CoStar Group inked a deal with a longtime tenant at its new Arlington HQ, leasing 13 of the building’s 31 floors. The tenant agreed to downsize to two floors, giving CoStar enough space for the 500 employees moving to the new HQ.
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CoStar Group is crossing its t’s and dotting its i’s as it prepares to move into its Arlington, Virginia, HQ in early 2025.
The site purchased a 552,000-square-foot office tower in downtown Arlington in February. However, research and consulting firm Gartner has taken 13 of the building’s 31 floors – complicating CoStar’s plans to relocate its 500 current employees and hire 150 new employees to occupy the new building.
However, Gartner agreed Friday to let go of 11 of the 13 floors at 1201 Wilson Boulevard. The company paid a $48 million early termination fee and signed an eight-year lease on the 11th and 12th floors.
Andy Florence | Credit: CoStar Group
“We have always intended for 1201 Wilson to be CoStar Group’s headquarters, but this deal allows us to complete that process quickly and better accommodate our rapid growth and expansion,” CoStar Group CEO Andy Florance said in a prepared statement. statement. “I’m excited that we’ll be able to fully enter the building’s extensive amenities and business-friendly Virginia location ahead of schedule and I can’t wait to welcome employees, customers and other constituents early next year.”
CoStar’s current headquarters is on L Street NW in Washington, DC The company purchased the DC location for $41.25 million in 2011 and sold it for $101 million in 2019. The terms of the sale included a lease that expires next year.
CoStar’s new headquarters is in a prime location and comes with many financial benefits. I The Associated Press reported in February that Virginia Gov. Glenn Youngkin gave CoStar $4.75 million in economic stimulus as the company is expected to create 150 new jobs. The AP also said CoStar struck a $14 million deal with Arlington County to buy a public observatory over the new HQ. This money will be used to renovate the park in Rosslyn.
“As states compete for business and jobs, the Commonwealth’s diverse, world-class talent, exceptional quality of life and stable business environment continue to shine,” said Gov. Youngkin in a public statement. “We are proud that CoStar has chosen Virginia as its home.”
CoStar’s HQ project comes three years after expanding its Richmond campus. The $460 million project included the addition of two buildings – a 26-story LEED-certified office tower and a six-story multi-purpose building. These new buildings will enable the company to increase its workforce locally from 1,500 to 3,500 employees.
The company started construction in November 2022 with a target of completion in 2025. Richmond BizSense and WTVR 6 reported on the project’s progress in June, noting that construction crews have installed elevators in both buildings.
The move to Arlington and the expansion of the Richmond campus are expected to increase CoStar’s workforce by 25 percent from 6,400 to 8,000.
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