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FTC sues CoStar, eXp gets bigger, WaPo on Fannie & Freddie 🗞

By December 2, 2020 No Comments

What do recent pending home sales numbers tell us?

December is set to become an absolutely CRUSHING IT month for Initial Public Offerings, and it’s all about housing, in some way, or another.

That’s because the demand for initial public offerings has roared back to life on Wall Street, led most recently by highly anticipated debuts from Silicon Valley darlings Airbnb and DoorDash, which are both expected to begin trading in December, and both are homeowner services.

The sizzle is also extending into real estate.

Heavily-funded real estate brokerage Compass hired Morgan Stanley and Goldman Sachs to lead their initial public offering, according to a (paywall) report in Bloomberg News citing a person with knowledge of the matter.

Aspire Real Estate Investors also recently disclosed that it has set terms for its initial public offering, in which the real estate investment trust formed to invest in and manage affordable workforce multifamily housing expects to raise about $300 million.

But not all real estate related deals are sailing through.

The FTC has filed a suit in federal court to block internet listing services provider CoStar Group’s proposed $587.5 million acquisition of competitor RentPath Holdings. The two companies together own the largest rental listings websites: Apartments.com, ApartmentFinder.com, ForRent.com, Rent.com and ApartmentGuide.com.

The complaint alleges that the acquisition would significantly increase concentration in the already highly concentrated markets for internet listing services advertising for large apartment complexes, said the FTC in a statement.

“CoStar and RentPath operate several of the most popular sites, and their aggressive, head-to-head competition has kept advertising rates low while offering consumers a convenient, data-rich tool for finding an apartment,” said Daniel Francis, Deputy Director of the FTC’s Bureau of Competition. “This acquisition will eliminate price and quality competition that benefits both renters and property managers.”

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eXp is short for eXpansion right now

Publicly traded eXp World Holdings, the parent company for eXp Realty, is officially one of the fastest-growing real estate companies in the world.

Yesterday they announced further expansion, this time into Mexico. In addition to its robust U.S. presence, eXp Realty also operates in Canada, the United Kingdom, Australia, South Africa, and India, with more than 39,000 agents across the globe.

“We carefully selected Mexico as the first Spanish-language country in our global expansion, due to their vibrant history, rich culture, and strong real estate market,” said Mickael Valdes, ​President of eXp Global, in a statement. “With a population of 126 million, we see a phenomenal opportunity with our superior platform to change the real estate industry in a country as important as Mexico. eXp brings to Mexico tremendous opportunities for agents to grow and develop not only their own businesses, but to support the growth of other agents as well.”

For those familiar with eXp, it is perhaps one of the most tech-driven companies out there. It operates an entire virtual world, where agents can have direct access to executives and socialize among themselves digitally. Agents often post these group activities to their personal social media, further supporting the eXp community.

More notably, eXp offers a unique compensation model, which includes revenue share and equity ownership opportunities, offers agents a roadmap to elevate themselves, their families, and communities by potentially building financial independence.

“We haven't seen anything like the eXp Realty model before in Mexico,” said eXp Designated Managing Broker, Ismael Gonzalez, who will lead the operations in Mexico.

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WaPo: Privatizing Fannie and Freddie is a terrible idea

The FHFA is said to be rushing to get Fannie Mae and Freddie Mac recapitalized and released back into private hands. Market experts say it is unlikely this will happen before the new administration takes over in January. However, it is not impossible.

The Washington Post editorial board has decided to cast its vote. They’ve declared that any effort to release Fannie and Freddie before the administration changes hands is a terrible idea.

“We have some sympathy for Mr. Calabria’s desire to end the amorphous status quo,” the board writes in its opinion (here, paywall). “But a privatization rushed to beat President-elect Joe Biden’s inauguration is a bad idea.”

“It might be a bad idea, period: Given the 2008 bailout, selling the two entities off would amount to a taxpayer-enabled windfall for hedge funds and other investors who bought the beaten-down stock speculating on just such a policy change,” they continued.

Instead, the board suggests the Biden administration’s most realistic duty is to press ahead with incremental improvements that do not require legislation so that Fannie and Freddie may be better positioned for a permanent legislative fix or, at least, to cope with the next crisis, when it inevitably comes.

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