CoStar buys ForRent for $385 million US

12 Sep 2017

CoStar Group Inc. (NASDAQ: CSGP) acquired ForRent, a division of Dominion Enterprises. The price: $350 million U.S. in cash and $35 million in CoStar Group stock.

The deal further consolidates CoStar’s impressive hold on the classified ad business for rental properties. CoStar also owns and operates Apartments.com, ApartmentFinder, and ApartmentHomeLiving, in addition to LoopNet for commercial properties.

ForRent lists properties on four different websites: ForRent.com, After55.com, CorporateHousing.com, and ForRentUniversity.com. ForRent had a total of about 17,000 properties advertised across its websites as of June 2017, generating an average of 3.5 million unique monthly visits, according to the company.

ForRent has headquarters in Norfolk, Virginia and 475 employees located in 38 offices around the United States.

ForRent advertisers’ properties will be featured on Apartments.com after the transaction closes. “For the investors and lenders relying on CoStar for multi-family information and analytics, we expect the addition of properties and data from ForRent will further strengthen our information offering,” said CoStar CEO Andrew Florance in a news release.

The rental market comprises about 110 million renters in the U.S., Florance added. “They spend just under half a trillion dollars a year on rent, representing one of the fastest growing consumer market segments.”

ForRent.com will remain a separate brand from Apartments.com.

ForRent is expecting 2017 revenue of $100 million U.S.. CoStar says it expects “significant operating efficiencies” after the acquisition is complete. CoStar predicted additional revenue of $75 million to $85 million after the client bases are merged and “certain non-core services” are discontinued.

The transaction is expected to close in the fourth quarter of 2017.

We will have more on the acquisition in the next issue of Classified Intelligence Report.

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Brian Blum

Brian Blum covers the U.S., Canada and Israel for Classified Intelligence Report, and contributes to our special reports and research projects. Originally from San Francisco and now based in Jerusalem, he has been with the AIM Group since 2004. He is the president of Blum Interactive Media, specializing in writing and multimedia content development for online, print, video and audio. His clients include newspapers, universities and non-profits. He is currently working on a book about the billion-dollar bankruptcy of a once high-flying Israeli startup.