The U.S. real estate giant CoStar has released its results for the third quarter of the financial year 2022. Highlights of the company's performance for the three months that ended September 30th include:
Washington-based CoStar is one of the largest real estate companies in the world and is the largest player in the U.S. in terms of commercial property data and marketplaces. The company reports six business segments which are:
The latest quarter of growth was led by CoStar's multi-family segment with CoStar CEO Andy Florance singling out the division's flagship rentals portal Apartments.com in comments made to investors.
“Apartments.com sales continue to accelerate. Our Apartments.com sales team delivered record sales in September, bringing our net new bookings to $90 million on a year-to-date basis in 2022, an increase of 192% compared to the same period of 2021. Revenue growth for Apartments.com accelerated to 11% in the third quarter, and we now expect revenue growth of 16% in the fourth quarter of 2022. Revenue growth for CoStar was even stronger with a 17% increase in the third quarter 2022 over third quarter 2021 on a constant currency basis.”
In 2021 CoStar made the bold decision to move into the residential real estate portal game with the acquisition of Homes.com. and has been developing the portal and building put content around it ever since.
The portal has been in development since then with Florance taking every opportunity to criticise the model of the portal's future competitor Zillow.
CoStar's residential play is still in its infancy and not yet being heavily marketed. Florance said on an investor call that the marketing would begin in earnest next year after CoStar has improved the functionality of Homes.com. For now, the segment's revenues are stable at around $20 million per quarter with the firm pleased that the required investment levels are below initial estimates.
The segment's proposed business model may have led to CoStar's split with the Broker Public Portal project earlier this month. However, CoStar may well make more acquisitions in the residential space and is in a great position to do so with $4.78 billion in cash in reserve. On an investor call, Florance said that he is spending a lot of his time looking into potential targets with the economic climate putting pressure on many companies in U.S. real estate.