Gartner Pays $48M To Terminate Rosslyn Lease, Clear Path For CoStar's HQ Move
CoStar Group’s plan to move its corporate headquarters out of Washington, D.C., is accelerating.
Consulting firm Gartner has paid CoStar a $48M early termination fee to exit its space at 1201 Wilson Blvd. in Arlington, Virginia — a glassy office tower CoStar bought this year for $339M with the intention of using it as its future headquarters.
The deal accelerates the real estate data giant's planned move into the 552K SF trophy office building in the Rosslyn neighborhood, where Gartner’s 350K SF lease placed it as the anchor tenant after the building opened in 2018.
Gartner’s control of more than half of the building was a potential hurdle for CoStar's plans to move hundreds of its employees into the space.
The consulting firm had already subleased 35K SF across two floors to coworking operator Convene and had placed the rest of its leased space, nearly 318K SF, on the sublease market in 2023, Washington Business Journal previously reported.
Now, Gartner has a new deal with CoStar: it has signed a new lease for just 49K SF of the 31-story office tower, part of the Central Place development, covering just the 11th and 12th floors. Gartner’s new lease runs through December 2032.
CoStar’s D.C. lease is set to expire next year, so the deal with Gartner allows CoStar to move into 11 floors of the 31-story building it now owns. It announced when it bought the building that it would occupy 150K SF in the tower, invest $20M into the space, move 500 employees from D.C. and hire 150 new workers.
“This agreement makes it possible for us to complete that process even faster and to better accommodate our continued rapid growth and expansion,” Costar CEO Andy Florance said in a statement. “I’m delighted we’ll be able to more fully tap into the building’s extensive amenities and location in business-friendly Virginia ahead of schedule and can’t wait to welcome employees, customers and other constituents early next year.”
After buying the building earlier this year, CoStar struck a deal with the Arlington County government this summer to close the Rosslyn Observation Deck on the rooftop of Central Place. The space was previously a free viewpoint for members of the public to observe the D.C. skyline, but CoStar was able to end public access to the space in exchange for committing $14M to the county to improve Gateway Park a few blocks away.
Florance founded CoStar in 1986 and has grown it to become the dominant force in commercial real estate data and a growing power in residential listings. The company touted its ability to harness its data to strike favorable deals for its own office space.
CoStar bought its current headquarters building at 1331 L St. NW and sold it in 2011 to a German real estate investor, executing a sale-leaseback transaction that saw it more than double its investment.
