The Real Deal New York

Could Amazon break into real estate by buying Redfin?

Redfin's "troves of data" would be major benefit
February 07, 2019 02:30PM

Redfin CEO Glenn Kelman overlaid on Jeff Bezos (Credit: Getty Images and Redfin)

Amazon has a history of breaking into new industries with a splashy buy, having disrupting the grocery business with the $13.7 billion acquisition of Whole Foods. Should the company do the same to real estate by buying online brokerage Redfin? One analyst thinks so.

Jack Micenko, a housing and consumer finance analyst at Susquehanna Financial Group, makes the case for such a move in a new report. Among the various benefits such a purchase would bring, Redfin’s “troves of data” is near the top of the list.

“If you are going to buy your way into real estate, I don’t see a better option than Redfin,” Micenko told Inman. Redfin’s data on consumers’ work history, wages, savings, real estate transactions, and relocation patterns would be a boon to the online retail giant, who could offer vast financial resources in return.

“Really both companies would be better together than they would be apart,” Micenko added. Both companies declined to comment, though Micenko says Redfin is “aware of his suggestion.”

The analyst also said that buying Redfin competitor Zillow would be a less ideal move for Amazon, because the company uses data differently and has entrenched the status quo around agent commission and agent leverage.

Redfin currently has a market capitalization of about $1.67 billion, more than 10 percent of which is owned by investment firm Vanguard Group.

Redfin CFO Chris Neilsen previously worked at Amazon for a decade, and the company hired Amazon economist Daryl Fairweather to head its data operations last fall.

Amazon has hinted at interest in the real industry in the past, teasing a “Hire a Realtor” feature on its website in 2017. The company also has a deal with Lennar, the country’s biggest homebuilder, to include Amazon Alexa in its new homes, and has invested in pre-fabricated home startup Plant Prefab. [Inman] — Kevin Sun