hey say that Virginia is for lovers. If that is true, then no one loves Virginia more than the CoStar Group.
The world’s largest real estate data company has crunched the numbers and concluded that if one Virginia city is good for growth, why not make it two?
A savvy real estate deal, timely incentives, abundant amenities and a multimodal transportation hub combined to lure CoStar Group’s corporate headquarters from Washington, D.C., to Arlington County, Virginia, the company announced on February 13.
Combined with a massive research campus in Richmond, the latest move gives CoStar a commanding presence in two Virginia markets even as the firm expands its global reach.
Taking advantage of a downturn in the commercial real estate market, CoStar is acquiring the 31-story, 552,000-sq.-ft. Central Place Tower, a Class A office building at 1201 Wilson Boulevard in Rosslyn, where it will relocate more than 500 employees later this year from the firm’s current home at 1331 L Street, N.W., in the nation’s capital.
The new CoStar Group research campus in Richmond, Virginia, is expected to welcome another 2,000 employees joining the 1,000 who already work at the company’s site there.
Renderings courtesy of CoStar Group
“The financially strategic acquisition of this building will provide the perfect home for the more than 500 employees at our current headquarters,” said Andy Florance, founder and CEO of CoStar. “We’re incredibly thankful for our 14 years calling Washington, D.C., home, and we will continue to be a part of this community even as we move across the river to Arlington County.”
And yes, CoStar data helped in the move, Nadia O’Dea, senior director of corporate real estate and facilities for CoStar, confirmed in an interview with Site Selection.
“We use our data to look for hidden investment opportunities, like the building we found in Arlington,” O’Dea says. “We were initially talking about a sublease and then figured out that a much bigger opportunity was there.”
The company paid $339 million to Maryland-based JBG Smith Properties and New Jersey-based PGIM Real Estate for the new HQ property and will be eligible to collect $7 million in tax and other economic incentives. This includes a $1.25 million grant from the Commonwealth’s Opportunity Fund and a $3.5 million Virginia Economic Development Incentive Grant. In addition, the Virginia Economic Development Partnership’s Virginia Jobs Investment Program will provide funding and services to support the company’s workforce training needs.
CoStar plans to occupy 150,000 sq. ft. in the new HQ, make an additional capital investment of $20 million in the move, and eventually add another 150 new hires. The 391-foot tower, the tallest in Arlington, was completed in 2017.
With the firm’s current lease in D.C. set to expire next year, the 38-year-old company set out to scour the market for a suitable fit at a good deal. CoStar Group said in a press release that it assessed more than 25 viable sites across D.C., Rosslyn, Crystal City and Tyson’s Corner before selecting the high-rise building at 1201 Wilson Boulevard.
CoStar’s new digs are located directly above the Rosslyn Metro station, providing employees with convenient access to Ronald Reagan National Airport and other modes of transportation, including five major roads to help workers get around the tri-state Greater Washington area.
The company noted that “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.”
Map of Arlington shows location of new CoStar Group HQ in Rosslyn neighborhood, which is just across the Potomac River from Georgetown and Foggy Bottom.
Courtesy of Arlington Economic Development
Located directly across the Potomac River from Georgetown and Foggy Bottom, Rosslyn is a densely populated area with an average household income of $105,000 and home to a workforce with 81% of adults holding college degrees. By moving to Rosslyn, CoStar joins an office cluster that includes the Nestle headquarters, Deloitte and Microsoft. Amazon, Boeing, Raytheon and Northrop Grumman are just down the road in Arlington’s National Landing neighborhood.
Ryan Touhill, director of Arlington Economic Development, called CoStar “the biggest deal in Arlington since Amazon HQ2” five years ago. Touhill says Arlington competed for over a year to land the CoStar HQ. “We were confident all along as a contender. We knew we offered access to both Dulles and Reagan,” he says. “Plus, we have access to mass transit via our rail network. Rosslyn is a great community that is becoming an 18-hour neighborhood. The cherry on top was 1201 Wilson — a trophy property with an observation deck. We were competing for this deal up until the time of the announcement. We never rested until it was announced.”
A Governor Who Wants Hockey, Basketball and More HQs
Founded by Andy Florance in 1986, CoStar has seen its revenue grow from $252 million in 2011 to $2.46 billion in 2023. CoStar’s global workforce, meanwhile, has grown from 1,000 in 2011 to more than 6,200 in 14 countries today. A highly diversified real estate information, analytics and news company, CoStar has grown its business organically and through acquisition. Its portfolio of 27 brands includes LoopNet, Homes.com, Apartments.com, BizBuySell, Land.com, Thomas Daily and Ten-X, formerly known as Auction.com.
Listed on the S&P 500 and NASDAQ 100, CoStar is one of the most closely watched stocks in the real estate sector in America. But increasingly, its influence has gone international. Over the last few years, CoStar has acquired several European brands. Just last month, the company consolidated three French acquisitions into one location at a new office in Paris.
On the day after the Virginia HQ announcement, CoStar’s O’Dea sat down at the company’s research campus in Richmond to detail the process that led CoStar to Arlington.
