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costargroup.com

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Portfolio Exits

1

Partners & Customers

10

About CoStar Group

CoStar Group (NASDAQ: CSGP) is a provider of commercial real estate information, analytics, and online marketplaces. Founded in 1987, CoStar conducts expansive, ongoing research to produce and maintain a comprehensive database of commercial real estate information. Its suite of online services enables clients to analyze, interpret, and gain insight into commercial property values, market conditions, and current availabilities.

CoStar Group Headquarter Location

1331 L Street, NW

Washington, DC, 20005,

United States

800-204-5960

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Expert Collections containing CoStar Group

Expert Collections are analyst-curated lists that highlight the companies you need to know in the most important technology spaces.

Find CoStar Group in 1 Expert Collection, including Real Estate Tech.

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Real Estate Tech

2,221 items

Startups in the space cover the residential and commercial real estate space with a focus on consumers. Categories include buying, selling and investing in real estate (iBuyers, marketplaces, investment/crowdfunding platforms), and also tenant experience, property management, et

CoStar Group Web Traffic

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Page Views per User (PVPU)
Page Views per Million (PVPM)
Reach per Million (RPM)
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Research containing CoStar Group

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CB Insights Intelligence Analysts have mentioned CoStar Group in 2 CB Insights research briefs, most recently on Dec 8, 2021.

