Inc., one of the world’s largest providers of commercial real-estate information and analytics, has taken its first major step into the residential data business by agreeing to pay $250 million for Homesnap Inc.
Founded in 2012, Homesnap is a fast-growing company that provides residential real-estate brokers with apps and other technology for managing and analyzing their listings as well as the broader market. About 300,000 residential agents use it an average of 30 times a month.
The all-cash acquisition is expected to close later this year, CoStar said Sunday.
Headquartered in Washington, D.C., CoStar has been on an acquisition binge in recent years. Buying Bethesda, Md.-based Homesnap would be a relatively small deal for the powerhouse in offices, hotels, apartments and other types of commercial property. CoStar had $1.4 billion of revenue last year.
But the single-family home business, which dwarfs the size of the commercial property market, represents a new front for CoStar. The 33-year-old company, which collects data in over 120 countries and operates online marketplaces, typically makes more than one acquisition when it expands into a new property type.
“CoStar doesn’t buy one [company] and do what they were doing forever,” said Andrew Florance, CoStar’s founder and chief executive, in an interview. “We tend to acquire companies and integrate those companies together.”
CoStar is among the handful of bidders for
one of the largest residential real-estate data companies, CoreLogic confirmed last month. The sales process, which the CoreLogic board began earlier this year, has pushed its shares to close to $80, valuing CoreLogic at over $6 billion.
The home-sales market, which rose to a 14-year high in October, has been one of the few bright spots in the U.S. economy. Sales volume has been fueled by ultralow borrowing costs and the sudden shift in living preferences during the pandemic.
Homesnap employs approximately 150 people. Its revenue this year is expected to be about $40 million, up about 45% from 2019.
Homesnap has cut deals with hundreds of the multiple listing services in the U.S., which include most of the residential property on the market in a given area. Under those deals, all internet users have access to some 1.3 million property listings, and real-estate brokers have access to Homesnap’s advanced analytic and data features.
Mr. Florence said that CoStar’s commercial real-estate tools would help bolster Homesnap’s offerings and vice versa. “I would say that 50% of our broker clients do some residential and, of the top 100 residential firms, 80% do some commercial,” he said. “So we would think these tools as they come together would be pretty powerful.”
Write to Peter Grant at email@example.com
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Appeared in the November 23, 2020, print edition as ‘CoStar Eyes Residential DataCoStar in Talks for HomesnapCoStar Seeks Residential Data.’
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