After the FTC strengthened the CoStar Group’s offer to purchase RentPath, Redfin bought the contested operator of the rental portals Rent.com and ApartmentGuide.com. The move marks Redfin’s entry into the property rental market.
Redfin announced early Friday morning that it would acquire RentPath for $ 608 million. This signals the entry of Redfin into the real estate rental market. The deal comes two months after the Federal Trade Commission blocked CoStar’s attempted acquisition of RentPath.
“Once approved, this acquisition will merge a leading home buying location with a leading home rental location, so anyone trying to get a full view of their options in a statement announced the news , Redfin CEO Glenn Kelman.
The acquisition is in part a move aimed at boosting traffic to Redfin’s online real estate portal, which has the largest audience for any brokerage website. RentPath – which owns the consumer-facing rental portals Rent.com and ApartmentGuide.com – can attract a younger audience of consumers who are not yet looking for a home.
“Redfin’s brand is growing,” wrote Kelman. “We’ll come up higher on Internet research in Phoenix homes or real estate in St. Louis.”
The Redfin acquisition requires FTC approval, but the company is unlikely to face the same hurdle as CoStar’s offer for the company as Redfin is not currently present in the rental space. The takeover also requires the approval of the bankruptcy court.
“Redfin’s rapid traffic growth in 2020 has already changed our outlook and provided us with a powerful channel to meet customers and market offers directly to buyers,” added Kelman. “Together with RentPath, which increased traffic by more than 25% in 2020, Redfin aims to compete with the largest portals on every front for every visitor. It’s going to be a wild battle. “
Redfin – which operates more on the employee model than the independent contractor model that most of the real estate industry operates on – has no immediate plans to hire landlords in 2021, according to Kelman.
The goal for Redfin in the near future is to get RentPath’s 250-strong sales force to “sign thousands of new homes one at a time,” Kelman said.
With the immediate goal of building its audience and attracting new customers, Redfin has no plans to release financial projections until at least May.
The Redfin acquisition follows the FTC, which filed a lawsuit in late 2020 alleging that CoStar’s acquisition of RentPath would increase concentration and eliminate competition in the rental listing space.
The acquisition had taken nearly a year before the FTC filed an administrative complaint. CoStar, which operates competing websites Apartments.com, ApartmentFinder.com and ForRent.com, announced in February that it would buy RentPath for $ 587.5 million. The acquisition came immediately after RentPath filed for bankruptcy, after not restructuring its $ 650 million debt.