Latest CoStar Group News

5 big challenges for CoStar in 2022

Dec 31, 2021

5 big challenges for CoStar in 2022 5 big challenges for CoStar in 2022 The commercial real estate juggernaut has set its sights on residential sales and faces a bumpy road against incumbents Zillow, Redfin and realtor.com From: Inman Connect Through December Inman will be digging into the real estate industry’s most prominent brokerages, iBuyers and paradigm-shifters to suss out  the biggest challenges each face in 2022 . Check back regularly in the days ahead. It was just over a year ago that commercial real estate juggernaut CoStar Group burst onto the residential real estate sales scene with a deal to acquire residential real estate search portal company Homesnap for $250 million in cash. Since then, CoStar’s high-profile acquisitions and biting comments from its CEO and chairman, Andy Florance, against rival Zillow have announced to the industry that CoStar is here to stay and ready to play. “Given CoStar’s breadth of operations, its proven track record, its aggressive approach, large market capitalization and the two promising residential real estate-focused companies in its stable, CoStar immediately has become a formidable player in the residential real estate sales space,” real estate consulting firm T3 Sixty declared in its 2022 Swanepoel Trends Report . But on the cusp of a new year, the company will have to contend with several challenges as it seeks to cement its place in a new vertical. Translating success in commercial real estate to residential sales Founded in 1987 by a 22-year-old Florance whose mom was a Realtor, CoStar has grown to a market cap of $30.94 billion with more than 4,700 employees in 15 countries. The company brought in $1.7 billion in revenue in 2020 and made $227.1 million in profit. According to its latest earnings report , the company projects 2021 revenue of $1.9 billion. Since its founding more than 30 years ago, CoStar has acquired 31 companies, most of them providers of commercial real estate information, data and analytics, according to the Swanepoel report. Its most notable acquisition is perhaps LoopNet, which the company purchased in 2011 and has grown to become something of a de facto national multiple listing service for commercial properties. CoStar’s 26 global brands run the real estate gamut, from commercial sales and rentals, business and franchise sales, land sales, multifamily rentals, hospitality, and residential sales. The company made its first foray into residential real estate with the acquisitions of Apartments.com in 2014 for $585 million and of Apartment Finder in 2015 for $170 million. CoStar has spent hundreds of millions of dollars marketing Apartments.com, particularly through national TV ads featuring actor Jeff Goldblum. In 2022, CoStar will start to see whether it can parley its dominance in the commercial real estate market to residential sales. Stefan Swanepoel | Photo credit: T3 Sixty “The company has used strategic acquisitions to achieve growth in its commercial and residential rental marketplaces, as well as investments in product development and massive media campaigns,” the Swanepoel report said. “Expect a similar playbook to be executed as CoStar expands its role in the residential sales segment.” CoStar began deploying that playbook last year with the Homesnap acquisition. Homesnap is an agent productivity, collaboration and marketing tool as well as a consumer portal with listing feeds from more than 240 MLSs with 90 percent listing coverage and more than 700,000 reported agent and broker subscribers, according to Swanepoel. “The acquisition of Homesnap will enable us to enter a new space and expand the total addressable markets in which we can compete,” Florance said at the time. With the addition of Homesnap to its portfolio, CoStar added “clients and information covering 90 percent of the estimated $27 trillion U.S. residential real estate market,” according to Florance, which nearly tripled the size of its addressable market. Andrew Florance (Photo courtesy of CoStar) “Over the past thirty years, CoStar has become the leading real estate technology platform by working in partnership with commercial real estate brokers to serve their needs for data, analytics and advertising exposure for their property listings,” Florance said. “Similarly, Homesnap works in very close partnership with residential agents to serve their needs for data, analytics and advertising exposure for their property listings.” “We will continue to differentiate our residential real estate portal and solutions by working solely to help agents market their listings and their brands, which is in sharp contrast to other portals that increasingly advertise on top of agent listings and offer brokerage services directly.” CoStar followed up the Homesnap deal by snapping up Houses.com and Homes.com in quick succession. CoStar’s goal with the Houses.com acquisition is to “develop a vibrant national marketplace for agents and owners to successfully sell homes without disenfranchising or disintermediating valuable real estate agents in the process,” the company said in January 2021. There is currently nothing on the site’s home page except a notice that the URL was acquired. In the spring, CoStar shelled out $156 million in cash for Homes.com. “The combination of Homes.com’s online portal and consumer traffic with Homesnap’s powerful mobile tools and highly effective agent marketing solutions has the potential to create a differentiated service that uniquely focuses on selling a house faster and at a better price, rather than just trying to take agent fees,” Florance said at the time. CoStar spent the early months of 2021 trying to buy real estate data and analytics behemoth CoreLogic — a deal that would have supercharged its entry into residential sales given its client base of more than 1.2 million agents across the U.S. and Canada and its status as the top MLS system vendor in the country. But the deal ultimately tanked  in early March. Even without that deal, CoStar will have its hands full integrating its new acquisitions into something that can outshine industry incumbents. Playing catch-up with rivals When CoStar bought Homesnap, it put itself in direct competition with current portal top dog Zillow as well as realtor.com and Redfin which also operate popular listing sites. Mike DelPrete “Homeowners want to advertise their biggest asset in the one place buyers will definitely look,” wrote Inman contributor Mike DelPrete in a column positing that CoStar is unlikely to dethrone Zillow in the portal wars. “Zillow is that place: From a traffic standpoint, Zillow has a reach  23 times larger than Homes.com, making it exponentially more