Commercial real estate analytics giant CoStar Group is getting into the residential sector after acquiring a company called Homesnap Inc. for $250 million.
Homesnap sells technology that enables real estate brokers to manage listings within their applications and on their websites. The platform is used by around 300,000 residential real estate professionals around 30 times per month, per user. The company has forecast its 2020 revenue to top $40 million, up 45% from one year before.
CoStar said that when it closes on the Homesnap acquisition this year, it will quadruple the number of paying professional brokers and active agent users on its CoStar Group U.S. platforms from around 100,000 now, to 400,000. In addition, the number of U.S. property listings across its various brands will double from around 1.35 million now to over 2.6 million.
“The tools and functionality developed by Homesnap for residential property agents, such as lead generation, client collaboration, and digital advertising, have direct applicability to commercial brokers,” said CoStar Founder and Chief Executive Andrew Florance in a statement.
Florance said one of his goals is to bring Homesnap’s capabilities to the rest of the company’s audiences, adding that this would enable the company to expand and deepen its collaboration with MLSs across the U.S.
“A very large percentage of CoStar’s clients such as investors, banks, government agencies, appraisers, suppliers, and brokerage firms are active in both commercial and residential real estate, so we believe that they would welcome a more comprehensive solution for their needs across all real estate segments,” Florance explained.
What Florance didn’t say is that the acquisition gives CoStar a route into the residential real estate market for the first time, enabling it to expand beyond its traditional focus on offic, hotel, apartment and other commercial real estate sectors. He also hinted at further acquisitions in the real estate sector in future.
“CoStar doesn’t buy one [company] and do what they were doing forever,” Florance told The Wall Street Journal in an interview. “We tend to acquire companies and integrate those companies together.”
One company that CoStar might be looking into acquiring is CoreLogic, a real estate data and analytics firm that focuses on residential real estate, the Journal said.