Updates from the CRE World: Airbnb, CBRE, CoStar, Keller Williams & WeWork

Airbnb Leaning Towards a Direct Listing Instead of an IPO
San Francisco-based Airbnb is rumoured to be considering a direct listing instead of an initial public offering (IPO), according to Bloomberg News.

The home-sharing company is currently estimated to have a valuation of $31 billion and was expected to go public next year. Sources say Airbnb will instead opt for a direct listing, which will save the company from paying millions of dollars in fees to investment banks in an IPO. It also wouldn’t require the company to water down its market value by issuing additional shares. Additionally, an IPO would force Airbnb to disclose its financials to the general public.

Airbnb’s rumoured move to a direct listing maybe a response to problems that have plagued recent public offerings. Startups that have IPOed in 2019 have generally done poorly, with giants like Uber, Lyft, and Peloton all trading below their offer price and wiping out hundreds of millions of dollars during their debuts. Not to mention WeWork’s recent decision to suspend its IPO plans after investor scrutiny of its financials, corporate governance and the behavior of its founder and CEO.

Both Spotify and Slack chose direct listings over IPOs in recent years.  .

Costar Acquires STR
CoStar Group, Inc. the leading provider of commercial real estate information, announced today that it plans to acquire STR for $450 million in cash, subject to adjustments in the definitive agreements. The transaction is expected to close in the fourth quarter of 2019, subject to customary closing conditions.

Hendersonville, Tennessee-based STR aggregates data from more than 65,000 hotels worldwide, D.C.-based CoStar said in a release, distributing 1.2 million reports monthly as the “gold standard in the global hospitality industry for premium data analytics, performance benchmarking and market insights.”

“In the way that CoStar’s acquisition of Apartments.com enabled CoStar to extend valuable new services to investors and service providers in multifamily real estate, we believe that STR will complement CoStar’s existing offerings and empower CoStar to provide valuable new services to investors and service providers in the hospitality industry,” CoStar said in a release.

CBRE Completes Acquisition of Telford Homes PLC
CBRE Group, Inc. announced that it has completed the previously announced acquisition of Telford Homes Plc, a leading developer of multifamily residential properties in London.

Telford Homes, which is focused on middle-market, build-to-rent properties, will operate as part of Trammell Crow Company, CBRE’s wholly owned real estate development subsidiary. The acquisition expands Trammell Crow Company’s highly successful US development business into the UK market.

Build-to-rent is a fast-growing sector of the London housing market. This growth is being fueled by changing attitudes about renting versus ownership, greater affordability relative to for-sale housing and limited supply.

“We are excited about the opportunities that Telford Homes affords us,” said Bob Sulentic, president and chief executive officer of CBRE. “The UK is in the early stages of a secular shift toward institutionally owned urban rental housing and Telford Homes’ talented team positions us to lead this trend.”

Keller Williams Expands to Japan
Keller Williams, the world’s largest real estate technology franchise by agent count, is expanding across Asia. KW has awarded a new master license in Japan. KW now has more than 50 market centers and 2,164 agents across 10 countries and regions in Asia.

Led by Regional Operating Principal Mark Yamamoto, the Keller Williams franchise in Japan is currently initializing operations. KW Japan is expected to open its first market center in Q4 ‘19.

Japan marks the 10th KW master license in Asia. The brand’s other nine regions include Cambodia; Dubai, UAE; Greater Shanghai, China; Indonesia; Israel; Malaysia; the Philippines; Turkey; and Vietnam.

WeWork Postpones IPO
Flexible office space startup WeWork officially pulled the plug on its initial public offering yesterday after announcing that it would withdraw its S-1 registration statement, according to Fortune. Co-CEOs Artie Minson and Sebastian Gunningham said, “We have decided to postpone our IPO to focus on our core business, the fundamentals of which remain strong.”

They further said they have every intention to take WeWork public in the future. The co-working giant has been plagued by questions about the viability of its business model, questionable financials, an inadequate corporate governance model and the behavior of its founder.

The company has amassed losses of $3bn over the last three years and could run out of money some time after the first quarter of 2020, according to Chris Lane, an analyst at Sanford C Bernstein & Co. We Co, as WeWork’s parent is called, had $2.5bn of cash as of 30 June and is running through about $700m each quarter.