CoStar picks Richmond for new research center

A powerhouse in the commercial real estate industry tapped Richmond for its new operations and global research center last week. It is slated to bring 732 jobs to the region along with it.

Andrew C. Florance, founder and CEO of CoStar Group, a Washington, D.C.-based research and analytics firm and owner of Apartments.com, joined Gov. Terry McAuliffe and Mayor Dwight C. Jones at the state Capitol last Monday to announce the decision.

Florance explained the decision to tap Richmond stemmed from its low traffic congestion, cost of living, and the presence of institutions of higher education such as Virginia Commonwealth University, University of Richmond, and Virginia Union University.

“The CoStar team couldn’t be more excited about the expansion into Richmond and connecting with the community on a deeper level,” the company said in a statement.

Florance told the Washington Business Journal the company’s national search eventually narrowed down to Richmond, Charlotte, N.C., and Kansas City, Mo. CoStar expanded its operations in Atlanta as recently as last year, adding hundreds of tech jobs.

Forbes magazine recently dubbed CoStar one of the 100 Most Innovative Growth Companies.

Just two weeks ago, Fortune declared it one the 100 Fastest Growing Companies nationwide.

Florance told the Times-Dispatch approximately 85-percent of all commercial real estate transactions now filter through CoStar’s system.

As part of the announcement, McAuliffe presented the the city with a $4-million check from the Commonwealth’s Opportunity Fund, which the city plans to match by offering CoStar tax incentives and funding improvements for downtown infrastructure and jobs training.

“I would just like to say to the few states to the southeast and the midwest that could not rise to everything that we have here obviously in the Commonwealth of Virginia,” said McAuliffe.

He said the state places second in the country for technology workers, with 172,000 residents in the sector, and houses more data centers than any other state in the country.

But the announcement that CoStar picked the capital of its neighboring Virginia over Charlotte surprised and even angered some of those involved in the Charlotte bid.

“The primary reason they chose Richmond over Charlotte was HB2,” said David Dorsch, senior vice president at Cushman & Wakefield’s Charlotte office, in a statement to the Charlotte Business Journal.

CoStar wouldn’t comment on whether or not controversial N.C. state law House Bill 2 (or HB2) factored into the decision, but they did respond to a previous inquiry by the Charlotte Observer.

“We will not comment on Charlotte,” read the statement. “We will affirm LGBT rights and the rights of every one of our employees and those in the community are a very high priority and core to our firm’s values.”

Florance said in an interview with the Times-Dispatch that the company looks forward to being an “engaged corporate citizen.”

But CoStar wouldn’t comment on whether or not that role will include lobbying for state-level protections for LGBTQ folks against housing, private-sector employment, or public accommodation discrimination, all of which are currently legal in the state of Virginia.

They said that role would be more geared towards supporting economic development in the city, as well as providing “volunteer opportunities for employees and (investing) time and resources into local education, healthcare and sustainability.”

CoStar is already in communication with VCU about recruiting opportunities for young researchers.

“VCU has a strong real estate track in the business school and CoStar is currently exploring ways to support the endeavors of those students,” the company said in a statement.

But those opportunities extend beyond the real estate track.

A promotional video highlighting members of the CoStar research operations team was posted to the company’s Richmond recruiting website. It features Erica Doll, who graduated from VCU in 2010 with degrees in Criminal Justice and Psychology, and a minor in Forensic Science.

“So not exactly commercial real estate,” says Doll, laughing.

CoStar plans to move into the top two floors of the WestRock office building on S. 5th St. by the end of November, occupy the third within six months, the fourth within a year, and hire people as space permits.

Jim Thomma, Contributing Writer