effective and valuable. “Attempting to directly compete with market-leading real estate portals is an incredibly difficult proposition, with success unlikely.” Florance has explicitly said that CoStar and Zillow aren’t rivals, arguing instead that Zillow is a competitor to real estate agents — whom just happen to be CoStar’s intended customers. Florance took aim at Zillow immediately after announcing the Homesnap acquisition, calling the Zillow business model of selling ads on listings “unethical” in an exclusive interview with Inman publisher Brad Inman. Can you imagine allowing Realtors to put their yards signs on your listing? Florance argued. In that interview, Florance promised to spend billions on digital residential real estate but said his goal was not to emulate Zillow. Everyone thinks that “we want to replace Zillow — we don’t,” Florance said. “We will not create a billion dollar product putting other people’s names on the wrong listings. We will never create a brokerage firm, hiring brokers. And we will never be buying houses and flipping them.” He went on to say, “I have a very clear vision of what we want to do that no one else is doing. People have failed to leverage the power of the Internet to help agents and homeowners to sell their homes and to help agents to do more deals.” Florance made similar acerbic comments after CoStar  announced in October that Homesnap is working with the Real Estate Board of New York (REBNY) to launch Citysnap, a portal serving New York City that will compete directly with Zillow’s New York offering StreetEasy. Citysnap is slated to launch in second-quarter 2022, will be free for agents to use, and follow a “your listing, your lead” philosophy designed to drive buyer leads to listing agents. During a call with investors, Florance said that a number of StreetEasy’s practices are unpopular among real estate agents, including its costs and the way the platform displays agents’ names on listings. “Blackmail is too strong a word for it,” Florance said , quipping that a better word might be “Zillow-mail.” To make money, Citysnap will offer a promoted listings option so that agents can “can buy preferred placement to increase exposure,” Florance said. Agents can also subscribe to monthly services such as marketing and concierge offerings. “We don’t really have to do anything like what StreetEasy is doing, which is so unpopular, in order to be financially successful,” Florance said during the call . As Inman reporter Jim Dalrymple has noted, StreetEasy and Citysnap are likely to represent a kind of proxy battle between parent firms Zillow and CoStar. Therefore, Citysnap will likely “serve as a test case to see if CoStar — or anyone for that matter — can seriously take on the largest portal in the world. It will also test the competitive viability of a portal that is explicitly built around the idea of benefiting listing agents.” Homesnap has so far failed to compete with the likes of Zillow or Redfin for consumer eyeballs. The company’s portal is built as a joint venture with Broker Public Portal (BPP), which is a project backed by real estate brokerages and real estate trade associations through their MLSs. Victor Lund Still, real estate consultant Victor Lund of WAV Group, which counts the BPP as a client, told Inman, “CoStar is in a great position for 2022 to become the leading non-brokerage portal in America” because of its friendliness to agents. “Realtor.com, Zillow, and Trulia have followed the Redfin route and become brokerages — relying on referral commissions of over 30 percent for leads generated,” he said via email. “This positions CoStar very well for success which is strongly bolstered by their joint venture with the Broker Public Portal. Listing firms and agents will continue to get leads for free on their listings and Homesnap as a member benefit from their MLS. Buyer’s agents can leverage Homesnap as a buyer listing alert tool and leverage the many other features such as safe showings and showing management.” Landing on a solid business model Coming up with a profitable business model for a real estate listing site has always been tricky, both in terms of viability and potential for controversy. CoStar will have its work cut out for itself in trying to skirt those particular landmines. Florance has clearly stated what the company will not do, mainly by comparing itself to Zillow. During Inman Connect Las Vegas this past summer, Florance, without explicitly naming any company, implied that Zillow “hijacks” agents’ listings — even though, as real estate tech exec Greg Robertson highlighted later that day , every broker or agent that gets an Internet Data Exchange (IDX) feed from an MLS displays listings that are not their own and advertises someone other than the listing broker next to them, usually themselves. Florance also compared an unnamed company — which, again, was pretty obviously supposed to be Zillow — to the mafia for charging a fee if an agent doesn’t want a competing agent next to their listing. “We see clear opportunities,” Florance argued, “to provide value in the residential industry that’s not there right now.” In an interview with Inman, Florance committed to never letting competing agents advertise on a residential listing broker’s digital listing: “I promise. Your listing, your lead.” Florance has previously said he believes that the CoStar-LoopNet business model for commercial real estate will work well in residential. Commercial brokers can upload listings for free on LoopNet and then pay for tools, a dashboard, digital marketing and other services to promote and monitor listings. “On LoopNet, if the agent wants to market their properties, we charge for promoting their listings,” he said. According to Swanepoel’s report, CoStar is “a big believer in the subscription model” because it brings stable, recurring revenue. “In each of its marketplaces, CoStar Group has also introduced tiered advertising packages that provide additional exposure and features for listings, sold on a subscription basis,” the report said. “As the company has scaled into adjacent industries, it has also integrated distinct services across its offerings, as it has done with the auction platform Ten-X. Finally, the company builds analytics products and software that helps customers perform due diligence, analyze investments, determine risk and much more.” Because so many sites already offer a comprehensive set of listings in a market, CoStar will likely not charge for MLS listings to be displayed on its sites, according to the report. The Swanepoel report notes that, according to CoStar, “no MLS, broker or agents” will have to pay for listings to populate on “its network of real estate sales sites indefinitely. The