CoStar Group Strikes Deal to Secure Relocation of Headquarters to Arlington, Virginia

Rhea-AI Summary

CoStar Group (NASDAQ: CSGP) announced an agreement with Gartner to secure office space at 1201 Wilson Boulevard in Arlington, Virginia, for its headquarters relocation in early 2025. Gartner will pay a $48 million early termination fee and retain approximately 49,000 square feet through 2032. The 552,000-square-foot LEED Platinum-certified building, recently purchased by CoStar, will accommodate the company's expansion from Washington, DC. CoStar's revenue has grown from $252 million in 2011 to $2.46 billion in 2023, with employee count increasing from 1,000 to over 6,400.

Positive

• Received $48 million early termination fee from Gartner
• Strategic acquisition of premium office space at market discount
• Revenue growth from $252M (2011) to $2.46B (2023)
• Employee growth from 1,000 to 6,400 demonstrating strong business expansion
• Inclusion in S&P 500 and NASDAQ 100 indexes

Negative

• None.

Insights

Real Estate Investment Analyst

This headquarters relocation deal reveals strong strategic and financial benefits for CoStar Group. The $48 million early termination fee from Gartner provides immediate cash flow, while securing prime office space in a LEED Platinum certified building at an opportune market timing. The company's track record of profitable real estate transactions, demonstrated by their previous 140% return on 1331 L Street, suggests shrewd market timing and execution capability.

The Rosslyn location offers significant operational advantages including superior transportation connectivity and amenities that can enhance talent attraction and retention. With revenue growth from $252 million to $2.46 billion between 2011-2023 and workforce expansion from 1,000 to 6,400 employees, this larger, consolidated space positions CoStar for continued scaling while potentially realizing cost efficiencies in business-friendly Virginia.

Gartner will cede 11 floors in 1201 Wilson Boulevard to secure CoStar Group’s corporate headquarters relocation in early 2025

WASHINGTON--(BUSINESS WIRE)-- CoStar Group (NASDAQ: CSGP), a leading provider of online real estate marketplaces, information, and analytics in the property markets, today announced an agreement with research and consulting firm Gartner to take back-office space previously leased by Gartner in Arlington, Virginia. Located at 1201 Wilson Boulevard, the building is a 552,000 square foot trophy office tower with LEED Platinum certification. CoStar Group purchased the property earlier this year with the intention of relocating its Washington, DC employees to Arlington as part of a corporate headquarters transition.

As part of the deal, Gartner paid CoStar Group a $48 million early termination fee and signed a new lease for approximately 49,000 square feet on floors 11 and 12 at 1201 Wilson Boulevard for a term through December 2032 at prevailing market rates. The deal unlocks sufficient space at 1201 Wilson Boulevard to allow CoStar Group to relocate its headquarters from Washington, DC in early 2025.

“We’ve always intended for 1201 Wilson to become CoStar Group’s headquarters, but this agreement makes it possible for us to complete that process even faster and to better accommodate our continued rapid growth and expansion,” said Andy Florance, Founder and Chief Executive Officer of CoStar Group. “I’m delighted we’ll be able to more fully tap into the building’s extensive amenities and location in business-friendly Virginia ahead of schedule and can’t wait to welcome employees, customers and other constituents early next year.”

With the Company’s current lease in Washington, DC set to expire in 2025, CoStar Group assessed more than 25 viable sites across Washington, DC, Rosslyn, Crystal City and Tyson’s Corner before selecting 1201 Wilson Boulevard With the industry’s largest team of researchers, economists, software developers and analysts focused on real estate, CoStar Group enjoys a unique perspective on commercial property values and believed that market conditions at time of purchase provided an opportune time to acquire a high-quality property at a significant discount. The company previously acquired 1331 L Street, NW, in Washington, DC in 2011 and executed a sale and leaseback transaction for over a 140% return. That deal was the most profitable sale of Washington commercial real estate from the recession at the time.

1201 Wilson Boulevard is located directly above the Rosslyn Metro offering excellent access to Ronald Reagan National Airport and Dulles International Airport and transportation, including five major road networks, from around the greater Washington DC area. The move to Rosslyn will offer employees access to extensive retail and dining amenities, a network of biking and jogging trails and the waterfront in a highly desirable, vibrant, and safe environment.

The agreement comes at a time of significant growth and expansion for CoStar Group, with revenue growing from $252 million in 2011 to $2.46 billion in 2023 and employees growing from 1,000 in 2011 to over 6,400 today. Founded in 1986, CoStar Group has digitized the real estate industry, empowering people to discover properties, insights, and connections that improve their businesses and lives. CoStar Group is included in the S&P 500 Index, one of the premier benchmarks of the U.S. equities market, and in the NASDAQ 100, one of the world’s largest preeminent large-cap indexes.

About CoStar Group

CoStar Group (NASDAQ: CSGP) is a leading provider of online real estate marketplaces, information, and analytics in the property markets. Founded in 1987, CoStar Group conducts expansive, ongoing research to produce and maintain the largest and most comprehensive database of real estate information. CoStar is the global leader in commercial real estate information, analytics, and news, enabling clients to analyze, interpret and gain unmatched insight on property values, market conditions and availabilities. Apartments.com is the leading online marketplace for renters seeking great apartment homes, providing property managers and owners a proven platform for marketing their properties. LoopNet is the most heavily trafficked online commercial real estate marketplace with over thirteen million average monthly unique visitors. STR provides premium data benchmarking, analytics, and marketplace insights for the global hospitality industry. Ten-X offers a leading platform for conducting commercial real estate online auctions and negotiated bids. Homes.com is the fastest growing online residential marketplace that connects agents, buyers, and sellers. OnTheMarket is a leading residential property portal in the United Kingdom. BureauxLocaux is one of the largest specialized property portals for buying and leasing commercial real estate in France. Business Immo is France’s leading commercial real estate news service. Thomas Daily is Germany’s largest online data pool in the real estate industry. Belbex is the premier source of commercial space available to let and for sale in Spain. CoStar Group’s websites attracted over 163 million average monthly unique visitors in the third quarter of 2024. Headquartered in Washington, DC, CoStar Group maintains offices throughout the U.S., Europe, Canada, and Asia. From time to time, we plan to utilize our corporate website, CoStarGroup.com, as a channel of distribution for material company information. For more information, visit CoStarGroup.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241101104056/en/

Investor Relations

Rich Simonelli

CoStar Group

(973) 896-8184

getrich@costar.com

News Media

Matthew Blocher

CoStar Group

(202) 346-6775

mblocher@costargroup.com

Source: CoStar Group

FAQ

When will CoStar Group (CSGP) relocate its headquarters to Arlington, Virginia?

CoStar Group plans to relocate its headquarters to Arlington, Virginia in early 2025.

How much did Gartner pay CoStar Group (CSGP) as an early termination fee?

Gartner paid CoStar Group a $48 million early termination fee.

What is CoStar Group's (CSGP) current revenue as of 2023?

CoStar Group's revenue in 2023 is $2.46 billion.

How many square feet will Gartner retain at 1201 Wilson Boulevard after the deal with CoStar (CSGP)?

Gartner will retain approximately 49,000 square feet on floors 11 and 12 through December 2032.