CoStar Group recently announced it acquired Ten-X, a digital commercial real estate platform, for $190 million in cash. Ten-X was initially launched in 2009 to liquidate the large volume of distressed commercial real estate assets that came on the market during the Great Recession. Since then, Ten-X has become a leading platform for digital real estate transactions with that has executed approximately $24 billion of sales. Transactions include retail properties ($7 billion) and office properties ($6 billion), as well as multi-family properties, hotels and other commercial properties.
The top 25 commercial real estate brokerage firms in the United States have used Ten-X to execute transactions for their clients. Meanwhile, leading financial lenders have counted on the company’s transaction platform to sell billions in assets—including Fannie Mae, Chase, Capital One and Bank of America.
How Ten-X works
Tex-X speeds up the property sales process by qualifying and independently evaluating assets, finding likely buyers from a database of 400,000 buyers from 73 countries and qualifying the bidders and funds. The platform then provides a digital auction process and manages online escrow. Ten-X’s online model accelerates the marketing period of the sales process by decreasing deal times by up to 50 percent, while providing reliable execution, value maximization and an almost guaranteed close.
“Today, only 1% of all commercial real estate sales transactions take place online,” Tex-X CEO Steve Jacobs said in a statement. “Just like CoStar Group, we are focused on driving volume and efficiency and have devoted ourselves to addressing the massive, untapped demand for digital commercial real estate solutions. We see significant demand for a one-stop shop platform that provides solutions across the entire transaction continuum and we are delighted to combine our complementary capabilities and strengths with CoStar to meet that demand.”
The acquisition is an ideal one for CoStar, which operates the most heavily trafficked online marketplace for commercial properties and land for lease in sale in North America and Europe. The company had 10 million website visitors in April. When the transaction is complete, CoStar Group plans to integrate the platform directly into both its LoopNet and CoStar sites. The integration will expose properties that brokers are selling on the Ten-X platform to millions of potential buyers around the globe.
“Together, Ten-X and CoStar plan to create a new end-to-end commercial real estate platform, combining LoopNet and CoStar’s unmatched online audience of buyers with Ten-X’s clear leadership in online auctions for both performing and distressed assets”, CoStar Group Chief Executive Officer Andrew Florance said in a statement. “Combining our complementary capabilities is expected to create significant benefits for brokers and the institutions they represent by exposing their properties for sale to the biggest pool of potential bidders on the most trusted digital transaction platform and delivering fast and reliable trade execution. In the aftermath of the economic disruption which is being caused by the global pandemic, we believe that the volume of distressed properties coming to market will surge and that this combined platform will support the market’s recovery.”