, which in turn delivers unprecedented levels of leads, leases and value to our advertising customers. We look forward to delivering that same value to all renters and advertisers on the ForRent network of sites," Florance added.

CoStar made a big splash when it jumped into the apartment rental listing space in 2014 with the acquisition of Apartments.com.

The deal for ForRent will add scale to CoStar's apartment rental business, enabling it to provide more exposure of rental properties to millions more prospective renters every month by offering prospective renters access to the most complete and accurate inventory of apartment availabilities. In addition, CoStar's multifamily information and analytics stand to benefit from the additional properties and data from ForRent.

CoStar earlier this year acquired Southern California-focused Westside Rentals after adding Atlanta-based Apartment Finder in 2015. Scale is critically important in the online apartment rental world since sites with the largest number and most accurate listings tend to attract the most renters, and apartment owners want their listings on the sites with the most traffic.

“Competition is all about traffic,” Ronald Josey, senior analyst with JMP Group LLC told The Wall Street Journal. “The site with the most traffic typically wins.”

CoStar expects the additional scale will help it compete for renters and listings in the crowded online rental space, which includes direct competitors such as RentPath Inc., and other big names, such as Facebook, Google and Craigslist, which also attract sizable traffic from people looking online for rental apartments.

CoStar Group

Get in Touch
+44 203 205 4600