company, as it has done for Apartments.com and its other marketplaces, will likely offer significant listing enhancements and other services such as done-for-you marketing collateral and reporting and metrics to entice advertisers.” CoStar will likely offer similar listing advertising products as on LoopNet and Apartments.com, offering “higher exposure, professional photography and tours at higher price levels,” the report added. “CoStar Group believes that the residential sales side of its business in Homes.com and Homesnap could become its biggest revenue-generator within seven years, ahead of Apartments.com and CoStar.” Winning over agents DelPrete has previously pointed out that challengers have thrown hundreds of millions of dollars against the top portals for years “with no effect on their dominant position whatsoever .” “Past evidence shows that it is exceedingly unlikely that this new batch of challengers will dethrone the top portals,” he wrote. “The smart challengers understand this game and how it’s played, not trying to overtake the leaders, but instead building a viable business on its own merits.” Zillow only works with about 5 percent of agents in the U.S. who pay Zillow for leads, DelPrete noted — “leaving a large addressable market for CoStar to tap into” and grow a viable business from without having to actually unseat the giant. “The narrative that CoStar is attempting to compete directly with Zillow is simply that — a story designed to rile up agents and generate buzz,” DelPrete wrote. “The actual battle isn’t about consumer eyeballs; it’s about a real estate agent’s wallet.” With that lens, it’s no surprise that Florance’s public remarks have attempted to draw a stark contrast between what his company is trying to build for the residential real estate industry, compared to what exists currently. “The company will focus on developing tools, software and the portal itself to help listing brokers and agents find buyers with greater certainty and speed, sell their listings faster, and also support buyer’s agents through productivity, collaboration and marketing tools,” the Swanepoel report said. “It wants to monetize the exposure it provides agents through advertising and the connections it can encourage through its concierge service. The company believes the industry and agents will like and support this model better, and that support will help boost the marketplace’s presence and usage.” According to Lund, CoStar’s challenges in 2022 will be to earn the trust of MLSs and brokers nationwide and “effectively harness the success of the BPP-Homesnap collaboration to offer a better consumer experience, and a more competitive solution to meet agent and broker needs.” “Those challenges are different from competitors’ challenges because CoStar is starting from a position of trust — as a JV partner — instead of an adversarial position as a competitor to brokers everywhere.” To succeed, CoStar will have to “deeply embrace” Homesnap’s values of being a partner supporting the success of agents, brokers and MLSs, Lund added. “We believe it will successfully do so because it has a long-standing reputation, and has built its entire business on such values, as a ‘Co-Star’ with agents and brokers rather than a disruptor.” CoStar makes its money through fees, and some corners of the industry have criticized the company for raising fees after it gains significant market share. Inman has previously questioned Florance directly about the charge that CoStar takes over a marketplace and then hikes fees on its customers. Florance said the company hasn’t “materially” raised any fees and all of its price increases have been “in-line with inflation for 20 years.” Winning over consumers If there’s anything that the industry has learned from Zillow, it is if consumers want agents to use a tool, agents will use that tool, whether begrudgingly or enthusiastically or indifferently. CoStar has yet to make much of a pitch to consumers directly in this space, though that may change if the company rolls out an “Apartments.com”-like marketing campaign for Homes.com, Homesnap or Houses.com. When Florance does speak of consumers, it’s usually in conjunction with their relationship with agents and in contrast to agents’ relationships with other portals. “I think that it is possible to build a business model that meets the needs of the consumer and actually does a better job of meeting the needs of the consumer,” he said at ICLV. “You can build a business model where your client, the person that writes you a check, is happy and you take care of the consumer. To do a business model that annoys the hell out of the person that writes you a check is taking a shit where you eat. You shouldn’t do it.” He doesn’t fault the user interfaces offered by Zillow and other rivals, noting “the UXs are good out there,” but rather their disruptive elements. “It’s more about looking at how you’re engaging all the constituencies and keeping them aligned and being considerate to the whole ecosystem and not trying to change it,” he said. Not unlike high-profile brokerage Compass, CoStar is betting its success on strengthening the relationship between agents and consumers. The company is building a collaborative, integrated platform “to manage their listings, communicate with leads and clients, and execute digital marketing,” according to the Swanepoel report. In January, fresh from acquiring Homesnap, Florance told Inman that what CoStar wants to achieve in the real estate industry is the idea of a real estate agent directly marketing a specific listing, rather than just hoping to have a client referred to them. And for buying clients, he wants both the real estate agent and the client to be in sync throughout the entire search process. “We’re not trying to own and monetize that relationship, we’re going to strengthen it and we’re doing that for a profit motive,” Florance added. “We’re doing that because I think 1 million Realtors would like that better than the current situation.” Florance gave no concrete timeframe for the rollout of CoStar’s residential real estate platform, but did preview what he hoped it would look like in January 2022. “A year from now, you will see something that is an excellent search experience that allows the residential agent to be with their homebuyer on the journey as they look for a home and communicate effectively with the homebuyer and a clear delineation between a model that is supporting the existing relationships and a model that seems to ‘uberize’ the relationships,” Florance said. Whether that platform comes to pass and whether it will succeed in winning over consumers and their agents remains to be seen. CoStar declined to comment for this story.

