CoStar Group announced today that it is acquiring ForRent.com, adding it to a portfolio that already included Apartments.com, which it purchased in 2014 and Apartment Finder, which it purchased in 2015. The price tag on this purchase is $385 million, with $350 million in cash and the remainder in stock.
Landlords have listed apartments online for more than a decade, partly on sites developed by newspaper owners worried about their loss of traditional print ads. In 1998, a venture of the Times Mirror Co. , Tribune Co. and Washington Post Co. purchased the company that went on to build Apartments.com.
In recent years, large investors such as CoStar and Zillow began to make big bets on the business. Currently there are 46 million rental households, up from 35 million in 2004, according to CoStar.
Competitors also include RentPath Inc., which is owned by private equity giants TPG and Providence Equity Partners. Major players like Facebook Inc., Google Inc. and Craigslist also get an enormous amount of traffic from people looking for rental apartments.
The rental segment is now Zillow’s fastest-growing marketplace, according to remarks made by Chief Executive Spencer Rascoff during the company’s second quarter earnings call. He said the business grew 64% year over year in the second quarter.