CoStar Seals $588M RentPath Acquisition in Bankruptcy Deal—Here's What It Means for the Rental Market

The Acquisition: Numbers and Timeline

CoStar Group has finalized plans to acquire RentPath for $588 million in cash as part of RentPath’s Chapter 11 bankruptcy restructuring. The transaction, announced on February 11, 2020, represents a significant consolidation in the digital real estate marketing sector and marks CoStar’s aggressive expansion into the residential rental space.

The deal encompasses RentPath’s entire portfolio of digital platforms, which collectively attracted over 21 million monthly visits and nearly 9 million unique monthly visitors in 2019, according to comScore data. These properties include Rent.com, ApartmentGuide.com, Rentals.com, and Lovely.com—each serving distinct segments of the rental market.

Understanding RentPath’s Struggles and Restructuring

RentPath, headquartered in Atlanta with approximately 770 employees, faced mounting challenges that led to its bankruptcy filing. The company’s 2019 financials paint a telling picture: revenue stood at approximately $227 million, while adjusted EBITDA reached approximately $47 million. More concerning, revenue had declined roughly 9% year-over-year, and adjusted EBITDA dropped approximately 24% over the same period.

CoStar CEO Andrew C. Florance attributed RentPath’s decline to structural challenges facing legacy digital businesses. “Print directories and traditional publishing models have struggled to transition into profitable digital enterprises,” Florance noted. The core issue: RentPath carried excessive debt that constrained investment in brand building and traffic acquisition from search engines. As Google advertising costs soared, the company lacked the financial capacity to compete effectively, creating a widening competitive gap.

Strategic Rationale: The Untapped Rental Market

CoStar’s acquisition strategy reveals a calculated focus on underserved market segments. “There exists significant untapped potential to serve landlords traditionally overlooked by major online apartment marketplaces,” Florance explained. Large platforms typically concentrate on properties exceeding 100 units, leaving independent and smaller multifamily operators underrepresented. Premium domain names like Rent.com serve as ideal vehicles for capturing this fragmented audience.

The integration with CoStar’s existing Apartments.com network—which generated 842 million visits in the prior year—positions the combined entity to leverage substantial existing traffic and cross-promote services. CoStar’s competitive advantage lies in audience scale: over 51 million unique monthly visitors across all CoStar properties in the third quarter of 2019.

Talent Integration and Growth Prospects

A critical element of the acquisition involves RentPath careers and workforce integration. The company’s approximately 770 employees represent experienced professionals in residential real estate marketing, customer acquisition, and platform operations. CoStar’s leadership emphasized that these talent pools will contribute across multiple marketplace divisions, not solely within the RentPath portfolio.

CFO Scott Wheeler projected that post-integration, the acquisition would “add significant scale to our Apartments.com business and prove highly accretive to CoStar earnings once fully integrated.” The synergy thesis hinges on operational consolidation, eliminating redundancies while preserving specialized expertise that RentPath has cultivated over three decades.

The 30-Year Legacy and Multifamily Relationships

RentPath brings a three-decade track record of serving the multifamily industry. The network maintained advertising relationships with approximately 28,000 properties at the time of bankruptcy filing, representing substantial customer stickiness despite financial pressures. This established client base provides CoStar with immediate revenue retention and cross-selling opportunities across its broader marketplace ecosystem.

Regulatory Path Forward and Expected Timing

The transaction remains subject to bankruptcy court approval and regulatory scrutiny. CoStar management scheduled a conference call for 8:00 AM EST on February 12, 2020, to discuss acquisition details and answer investor questions. The company indicated it would provide 2020 revenue and earnings guidance in fourth-quarter financial results (expected February 25, 2020), but transaction-specific forward guidance would follow later pending closing.

Assuming regulatory clearance, RentPath operations are expected to continue in ordinary course during the interim period, minimizing business disruption to existing clients and employees.

Broader Market Implications

The CoStar-RentPath combination signals consolidation within digital real estate marketplaces, reflecting the high costs of customer acquisition and brand establishment in competitive online markets. For investors in CoStar and observers of the real estate technology sector, the deal underscores the strategic value of established platforms, user traffic, and customer relationships—particularly in residential real estate, where fragmented supply creates persistent demand for aggregation platforms.

The integration will test whether CoStar can successfully merge distinct brand identities while preserving RentPath’s specialized focus on underserved rental segments and independent property owners.