CoStar Group Buys Software Platform for $273M
The move aims to boost real estate management operations.
CoStar Group has struck a deal to acquire a software platform that aims to boost the firm’s real estate management operations.
This is for Visual Lease, which was founded in 1996 and has been used by more than 1,500 organizations involved with healthcare, construction, manufacturing, and retail. In its third-quarter conference call, executives at CoStar said it made the acquisition for $272.5 million.
The platform, backed by Growth Street Partners and Spectrum Equity, offers clients solutions for accounting, reporting, and lease management. Plus, Visual Lease offers a support team for assistance.
Visual Lease will be combined with CoStar’s data and analytics database to boost integration opportunities with technology players and improve relationships with accounting service and real estate firms. Plus, CoStar said the purchase will offer all-size companies more lease management, and provide a boost to the company’s real estate manager unit.
“Visual Lease and CoStar Real Estate Manager are driven by the same mission of integrating all lease management portfolio functions into one user-friendly platform. Bringing Visual Lease into the CoStar Group family will allow us to create the best possible experience for our customers,” Andy Florance, founder and chief executive officer of CoStar Group, said in a statement.
“By combining CoStar Group’s industry expertise with Visual Lease’s diverse customer base, deep lease portfolio management expertise, and leading sustainability solutions, we are well positioned to offer a more comprehensive service offering and continue growing both nationally and internationally. I look forward to welcoming the Visual Lease team to CoStar Group and working together to develop new capabilities to better serve our clients.”
On the earnings call, Florance highlighted the challenges of the CRE market as a whole. For example, over the past year, he said that office prices have plunged 18 percent, multifamily is down 11 percent, with retail and industrial falling by only five percent each. However, Florance is optimistic about the future.
“The commercial real estate economy, has started to show signs of potential improvement, from what I think is probably a cycle bottom,” he told analysts.