Costar shareholders re-elect directors, resist external pressure

By Tom Joyce
The Center Square

CoStar shareholders overwhelmingly backed the company’s board and chief executive after months of pressure from activist investors.

CoStar Group Inc. said shareholders reelected every director nominee at the company’s annual meeting on Tuesday. Shareholders also approved every proposal, including an advisory vote on executive pay.

Founder and CEO Andy Florance received 99.5% support from shareholders, the company said.

The vote follows pressure from Third Point and D.E. Shaw, which pushed CoStar to change its board, cut costs and rethink its spending on Homes.com.

Third Point launched a public campaign against CoStar in January. The hedge fund urged CoStar to replace directors, focus on its commercial real estate business, and consider selling or shutting down Homes.com.

D.E. Shaw also pressed CoStar to change course. The Wall Street Journal reported in February that D.E. Shaw blamed CoStar’s stock problems on what it called a “high-risk, money-losing” investment in Homes.com.

CoStar rejected the criticism. The company said it will keep Homes.com while cutting net investment in the platform by $300 million in 2026 and by more than $100 million each following year. CoStar said it wants Homes.com to break even by the end of 2029.

Florance said the vote showed support for the company’s plan.

“Earlier this year, our Board, including three new directors, unanimously approved our plan to deliver revenue growth and prioritize EBITDA margin expansion,” Florance said in a statement. “We then communicated our strategic priorities and long-term objectives in face-to-face meetings with over 500 stockholders. The overwhelming stockholder support for our directors reflects their confidence in our strategy and the considerable opportunities ahead for CoStar Group.”

Third Point later ended its campaign. In April, the hedge fund sold its stake in CoStar, ending the proxy war.

Homes.com sat at the center of the dispute. CoStar owns both Apartments.com and LoopNet.

The dispute came as the Trump administration focused on housing affordability and competition in the housing market. President Donald Trump issued an executive order in January aimed at stopping large investors from competing with regular buyers for single-family homes.

Supporters say Homes.com gives buyers, sellers, and real estate agents another option in a market long dominated by a handful of listing websites.

The vote gives Florance a big win after months of activist pressure. It also strengthens his case to keep investing in Homes.com and prove the platform can turn a profit.