FTC approves CoStar’s $250M Homesnap acquisition

Regulators looking to block CoStar’s $588M acquisition of RentPath

CoStar’s Andrew Florance and Homesnap’s John Mazur (CoStart; LinkedIn)
CoStar’s Andrew Florance and Homesnap’s John Mazur (CoStart; LinkedIn)
CoStar’s Andrew Florance and Homesnap’s John Mazur (CoStart; LinkedIn)

CoStar’s Andrew Florance and Homesnap’s John Mazur (CoStart; LinkedIn)

CoStar Group got federal regulators’ stamp of approval to buy residential tech provider Homesnap for $250 million, but the data giant still faces scrutiny over another acquisition that would strengthen its grip on residential listings.

CoStar said the Federal Trade Commission cleared its purchase of Homesnap after the two companies submitted the proposed merger last month. Homesnap works with multiple listing services around the country, acting as a front-end portal for agents.

In a statement, CEO Andy Florance praised the quick review and said it would allow coStar to “close this transaction quickly.”

Days after CoStar and Homesnap announced their deal last month, the FTC sued to block CoStar’s $588 million purchase of rental listing platform RentPath, which operates Rent.com and ForRent.com and filed for bankruptcy last year. In an administrative complaint, it said the deal would give CoStar too much control since it already operates Apartments.com, ApartmentFinder.com and ForRent.com.

CoStar countered that the FTC was “wrong in its assessment.”

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The Homesnap acquisition is another way for CoStar to compete in the residential real estate market. It’s made $2 billion worth of acquisitions since 2014, including Apartments.com ($585 million), ApartmentFinder ($170 million), ForRent ($385 million) and Cozy Services ($68 million).

With 150 employees, it is on track to generate $40 million in revenue this year, up 45 percent year over year. More than 1.1 million agents use its free product, which it claims represents 90 percent of licensed U.S. agents.

“With the new addition of clients and information … we are almost tripling the size of our addressable markets,” Florence said in November.

In New York City, which does not have an MLS, Homesnap recently struck a deal with the Real Estate Board of New York to build out a public-facing portal for residential listings.

Earlier this week, REBNY sent a cease-and-desist letter to software developer Michael Gabriel and data partner RealPlus over a new listings platform they planned to launch called homes.nyc. The trade group said the two improperly used residential listings data from REBNY members.