CoStar CEO explains move to Richmond, which will bring hundreds of employees
RICHMOND, VA. –While it may not have been the only factor, Richmond’s glut of downtown office space and the resulting price per square foot helped seal the deal to bring a major new employer to the riverfront.
CoStar CEO Andrew Florance said the real estate research firm will pay in the mid-$20s per square foot annually for its recently announced lease of about 100,000 square feet at the WestRock building at 501 S. Fifth St., where it plans to eventually hire more than 700 employees.
The other two cities that made it into the final stage of CoStar’s search for a new office were Charlotte and Kansas City, Missouri, where rates per square foot would have been in the $50 to $60 range, Florance said.
A similar deal in CoStar’s hometown of Washington, D.C. would have cost three times as much as in Richmond, Florance said.
He said Richmond’s office market is similar to other cities around the country that have a big supply of “second generation space.”
“It’s not a super tight market,” he said of Richmond. “It’s more of a tenant’s market.”
For the Charlotte deal CoStar considered, there would have been a bigger capital investment for the firm to move into a space that is still under construction. Kansas City had a building that was not quite big enough for what CoStar was looking for.
Add to that, Florance said, the quality of the nine-story WestRock building, which was built in 2008 and boasts one of the better river views downtown.
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