Internet-based real estate data firm CoStar Inc. has said it plans to acquire apartment listings firm ForRent.com for a whopping $385 million as it continues its expansion into the multi-family home market.
Washington, D.C.-based CoStar is buying ForRent.com as part of its plan to list "every single apartment in the U.S. being marketed, whether it's someone's garage apartment up to the largest institutional property," said Andrew Florance, CoStar's founder and chief executive, in an interview with Fox Business.
The acquisition means that Norfolk, Virginia-based ForRent — which owns listings sites including ForRent.com, After55.com, CorporateHousing.com and ForRentUniversity.com — will join the Apartments.com network, which D.C.-based real estate giant Costar acquired in 2014 for $585 million.
The transaction is expected to close in the fourth quarter, according to the company announcement.
ForRent.com will remain a distinct brand under the deal, and CoStar will integrate the technology into its model by mid-2018. The idea is that advertisers will be able to manage listings across all of these networks through one website, and it will make operations more efficient for users across the board, the company said.
"We believe this is a beneficial combination for all of our constituents,” including prospective renters, advertisers, investors and lenders, added Florance.
ForRent had advertised about 17,000 properties on its website as of June 2017, with more than 47 million visits and 3.5 million unique monthly visitors on average, through the first six months of the year, according to the announcement.
ForRent’s 2017 revenue is expected to reach about $100 million. CoStar expects the acquisition to bring in an additional $75 million to $85 million in revenue once the new platform is integrated, and that ForRent will contribute between $17 million and $20 million in the fourth quarter of 2017.
"Our revenue in the multifamily space has grown rapidly over the past few years," said Scott Wheeler, CoStar CFO, in a statement. "When we combine ForRent with our existing advertising and information revenues from the multifamily industry, we expect to approach a $400 million revenue run rate by the end of 2017."