CoStar Group Adds New Board Members and Forms Capital Allocation Committee

April 7, 2025

CoStar has announced a significant shake-up at the board level and quietly signaled that Homes.com will be included as part of a company-wide strategic review.

The portal operator is adding three new independent directors as part of what it's calling a “board refreshment.”

Alongside the board moves, CoStar is also setting up a new Capital Allocation Committee of independent directors. Its mandate is to “provide oversight of the company’s capital allocation strategy,” including LoopNet and Apartments.com, while according to CoStar, Homes.com will be reviewed to crystallize "an appropriate timeline for profitability."

Andy Florance, CEO at CoStar Group, said:

"With the strength and support of the refreshed Board, CoStar Group is well positioned to extend its long track record of creating stockholder value.

"We have invested in creating more than half a dozen highly profitable, category-leading digital real estate solutions by leveraging our research & development capabilities, massive data advantage and an online community of more than a billion real estate market participants. By maintaining our fortress balance sheet and strong cash flow profile, we will continue to build on our successes through disciplined investment in key growth initiatives across our platforms."

Daniel S. Loeb, Chief Executive Officer of Third Point LLC, commented:

"We are pleased to be significant CoStar stockholders and believe that these steps to refresh Board composition, update executive compensation programs and articulate a disciplined capital allocation strategy will improve the business and drive significant stockholder value."

CoStar has spent hundreds of millions on building Homes.com into a challenger brand to Zillow—from TV campaigns and celebrity-backed ads to a self-reported $1 billion in residential investments. Until now, though, there’s been little public talk of return on that spend.

The language in the press release isn’t an about-face, but it’s the first sign that Homes.com’s performance and monetization strategy is under active review at the board level. It also comes just as CoStar prepares to ramp up Homes.com's monetization in 2025 and go from a team of 275 to 500 dedicated sales staff by the end of the year

With new board members and a fresh governance structure in place, the company seems to be trying to reassure investors: the big bets will keep coming, but from now on, there’ll be more eyes on the scoreboard.

Meanwhile, the CoStar Group Board intends to review the Company’s executive compensation programs to ensure management’s incentives remain aligned with stockholder value creation.

April 7, 2025
Since March 2020 Edmund's job has been to read about, write about, collect data on, analyse and generally know about real estate marketplaces and the companies that run them. Before that he worked at the aggregator Mitula Group (which became Lifull Connect) for five years.

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