CoStar Group Portfolio Exits

1 Portfolio Exit

CoStar Group has 1 portfolio exit. Their latest portfolio exit was Resolve Technologies on April 28, 2021.

Date

Exit

Companies

Valuation
Valuations are submitted by companies, mined from state filings or news, provided by VentureSource, or based on a comparables valuation model.

Acquirer

Sources

4/28/2021

Acq - Fin

1

Date

4/28/2021

Exit

Acq - Fin

Companies

Valuation

Acquirer

Sources

1

CoStar Group Acquisitions

19 Acquisitions

CoStar Group acquired 19 companies. Their latest acquisition was BureauxLocaux on October 01, 2021.

Date

Investment Stage

Companies

Valuation
Valuations are submitted by companies, mined from state filings or news, provided by VentureSource, or based on a comparables valuation model.

Total Funding

Note

Sources

10/1/2021

$99M

Acquired

1

4/14/2021

Series B

$99M

$53.4M

Acquired - II

4

11/23/2020

Series B

$99M

$21.5M

Acquired

5

10/27/2020

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$99M

Subscribe to see more

10

5/14/2020

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$99M

Subscribe to see more

10

Date

10/1/2021

4/14/2021

11/23/2020

10/27/2020

5/14/2020

Investment Stage

Series B

Series B

Companies

Subscribe to see more

Subscribe to see more

Valuation

$99M

$99M

$99M

$99M

$99M

Total Funding

$53.4M

$21.5M

Note

Acquired

Acquired - II

Acquired

Subscribe to see more

Subscribe to see more

Sources

1

4

5

10

10

CoStar Group Partners & Customers

10 Partners and customers

CoStar Group has 10 strategic partners and customers. CoStar Group recently partnered with REBNY on October 10, 2021.

Date

Type

Business Partner

Country

News Snippet

Sources

10/14/2021

Partner

REBNY

United States

1

8/26/2020

Partner

Richmond Public Schools

United States

1

5/1/2020

Partner

VCU Health System

United States

1

7/29/2019

Client

Marcus & Millichap

United States

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Subscribe to see more

10

4/23/2019

Client

Jones Lang Lasalle

United States

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10

Date

10/14/2021

8/26/2020

5/1/2020

7/29/2019

4/23/2019

Type

Partner

Partner

Partner

Client

Client

Business Partner

REBNY

Richmond Public Schools

VCU Health System

Marcus & Millichap

Jones Lang Lasalle

Country

United States

United States

United States

United States

United States

News Snippet

Subscribe to see more

Subscribe to see more

Subscribe to see more

Subscribe to see more

Sources

1

1

1

10

10

CoStar Group Team

11 Team Members

CoStar Group has 11 team members, including current Founder, Chief Executive Officer, Andrew C Florance.

Name

Work History

Title

Status

Andrew C Florance

Founder, Chief Executive Officer

Current

Philip Damiano

President

Current

Eric Brodnax

President

Former

Richard Burke

President

Former

Brian Radecki

Chief Financial Officer

Former

Name

Andrew C Florance

Philip Damiano

Eric Brodnax

Richard Burke

Brian Radecki

Work History

Title

Founder, Chief Executive Officer

President

President

President

Chief Financial Officer

Status

Current

Current

Former

Former

Former

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