CoStar Group has announced that it will be relocating its headquarters to its Arlington, Virginia property after making arrangements with consulting firm Gartner.
Earlier this year, CoStar purchased a 552,000-square foot trophy office tower at 1201 Wilson Boulevard, located above the Rosslyn metro area, where Gartner operated back-office space. The company has struck a deal that would terminate the lease and allow CoStar to relocate its headquarters from Washington D.C. to the space in early 2025.
Gartner will be staying in the building but will be taking floors 11 and 12, amounting to 49,000 square feet total, as a part of the arrangements. The new lease will allow it to occupy the space until December 2032.
Also, the Stamford, Connecticut-based firm has paid CoStar a $48 million early termination fee.
The 1201 Wilson property will offer workers “extensive retail and dining amenities” in the area. Plus, jogging trails and biking trails are nearby, along with transportation.
“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 CEO of CoStar.
“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.”
Before purchasing 1201 Wilson, CoStar said it explored options across more than 25 sites in Tyson’s Corner, Crystal City, Washington DC, and Rosslyn. However, the real estate firm ultimately decided on 1201 Wilson thanks to the opportunity it saw to acquire what it deemed a “high-quality property at a significant discount.” Previously, the company bought 1331 L Street, NW, in Washington, DC, and proceeded with a sale-leaseback afterward. CoStar said the move, which generated a 140 percent profit, represented the highest sale return rate at the time of a Washington CRE property since the Great Recession.
In some key markets like Chicago, office properties are selling at deep discounts, a Commercial Edge national market report finds. But in the third quarter, some markets including Washington D.C., the Bay Area, and Manhattan maintained steady prices with $1 billion in office sales recorded each.