“Virginia’s a great choice for a new corporate headquarters location,” Youngkin said in a news release announcing the move. “As states compete for business and jobs, the Commonwealth’s diverse, world-class talent, exceptional quality of life and stable business climate continues to stand out.”
CoStar will also pay nearly $14 million to Arlington to obtain sole use of an observation deck at its new building at 1201 Wilson Blvd., which had been open to the public since 2019. Pending approval from the Arlington County Board, that money would be used for a planned reconstruction of Rosslyn’s Gateway Park.
Downtown D.C. and Arlington’s business corridors have been contending with office vacancies and reduced foot traffic as employees opt to work from home and companies renegotiate their leases. The company’s relocation across the Potomac River — a move that officials had been teeing up since January — is likely to increase those worries in the District as it calms them in Northern Virginia.
The District is already bracing for the possible loss of its NBA and NHL teams from Capital One Arena to the Potomac Yard section of Alexandria, pending approval from state and local lawmakers. Last month, Fannie Mae said it will cut its lease short at a downtown office building near CoStar, potentially shifting its operations to Reston.
CoStar moved its headquarters from Bethesda to D.C. in 2010, receiving a more than $6.1 million, 10-year tax abatement from the District, according to the Washington Business Journal. After flipping its building at 1331 L Street NW for a $60 million profit, it remained there under a 15-year lease.
The company, which owns Loopnet, Apartments.com, and Homes.com, has in the past decade rapidly grown its presence in Virginia, building and now expanding a 1,000-person research and operations hub in Richmond in exchange for up to $23 million in taxpayer dollars from Virginia. It employs about 6,200 people.
“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,” Andy Florance, the company’s founder and chief executive, said in a statement.
For its move to Arlington, the company received a $1.25 million grant from one Virginia pool of taxpayer money meant for “deal-closing” funds, as well as $3.5 million from the Virginia Economic Development Incentive Grant.
Payments through that program are allocated based on the number of new jobs or capital investment created by a company’s relocation to the commonwealth, according to the Virginia Economic Development Partnership. The grants are not typically paid until the third year after a corporate move.
Arlington, which traditionally has relied on commercial buildings for about half its property tax revenue, has struggled since the pandemic with historically high office vacancy rates. About 9 million square feet of office space — or 21.5 percent of the county’s full stock — was empty as of last fall.
CoStar will occupy about 150,000 square feet of office space at its new property, which is known as Central Place Tower and is located across from the Rosslyn Metro station. The company purchased the 560,000 square-foot building from the real estate developer JBG Smith, which helped facilitate both the Alexandria arena deal and also sold Amazon its second headquarters in Arlington.
Arlington County Board Chair Libby Garvey (D) said in a statement that she was “thrilled to welcome CoStar Group to Rosslyn, where their presence is sure to have positive economic impacts and will help to strengthen the neighborhood — especially with the faster realization of a reconstructed Gateway Park.”
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