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RentPath terminates acquisition agreement with CoStar

Merger would hurt customers, FTC alleges

RentPath announced Wednesday that it has terminated an agreement to be acquired by CoStar Group following the Federal Trade Commission’s (FTC) decision to sue to block the transaction.

The FTC had argued that the $588 million acquisition would be harm customers because RentPath presents a strong competitive alternative to CoStar in the multifamily space, and the deal would effectively eliminate price competition.

Daniel Francis, deputy director of the FTC’s Bureau of Competition, defended the antitrust lawsuit, stating that CoStar and RentPath’s rivalry kept advertising rates on their platform low for customers.

“Renters have come to depend on the convenience of online search sites to find available apartments that meet their needs and budget,” Francis said. “CoStar and RentPath operate several of the most popular sites, and their aggressive, head-to-head competition has kept advertising rates low while offering consumers a convenient, data-rich tool for finding an apartment. This acquisition will eliminate price and quality competition that benefits both renters and property managers.”

According to the complaint, 70% of U.S. apartment complexes with 200 or more units, and approximately 50% of U.S. apartment buildings with 100 to 199 units, advertise on internet listing services operated by either CoStar, or RentPath, or both.


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RentPath, which is owned by TPG Capital and Providence Equity Partners LLC, had been attempting to restructure more than $650 million of debt before CoStar began the process to acquire the company as a stalking horse bidder in early 2020.

In its statement on Wednesday, RentPath said the chapter 11 plan was still supported by its lenders.

“[RentPath] believes termination of the agreement is in the best interests of its customers, employees and all of its stakeholders,” the company wrote in a press release.

CoStar, easily the largest player in the commercial data space with a market cap of roughly $37 billion, has faced antitrust lawsuits before. After it acquired LoopNet for $860 million in 2012, the FTC placed conditions on the merger, forcing CoStar to sell the asset Xceligent. A few years later, CoStar would force Xceligent out of business through a combination of hardball legal tactics.

CoStar, led by Andy Florance, has been on an acquisitions tear over the last few years, and has looked to compete with other real estate data behemoths in new markets.

CoStar recently bought residential listings platform HomeSnap for $250 million, a deal that did pass the FTC’s smell test. The deal for HomeSnap positions CoStar to take on Zillow‘s StreetEasy in New York City. The Real Estate Board of New York is said to be working on a consumer-facing portal that’s backed by HomeSnap.

The addition of Homesnap will increase the number of brokers and active agents on CoStar’s platforms from approximately 100,000 to over 400,000, the company said. The number of property listings across CoStar’s brands will also double, from about 1.35 million to over 2.6 million.

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