CoStar Group, a global giant in commercial real estate information and analytics, is jumping into the residential world. The company announced it will purchase Homesnap Inc. for $250 million in cash.
Homesnap provides residential real estate brokers with apps and technology for managing listings. About 300,000 residential real estate professionals use Homesnap, averaging 30 times a month. Homesnap’s revenue this year is expected to top $40 million, a 45% increase over a year ago.
CoStar says the addition of Homesnap will quadruple the number of professional paying brokers and active agent users on its CoStar Group U.S. platforms from about the current 100,000 to more than 400,000. Also, the number of U.S. property listings available across CoStar’s brands is expected to double from about 1.35 million currently to more than 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,” says Andrew Florance, CoStar’s founder and chief executive. “Our goal is to make these enhanced capabilities available to all of our audiences. Combining forces with Homesnap is also expected to enable us to expand and deepen our collaboration with MLSs nationwide. 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.”
The acquisition is expected to close later this year.
This offers a new exploration for CoStar into the single-family home side of real estate, beyond its usual focus on the office, hotel, apartment, and other commercial property sectors. More acquisitions within the residential area are likely to come, hinted CoStar officials.
“CoStar doesn’t buy one [company] and do what they were doing forever,” Florance told The Wall Street Journal. “We tend to acquire companies and integrate those companies together.”
CoStar is also reportedly among a group of firms currently bidding on CoreLogic, a large residential real estate data and analytics company.