“We had landlords reaching out to us. We are a strong, financially backed company. We are an ideal tenant for any landlord.” — Nadia O’Dea, Senior Director, Corporate Real Estate & Facilities, CoStar Group
“Our lease in D.C. comes up in May of 2025,” she explains. “We searched the entire D.C. and Northern Virginia market — Tyson’s, Rosslyn, all over D.C. We got an early start. We always know that our executives will be at our headquarters. We will have up to 650 people working at our new location in Virginia. That is what we committed to the state and city. We had landlords reaching out to us. We are a strong, financially backed company. We are an ideal tenant for any landlord.”
Multiple location factors proved critical, O’Dea adds: “A location near the Metro; lots of amenities for staff; the fact that we are in the office four days a week; prominence; easy access to airport; easy commute between Arlington and D.C.; easy access to our Richmond campus; signage opportunity; great views; safety; a beautiful, upgraded building; and collaboration and support from the State of Virginia.” She adds that “coming here has been tremendous. They wanted us here and helped us find a way to be here.”
Virginia Gov. Glenn Youngkin, who has also been recruiting the NBA’s Washington Wizards and the NHL’s Washington Capitals to his state, welcomed the news of CoStar’s relocation with glee.
“Virginia is a great choice for a new corporate headquarters location, and we are excited that CoStar Group, a leading provider of online real estate marketplaces, information and analytics in the property markets, sees the economic advantage in moving to the Commonwealth,” Youngkin said. “As states compete for business and jobs, the Commonwealth’s diverse, world-class talent, exceptional quality of life and stable business climate continue to stand out. We are proud that CoStar has chosen Virginia as its home.”
CoStar Makes an Even Bigger Bet in Richmond
Arlington is not the only place where CoStar is growing. In December 2021, CoStar — which has reported double-digit growth every quarter since Q2 2011 — announced a two-building, $460 million expansion of the company’s Innovation Campus in downtown Richmond. Upon buildout, the complex will be home to more than 3,000 employees.
Rosslyn Skyline and Views from Rosslyn
Photos courtesy of Arlington Economic Development
Richmond experienced some of the fastest job growth in the nation between 2021 and 2023, according to the Milken Best Performing Cities ranking for 2024. Richmond placed among the five fastest-rising cities in the ranking this year, along with Houston, Philadelphia, Elgin, Illinois, and Wichita, Kansas. It also finished in the Top 10 in Site Selection’s Tier-1 Top Metros Per Capita ranking released last week.
Greater Richmond is a market of 1.3 million people and 11 Fortune 1000 company headquarters. More than 20 area colleges and universities provide talent to CoStar in the state capital, which is also home to more than 200 international companies.
Lisa Ruggles, Senior Vice President, Global Operations, CoStar Group
TLisa Ruggles, senior vice president of global operations, notes that Virginia’s talent pool is one of the primary reasons why the company chose to grow in the Old Dominion.
“The school system with the colleges and universities in Virginia — Virginia Commonwealth University, University of Richmond, James Madison University, Virginia Tech, University of Virginia, etc. — provide CoStar with talented people,” she says. “We hire a lot of researchers who are either new to their career or just a couple of years into it. Richmond is a place where people want to live when they come out of college. We also partner with neighboring states. We pull talent from North Carolina, Maryland and South Carolina. But 70% of our talent comes from Virginia.”
The company established its headquarters for research and data analytics in Richmond in 2016. It now employs more than 1,000 people there. From this location, the company curates and certifies more than $1.5 trillion in real estate transactions every year. When the newly expanded Richmond campus is completed in 2026, the company intends to hire another 2,000 workers to occupy the 750,000-sq.-ft. complex.
Jennifer Wakefield, president and CEO of the Greater Richmond Partnership, says that “the location of CoStar’s building at 501 South Fifth Street is in a neighborhood that includes large office buildings, as well as large areas of the James River Park system. What we have seen is an uptick in return-to-office, and CoStar led the way for companies to pull their remote or hybrid employees back to the city.”
Greater Richmond is home to major facilities for CoStar Group, LEGO Group, Meta, QTS and many other large corporate end-users.
Map courtesy of Greater Richmond Partnership
DID YOU KNOW?
- CoStar spent $35 million on ads for Homes.com and Apartments.com during Super Bowl LVIII.
- More than 181,000 industry professionals use CoStar data, which tracks more than 7.3 million commercial real estate properties worldwide.
- CoStar has taken more than 27 million photos of properties globally.
Sources: CoStar Group and USA Today Ad Meter
CoStar’s O’Dea adds that “we have 80 locations around the globe. Our Paris office opened last week. We have locations in Boston, Chicago, Atlanta and all the major cities in the U.S. and Canada.” Toronto, London, San Diego and Irvine, California, are among them, she notes.
And the company is always growing. On February 20, the firm reported a net revenue increase of 13% for 2023, rising to $2.46 billion from the $2.18 billion it achieved in 2022. Marketing is a big driver of the company’s growth. The firm has committed to spending more than $1 billion on advertising to expand its presence in the residential market. This new ad spend was highlighted by four commercials that aired during the Super Bowl last month for Homes.com and Apartments.com. CoStar spent a reported $35 million on those ads. It also plans to advertise during the Olympic Games, the Emmy Awards, the Academy Awards and college basketball’s March Madness.
Before being headquartered in D.C., CoStar Group was based in Bethesda, Maryland. For the foreseeable future, Virginia will be the place where the company’s biggest decisions are made.
