WASHINGTON, D.C. — CoStar Group Inc. (NASDAQ: CSGP) has agreed to purchase Ten-X for $190 million. The all-cash deal is expected to close in the third quarter of this year.
Irvine, Calif.-based Ten-X was launched in 2009 with the goal of providing a digital platform to complete commercial real estate transactions during the Great Recession. Since its founding, nearly $24 billion worth of commercial real estate transactions have been completed on the site. Companies such as Fannie Mae, Bank of America, JP Morgan Chase, Blackstone, Starwood, BlackRock, Capital One, MetLife, LNR, UBS and PNC have used the website to complete transactions.
Andrew Florance, CEO, CoStar Group Inc.
CoStar hopes the acquisition will position the combined company as a major player in the distressed commercial property market that COVID-19 is expected to leave in its wake.
“We believe that the volume of distressed properties coming to market will surge and that this combined platform will support the market’s recovery,” says CoStar CEO Andrew Florance regarding the acquisition.
Steve Jacobs, CEO, Ten-X
Echoing Florance’s sentiment, Ten-X CEO Steve Jacobs says, “Just like CoStar Group, we are focused on driving volume and efficiency and have devoted ourselves to addressing the massive, untapped demand for digital commercial real estate solutions. We see significant demand for a one-stop shop platform that provides solutions across the entire transaction continuum.”
Washington, D.C.-based CoStar Group operates commercial real estate transaction sites CoStar.com and LoopNet.com, which combined to have 10 million visitors in April. After the acquisition, CoStar Group plans to integrate the Ten-X platform into both LoopNet and CoStar.
Scott Wheeler, CoStar chief financial officer, says that even though the COVID-19 pandemic continues to impact the U.S. and global economies, he believes there could be a spike in sales later in the year.
“Although we expect a certain amount of revenue disruption from the global pandemic, I am optimistic that transaction volumes could increase materially later in the year as was the case following the last recession,” says Wheeler.
CoStar’s stock price closed Wednesday at $612.40 per share, up from $503.88 per share a year ago.
— Alex Tostado