CoStar Turns Profit on D.C. Headquarters
- Feb 24, 2011
February 23, 2011
By Barbra Murray, Contributing Editor
Exactly one year after acquiring a 169,500-square-foot Washington, D.C., office building for its headquarters in a $41 million deal, CoStar Group Inc. closed the disposition of the property in a $101 million sale-leaseback transaction with GLL L-Street 1331 L.L.C,, an affiliate of GLL Real Estate Partners GmbH. The commercial real estate information and analytic services provider walks away with all cash in pocket.
After CoStar’s February 2010 purchase of 1331 L St. from the Mortgage Bankers Association–which had bought it from developers Paramount Group Inc. and DRI Development Services L.L.C. for approximately $79 million in 2008–the company commenced a renovation program that transformed the downtown office building into a trophy class asset with LEED Gold certification from the U.S. Green Building Council. Just how much CoStar invested in upgrades is a figure the company is not disclosing publicly, however, all signs point to a sizeable profit on the short-term hold.
“The opportunistic acquisition of this building for our headquarters office was part of our larger strategy to create value through our occupancy of the building,” Andrew C. Florance, CoStar founder and CEO, noted in a press release. “This sale will enable us to unlock the value of this formerly distressed property and provide an attractive return on our investment.”
CoStar’s lease with GLL is for a 15-year term, with the option for two five-year renewals. Terms of the transaction also allow for $15 million to be held in escrow to finance further build-out and planned improvements to CoStar’s space and the 10-story building’s common areas.