CoStar Group, which entered the rental game last March with its acquisition of Apartments.com, is looking to snag another large rental portal, Apartment Finder, with a $170 million agreement to acquire Network Communications Inc.
CoStar, which also owns the colossal commercial listing site LoopNet, expects the acquisition to close within 90 days.
Apartment Finder, Network Communications‘ flagship product, captured 0.59 percent of all visits to real estate sites in March, making it the seventh most popular rental site that month, according to Experian Marketing Services. In fiscal year 2015, CoStar noted Apartment Finder revenue was approximately $79 million.
Top rentals sites by real estate Web market share, March 2015
Source: Experian Marketing Services *Includes traffic from both desktop and mobile devices, but excludes mobile app traffic.
Like Zillow Group houses both Zillow and Trulia, CoStar said it plans to continue operating Apartment Finder and Apartments.com as separate brands but will power the two with one listing database. It anticipates unifying the two by the end of the year.
By maintaining two brands, CoStar said it can offer landlords and property managers more exposure for their listings as well as allow them to more precisely and effectively target leads. Apartment Finders’ 400 employees will also be folded into the firm.
CoStar joins its big rental competitors in creating a family of rental sites: Zillow Group owns and operates Zillow, Trulia and the rentals-focused site HotPads; and RentPath Inc. runs Apartment Guide, Rent.com, Rentals.com and the up-and-coming rental site Lovely.
Competition in the space is heating up as residential real estate enters the digital age. Like the huge players above, startups like Zumper, RadPad and Cozy are looking to unseat the legacy rentals king, Craigslist. But the classifieds leviathon, itself, apparently is not ready to go gently into that good night, either.
CoStar paid $585 for Apartments.com and is pouring $100 million of cash into marketing the site this year that features a national TV campaign with actor Jeff Goldblum.
“Over the past year we have transformed Apartments.com into one of the fastest growing industry websites, and we are excited to do the same for Apartment Finder,” said CoStar Group Founder and CEO Andrew Florance in a statement.
He’s right. When CoStar acquired Apartments.com in March 2014, Experian data shows the site captured 1.04 percent of all traffic to real estate sites from desktop computers and was the third most popular rental site. This March it was the top-ranked rental site and has more than doubled its Web market share.
CoStar also put Apartments.com’s listings database on steroids and hopes to do the same for Apartment Finder. At the time of acquisition, Apartment.com had 18,200 listings and now has approximately 550,000, CoStar shared. Apartment Finder currently has approximately 13,400 rental listings, the firm noted.
CoStar is “dedicated to building and growing commercial real estate’s premier online apartment platform and strengthening CoStar’s leadership position in the $2 trillion U.S. multifamily asset class,” Florance added.
Email Paul Hagey.