PRESS RELEASE DETAIL


Jul 27, 2010

CoStar Group to Introduce Industry's First Comprehensive Repeat Sales Index for Commercial Real Estate

2010-07-27 2010 CoStar Group to Introduce Industry's First Comprehensive Repeat Sales Index for Commercial Real Estate New Economic Index to Fill Void in Analysis of C...

2010-07-27 2010 CoStar Group to Introduce Industry's First Comprehensive Repeat Sales Index for Commercial Real Estate New Economic Index to Fill Void in Analysis of Commercial Real Estate Industry

BETHESDA, Md., July 27, 2010 -- CoStar Group, Inc. (Nasdaq:CSGP) announced that the company is launching the CoStar Commercial Repeat Sales Index (CCRSI), a measure that is intended to provide consistent and timely information to help answer some of the fundamental economic questions regarding the commercial real estate (CRE) industry, including, "Are prices climbing or falling?" and "On a month-to-month basis are property values going up or down?"

In the last two decades, repeat-sale regression has become increasingly accepted as the most clear-cut and rigorous method to meet investors' requirements for understanding price movement. The repeat-sale analysis, based on CRE properties that have sold more than once without a significant change in building characteristics between sales, is fundamentally comparable to stock and bond indices, based on same-stock (or bond) price changes from one period to the next. In residential real estate, the most well-known repeat-sale index is the S&P/Case-Shiller home price index. Not only has it become the barometer of the health of the nation's housing market, it has also been used by the Chicago Mercantile Exchange to support and facilitate derivatives trading against housing.

"Currently, there are no effective, non-biased indices to measure commercial real estate price movements, and even less comparative information by property type or geographies," said Andrew Florance, Chief Executive Officer of CoStar Group. "In response to this void, we've developed the CoStar Commercial Repeat Sales Index to provide a comprehensive set of benchmarks that investors and other market participants can use to better understand and predict CRE price movements."

CoStar has identified more than 85,000 repeat sale pairs in its U.S. database, which we believe is the largest and most comprehensive comparable sales database in the U.S. commercial real estate industry. We have constructed more than two dozen sub indices using the unique breadth of CoStar's property and comparable sales data.

 


National
Composite CRE
Price Index


National Indices
by Property
Type*


Regional Indices*


Regional Indices
by Property
Type


Top Ten Metro
Market Indices
by Property
Type

 
 

 

General Commercial

 

Office

 

Northeast

Northeast: Office, Multi-Family, Industrial, Retail

 

Office

 
 

 

All

 

Retail

 

Midwest

Midwest: Office, Multi-Family, Industrial, Retail

 

Multi-Family

 
 

 

Investment Grade

 

Industrial

 

South

South: Office, Multi-Family, Industrial, Retail

 

Industrial

 
 

 

 

Multi-Family

 

West

West: Office, Multi-Family, Industrial, Retail

 

Retail

 

*Available in both equal weighted and value weighted               

"An accurate measure of real estate price changes is a critical component to understanding investment or market performance. With commonly used average, median price and price per square foot indices, there are no controls for the ever-changing mix of properties sold during different time periods," added Florance. "Therefore, we do not believe average or median price indices per square foot are useful for rigorous analysis of market cycles. Appraisal-based indices are ineffective because they introduce lag and bias and minimum price cut indices are a circular reference in that they use price to define price."

By covering all levels and all types of CRE transactions, and by using well-tested available methodologies, we believe that CoStar's indices will provide one of the most comprehensive benchmarks for tracking and analyzing CRE price movements to date. CoStar Group expects to release the initial CoStar Commercial Repeat Sales Index on August 4th and plans to provide updates the first Wednesday of each month to serve as timely indicators of the overall health of the commercial real estate industry.

About CoStar Group, Inc.

CoStar Group, Inc. (Nasdaq:CSGP - News) is the number one provider of information, marketing and analytic services to commercial real estate professionals in the United States as well as the United Kingdom. CoStar's suite of services offers customers access via the Internet to the most comprehensive database of commercial real estate information throughout the U.S. as well as in the United Kingdom and France. Headquartered in Bethesda, Md., CoStar has approximately 1,500 people working for the company worldwide, including the largest professional research organization in the industry. For more information, visit http://www.costar.com.

This news release includes "forward-looking statements" including, without limitation, statements regarding CoStar's expectations, beliefs, intentions or strategies regarding the future. These statements are subject to many risks and uncertainties that could cause actual results to differ materially from these statements. More information about potential factors that could cause actual results to differ materially from those discussed in the forward-looking statements include, but are not limited to, those stated in CoStar's filings from time to time with the Securities and Exchange Commission, including CoStar's Form 10-K for the year ended December 31, 2009, and CoStar's Form 10-Q for the quarter ended June 30, 2010, under the heading "Risk Factors." In addition to these statements, there can be no assurance that the CCRSI will help answer the fundamental economic questions regarding the commercial real estate industry; that the CCRSI will provide a comprehensive set of benchmarks that investors and other market participants can use to better understand and predict CRE price movements; that CoStar's indices will provide one of the most comprehensive benchmarks for tracking and analyzing CRE price movements to date; that the CCRSI will be released on the date and updated on the frequency set forth in the release; and that CoStar's indices will serve as timely indicators of the overall health of the commercial real estate industry. All forward-looking statements are based on information available to CoStar on the date hereof, and CoStar assumes no obligation to update such statements.
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