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Rental Boom Sparks Another Boom

Written by Dorothy G. Macdonald    Friday, 23 December 2011

Online rivals battle over renters’ eyeballs Domu.com is making a push to become Chicago’s premier Internet site for apartment listings, an industry dominated by Craigslist and Apartments.com. Chicago-based Schatz Development LLC launched Domu in April 2010, spreading word of the website through ads on bridges and CTA buses and trains. The push appears to be working. In April, Domu recorded more than 1 million page views in a month for the first time, says Andrew Porter, general counsel and vice-president of operations at Schatz, whose projects include the 212-unit 600 North Fairbanks condominium project. Mr. Porter acknowledges that Domu will be judged ultimately by its ability to generate cash and turn a profit. He declines to disclose Domu’s revenue or say if the website is profitable. Users can search Domu’s listings free, but landlords are charged a fee—$20 per unit for a two-week listing—to advertise properties. “We think we’re making substantial inroads,” Mr. Porter says. “Our biggest challenge right now is brand recognition.” Locally, the Internet apartment listing industry is dominated by national giants like Craigslist, Apartments.com and Rent.com. Observers say the king of the hill is Craigslist, which doesn’t charge users to view ads or landlords to post them. But the knock on Craigslist, they say, is that the site is cluttered with duplicate listings because landlords and apartment locators often post the same ad numerous times. A spokesman for San Francisco-based Craigslist declines to comment. Repetition isn’t a problem at Domu, but at least one leasing agent says Craigslist has what other sites don’t: a consistently high number of users. TOUGH COMPETITION Local data isn’t available, but, nationally, Craigslist attracted 57 million unique visitors in April, the most recent available data, according to its website. “We post ads on other sites, but most of our renters come through Craigslist,” says apartment leasing agent Eric Chaplik of Chicago-based @properties. “It’s not perfect. . . .But Craigslist is like that quirky stepchild—you just love it.” Chicago’s rental market is thriving right now. Rents are trending upward, as are occupancy rates, and several high-profile projects are under construction. With so much attention focused on the industry, observers expect more Internet apartment-listing sites to follow Domu’s lead and come online. But is there room for more? A local executive at Apartments.com doesn’t think so. Kevin Doyle says he expects some sites to fold or consolidate. “You can build a great website, but it’s hard to drive traffic to it,” says Mr. Doyle, a senior vice-president and general manager at Apartments.com. Nationally, Apartments.com counted nearly 5.7 million total visits in April, says a spokeswoman for Chicago-based Classified Ventures LLC, the website’s parent company, which is owned by five media companies including Tribune Co. Like Domu, Apartments.com charges landlords for listings, which are free to view. As of last month, the website had listings for about 17,000 apartment complexes, including 500 in the Chicago area, says Mr. Doyle, who declines to disclose revenue.

Last Updated ( Friday, 23 December 2011 )