CoStar Group Buys MBA Headquarters for $41m
CoStar Group (CSGP), the Bethesda, Md.-based commercial real estate research and analytics firm, bought a Washington, DC property where the Mortgage Bankers Association (MBA) headquarters its operations. CoStar said in a press release Friday it will pay $41.25m for the building located at 1331 L Street, NW - significantly less than the $90.6m price tag of constructing the building. The MBA said in early 2007 it would purchase the property for an undisclosed amount. According to industry reports, the MBA financed the building’s purchase with $75m in loans. The association did not return calls seeking comment on the remaining balance of debt from the purchase. CoStar, which will relocate its headquarters to the building, said it is set to receive $6.1m in property tax abatements from the council of the District of Columbia over the next 10 years. The abatements depend on CoStar hiring 100 DC residents, among other requirements. In addition, CoStar said it may be eligible for additional incentives, including a five-year elimination of District corporate income tax and sale and use tax exemptions. The building has 169,429 square feet of rentable space and is Leadership in Energy and Environmental Design (LEED) gold-certified, the second highest rating the US Green Building Council bestows on environmentally sustainable buildings. CoStar said half of the building is currently occupied. “We are also fortunate to be able to take advantage of what we see as a historic opportunity to secure an exceptional asset at a greatly reduced price,” said CoStar Group CEO Andrew Florance, in a press statement. CoStar said it’s purchase price of $243 per square foot is less than half the current market rate median of $518 per square foot for class A office buildings sold in Washington, DC since Jan. 1, 2009. CoStar’s lease at its current Bethesda headquarters ends on October 15, and until then, the company said it will have a period of overlapping occupancy costs, but after that time period, expects to save approximately $1m a year in occupancy costs versus leasing space in a comparable building. Write to Austin Kilgore. The author held no relevant investments.