Andy Florance, the founder and CEO of CoStar Group, rises into the top 10 based on his firm’s deepening dive into the residential sales side of real estate. In late 2022, the firm formally merged the agent productivity tool Homesnap with Homes.com and launched the latter as its residential real estate marketplace.
As the long-time leader in the commercial real estate marketplace and data space, CoStar Group, which has a market cap of over $32 billion and $5 billion in cash on hand, is aggressively pursuing a goal to become a major player in the residential sales space. Just before debuting the new Homes.com at NAR annual, CoStar reported the site’s traffic jumped 52 percent in the third quarter 2022, compared to the same period in 2021, and that Homesnap Pro now had 958,000 registered users.
Florance made clear on his firm’s third quarter earnings call that residential real estate is a big focus for him and the firm in 2023 and is actively hunting strategic acquisitions to bolster the Homes.com business. This search is buoyed, in part, by a September 2022 equity raise of $750 million. In addition, he reiterated a sales strategy of advertising homes versus advertising agents and doubling down on an approach of highlighting listing agents on their listings on the site.
CoStar Group has a strong business strategy to sustain these goals. It reported $1.6 billion in revenue through the third quarter in 2022, a jump of 12.0 percent from the same period in 2021. More importantly, it is profitable, with a reported net income of $245 million through the first nine months of the year, up 22.7 percent from 2021. Reflecting its performance, the S&P 500 index added CoStar’s common stock to its portfolio in 2022.
Andy Florance has not yet grown Homes.com and Homesnap into major power players in residential real estate, but based on his stated intentions, deliberate and bold moves together with his track record for developing marketplace, it is evident he has become one of the 10 most powerful executives in residential real estate.