CRE Information Provider Acquires LEED Gold Office Bldg. at 1331 L St. NW for $41.2M
CoStar Group finalized its acquisition last week of 1331 L Street, N.W., and will relocate its corporate headquarters to the 10-story, 169,429-square-foot office tower in downtown Washington, DC. The real estate information provider acquired the office building through a wholly owned subsidiary from the Mortgage Bankers Association for $41.25 million, or $243 per square foot.
CoStar plans to relocate from its current headquarters in nearby Bethesda, MD, by mid-October, when its lease expires. After completing the move, the company estimates that it will save about $1 million annually in occupancy costs at its new location.
CoStar's purchase price 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.
The LEED Gold-certified office tower was built in 2008 in the District's East End, near Thomas Circle. A joint venture of Paramount Group and DRI Development Services spent approximately to $90.8 million to construct the building. Upon delivery, the Mortgage Bankers Association (MBA) acquired a long-term leasehold interest in the building for $79.32 million, according to CoStar information. The building was put on the market in the fall of 2009 and is currently 50% leased.
"We are excited about a Washington, D.C. location for our new headquarters," stated Andrew Florance, CEO of CoStar Group. "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."
John Benzinger with Lincoln Property Co. represented CoStar. Stephen Conley, John Duffy, Andrew Weir and Elizabeth Taylor with HFF represented the MBA.
The Council of the District of Columbia agreed to provide key incentives to support such a move. CoStar stands to receive a $6.1 million tax abatement over a 10-year period, contingent on the company hiring 100 District residents. CoStar could also be eligible for further incentives, such as a five-year elimination of corporate income tax and various sale and tax exemptions.