EBay today announced plans to purchase Rent.com, making its entrance into the online real estate category in a deal valued at approximately $415 million. Rent.com is an online listing service in the apartment and rental-housing category.
The acquisition amount will be paid with approximately $385 million in eBay common stock and $30 million in cash. The purchase will enable eBay to expand into a new segment of the online real estate market while allowing Rent.com to continue to scale its business with the resources and expertise of eBay.
“Rent.com has been extremely successful in the apartment rental space online and is a great match for eBay,” said Bill Cobb, president, eBay North America. “Together we can strengthen both businesses and help consumers get the most out of real estate online.”
Santa Monica, Calif.-based Rent.com has grown rapidly to become the most visited apartment listing Web site in the nation, according to comScore MediaMetrix. With Rent.com’s transaction-based business model, apartment owners and managers are able to list properties on the Web site free of charge and pay success fees only for leases produced through Rent.com.
Rent.com has 18,212 properties comprising more than 4 million rental units nationwide. The company expects revenues in 2004 to total more than $40 million.
The acquisition, which is subject to regulatory approval and approval of Rent.com’s stockholders, is expected to close in the first quarter of 2005.
Rent.com, which launched in October 2001 with its current name and business model, offers listings in about 1,500 major metropolitan areas across the country. The site has an active user base of over 2 million registered users and typically registers about 550,000 new renters each month.
The site offers photos of listings, but the listings are mostly text. That makes for quick loading, but can be difficult to scan quickly for property details such as price.
Other sites in the online rental space include RentNet.com, ForRent.com, ApartmentGuide.com and Apartments.com.
Homestore acquired RentNet.com, formerly SpringStreet.com and AllApartments.com, for $47.4 million in stock. RentNet.com was launched in 1995. According to Media Metrix, the site had an average of 1.38 million unique users each month from January 2004 to May 2004. The site offers listings in about 300 markets across the country, and targets apartment properties with more than 40 units.
ForRent.com, based in Virginia Beach, Va., has about 40,000 apartment community listings. The Web site is associated with For Rent Magazine, which is distributed in about 180 markets across the country. The site is graphics-intensive and users who click on a specific listing can get more detailed information about the rental units, including square footage, floor plans and a list of features and amenities.
ApartmentGuide.com generally has listings of properties that have 50 or more units. The average is a 200-unit community. The site receives about 1.5 million unique visitors per month and generates about 420,000 leads per month, according to the company. The Apartment Guide also is available in print.
Apartments.com was born out of Visual Properties, which was founded in 1992 to serve Chicago-area renters. In 1997, Visual Properties launched ApartmentsPlus as an online extension of its retail services, and that site went nationwide. Visual Properties and ApartmentsPlus were acquired by Classified Ventures in January 1998 and Apartments.com was launched that year.
The site ranks as one of the top three Internet apartment-listing services, as counted by Media Metrix. Apartments.com receives an estimated 3.6 million visitors per month, or an average of 120,000 visitors per day. Property management companies, newspaper classified ads and for-rent-by-owner advertisers provide listings.
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