CoStar appears to be looking to up its residential real estate game. The commercial real estate giant is in talks to acquire Realtor.com parent firm Move Inc. from News Corp., according to a report on Tuesday from Reuters. The report cited three anonymous sources and confirmation of the news from News Corp., but noted that there is no guarantee a deal will actually go through.
The Rupert Murdoch helmed firm purchased Move in 2014 for $950 million. CoStar, which has a market cap of $30 billion, larger than rival Zillow’s, is in talks to acquire Move in a deal that values the portal at $3 billion.
“To me it seems a little low,” Spencer Rascoff, the co-founder of Zillow, said Wednesday morning on the Inman Connect New York stage. “News Corp. bought it almost 10 years ago for roughly a $1 billion and it feels to me that it has more than tripled in value over that period of time.”
As searching for homes online has become standard fare, Realtor.com has become the second largest real estate portal behind Zillow, with 90 million unique monthly visitors.
“It makes total, logical sense,” Pete Flint, the managing partner at NFX, told Inman attendees Wednesday morning. “CoStar has very clear designs on residential real estate. Realtor.com is a mainstay. It has amazing content, and it has a big brand and from CoStar’s perspective, this acquisition should happen. This feels like the worst time to be selling a company — tech is down, real estate is down — but if the prices if fair then it makes sense.”
The acquisition of Realtor.com, which announced layoffs in late 2022, would be CoStar’s third foray into residential real estate, as it acquired portal maker Homesnap in 2020 for $250 million and Homes.com in 2021 for $156 million.
This news comes after Murdoch proposed reuniting Fox Corporation and News Corp. in October 2022, roughly 10 years after he split the two firms.
In a note to investors, analysts at Keefe Bruyette Woods said the immediate financial impact of a deal for Realtor.com “is much less relevant, in our view, than the transformational strategic value that Realtor.com would bring to CoStar’s residential marketplace strategy under Homes.com, where one of the key uncertainties has been the company’s ability to build consumer traffic.”
Said KBW’s Ryan Tomasello, “Realtor.com’s strong brand awareness and nearly 90mn monthly unique visitors (>10x CoStar’s existing residential traffic) would accelerate CoStar’s residential strategy by numerous years, catapulting the company to the #2 residential portal spot behind Zillow. We believe CoStar would ultimately fold the Realtor.com brand under CoStar’s flagship Homes.com portal.”