News Article

WASHINGTON, D.C.—When you buy a prime piece of D.C. commercial real estate for a bargain price, you’ve made a great deal. When you turn around and sell that property for more than double what you paid for it, you’ve made the best deal of the year.
 

The Washington Business Journal named the CoStar Group’s purchase of its D.C. headquarters as the 2010 Best Real Estate Deal winner in the Urban Office Sale category. The company’s subsequent sale of the property (which will be eligible for the 2011 Best Real Estate Deal Awards) only made the deal better. A Womble Carlyle team of Des Connall, Richard David, Stan Wrobel and Kevin Pigott counseled CoStar on the transactions.

The first transaction took place in February 2010. CoStar wanted to relocate from its suburban location in Bethesda, Md., to a more centrally located office in Washington, D.C. The company provides information and analytic services for the commercial real estate industry, and needed additional space for its growing business. They found an ideal building – the 1331 L Street N.W. headquarters of the Mortgage Bankers Association.

The 10-story building was built in 2008 and remains a state-of-the-art office space. But the Mortgage Bankers Association needed to sell. With the help of the Womble Carlyle team, CoStar was able to negotiate a purchase price of $243 per square foot, approximately half of the asking price for Class A office buildings sold in Washington, D.C. just months earlier, and substantially lower than what the building originally sold for when it was new. CoStar also negotiated a $6.1 million property tax abatement package from the D.C. City Council, provided, among other things, the company employs 100 additional D.C. residents.

Then, in February 2011, CoStar sold the property to GLL Real Estate Partners GmbH in a sale-leaseback agreement for $101 million – more than double what the company had paid for the building just one year earlier.

CoStar Group Founder and CEO Andrew C. Florance said, “It wasn't luck, we used market insight from our research and analytics very effectively when we purchased our headquarters in Washington and sold it a year later for more than twice what we paid for it. We were able to capitalize on the recovery in investment grade real estate before the average investor was aware of it.”

CoStar received its Best Real Estate Deal Award in an April 28^th ceremony at the Mayflower Renaissance. Congratulations to everyone at CoStar for this outstanding success!