Jeffrey MacMillan/FOR THE WASHINGTON POST - Andrew Florance, chief executive of CoStar Group.
District-based CoStar Group announced Monday that it had acquired the online apartment search company Apartments.com for $585 million.
CoStar is a top provider of data and information on commercial real estate in the United States and Europe through subscription-based Web sites.
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Apartments.com, previously owned by Chicago-based Classified Ventures, LLC, will give CoStar insight into the county’s growing $2 trillion apartment rental industry.
In the transaction CoStar will also acquire the Web sites ApartmentHomeLiving.com and RentalHomesPlus.com. Last year the three sites collectively generated 114 million visits and an average of 7 million unique monthly visitors, according to CoStar. They had revenue of approximately $86 million.
“This was a very thorough process, and we are confident that the sale to CoStar will allow Apartments.com to continue to grow and flourish,” said Dan Jauernig, chief executive of Classified Ventures, in a statement. “CoStar has demonstrated an understanding of the value of Apartments.com and a commitment to its growth. We look forward to working with them to consummate the sale.”
Prominent newspaper companies were among the owners of Apartments.com. Graham Holdings, the former parent of The Washington Post, owned a 16.5 percent interest in Apartments.com and said it expected to receive about $95 million at closing. The publisher of USA Today, Gannett, owned a 26.9 percent interest in Apartments.com and reported that it expected to receive approximately $155 million. Other owners included the Tribune Co. and the McClatchy Co.
The deal follows CoStar’s $860 million acquisition of LoopNet, the commercial real estate industry’s most heavily trafficked site. That deal closed in the spring of 2012. Since the LoopNet deal, CoStar’s stock price has been on the rise, starting at $72 the day after the deal closed and spending Monday morning trading around $200 per share.
Andrew C. Florance, CoStar founder and chief executive, issued a statement saying there were similarities between CoStar’s two newest businesses.
“In much the same way LoopNet revolutionized how owners and brokers market the commercial real estate sectors of office, industrial and retail, Apartments has transformed the way owners and property managers market their commercial real estate’s apartment buildings, moving them from the classified ads section of Classified Ventures owners’ newspapers to more effective online advertising,” he said in a statement.
Founded in 1987, CoStar now has more 8 million unique monthly visitors online and a staff of more than 2,000 people in the United States, United Kingdom and France.
The boards of both CoStar and Classified Ventures approved the deal unanimously and it is expected to close in the second quarter of this year.
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