CoStar, the commercial real estate tech company (not to be confused with the astrology app) purchased Homes.com for $156 million last week. Homes.com was a property of Dominion Enterprises, one of Downtown Norfolk’s long-time business anchors. That purchase price is an absolutely huge number for a Hampton Roads business acquisition. CoStar is worth $36.8 billion and is publicly traded, but it’s not exactly an unfamiliar mega-corporation.CoStar is Washington D.C. based, has a large presence in Richmond, and has an office in Norfolk. You might think of them Zillow for commercial real estate – but that’s only scratching the surface. So why did they buy Homes.com?
Landmark Media Enterprise has been in Norfolk for over a century in 1907. It owned many newspapers through the years – including the Virginian-Pilot. The founder’s name, Slover, still graces one of Norfolk’s finest gems – the Slover Library. Fast forward to 1976 when Homes.com got its start – way before ‘dot com’ was even a thing. It was known as Homes & Land Magazine and focused on print media. It fit nicely in the Landmark Media Enterprises portfolio of print media products like newspapers and classifieds. Over the years, they made a slow but resilient pivot to the internet. The business made it through the transition from print to the web to mobile, when many similar businesses did not. Today, Homes.com employs hundreds of web developers, software engineers, marketers, and more in Downtown Norfolk.
Back in 2017,one of Homes.com’s sister publications,Rent.com, was also purchased by CoStar. So maybe it’s not such an odd purchase after all. But does this mean we’ll see an exodus of workers from Downtown? Likely not, as this acquisition doesn’t seem rooted in eliminating competition, but rather market expansion. Plus, CoStar likes Norfolk enough to have an office there.
CoStar has long been thought of as a potential future competitor to Zillow, and their recent Homes.com purchase really helps to solidify that. Homes.com was just bought outright for $156 million, and Zillow has a market cap of around $34 billion. CoStar has also picked up other businesses that could be Zillow competitors including Apartments.com, Apartment Finder, Homesnap, Loopnet, and Cozy. It’s probably not fair to say that CoStar is looking to take on Zillow directly, but they’re playing in close quarters. This battle of tech behemoths may have just escalated on Granby Street.