Latest CoStar CCRSI Analysis: Pricing Recovery for Commercial Property Continues in February Despite Seasonal Volatility

Latest CoStar CCRSI Analysis: Pricing Recovery for Commercial Property
Continues in February Despite Seasonal Volatility

While Broader Indices Gave Back Some Gains From 2012, Advances in the
Investment Grade Segment, Along With Improving Market Fundamentals, Signal
Positive Shift in Pricing Momentum Going Forward

WASHINGTON, April 17, 2013 (GLOBE NEWSWIRE) -- This month's CoStar Commercial
Repeat Sale Indices (CCRSI) provide the market's first look at February 2013
commercial real estate pricing. Based on 722 repeat sales in February 2013 and
more than 100,000 repeat sales since 1996, the CCRSI offers the broadest
measure of commercial real estate repeat sales activity.

February 2013 CCRSI National Results Highlights

    measures of aggregate pricing for commercial properties within the
    CCRSI—the value-weighted U.S. Composite Index and the equal-weighted U.S.
    Composite Index—dipped by 0.7% and 1.4%, respectively, in the month of
    February 2013, reflecting a continuation of a seasonal pattern first
    observed in January, in which commercial real estate prices gave back some
    of the pricing gains from the surge in sales activity at the close of
    2012. Despite the recent seasonal dip in activity, commercial real estate
    prices are still up significantly from year ago levels. The equal-weighted
    index increased 6.0% since February 2012, while value-weighted index
    expanded by 5.1% during the same period.
    equal-weighted version of the U.S. Composite Index, which weights each
    repeat-sale equally and therefore reflects the influence of smaller
    transactions, the Investment Grade segment was the first to shake off the
    seasonal slump of the previous months and increased 1.9% in February 2013.
    Following a spike in the investment grade pricing last year, the index
    gave back some of those earlier gains.However, with the February 2013
    pricing gains, the Investment Grade segment has now recovered by 17.9%
    since prices reached a trough in October 2009. Pricing in the General
    Commercial segment has taken longer to recover, but it is now up nearly 6%
    from its recent nadir in the first quarter of 2011 as real estate
    investment activity has increasingly fanned out into more secondary
    markets and property types.
    performance of the General Commercial and Investment Grade indices is tied
    to market fundamentals. Net absorption of available space for the three
    major property types – office, retail, and industrial – has been positive
    over the past three years. However, for the majority of that period,
    absorption has been stronger among properties in the Investment Grade
    segment as reflected by the faster pricing growth in this index since
    2009. More recently though, the General Commercial segment has posted more
    robust gains in absorption as well, indicating a broader and more
    sustained commercial real estate recovery.
    end-year spike in December 2012 when repeat sale transaction volume
    reached a new record high, transaction volume of $2.9 billion for the
    month of February 2013 was in line with first quarter average monthly
    totals over the previous two years.
    commercial property selling at distressed prices dropped to 15.9% in
    February 2013 from over 18% for the previous month.

Monthly CCRSI Results, Data through February 2013

                               1 Month    1 Quarter    1 Year    Trough to
                                Earlier    Earlier      Earlier   Current
Value-Weighted U.S. Composite   -0.7%      -0.3%        5.1%      36.7%^1
Equal-Weighted U.S. Composite   -1.4%      -3.1%        6.0%      7.1%^2
U.S. Investment Grade Index    1.9%       0.6%         8.6%      17.9%^3
U.S. General Commercial Index  -1.8%      -3.7%        5.7%      6.0%^4
^1 Trough Date: January, 2010^2 Trough Date: March, 2011^3 Trough Date:
October, 2009^4 Trough Date: March, 2011

Monthly Fundamentals, Data through March of 2013

                        Net Absorption (in millions of square feet)
                        2011            2012           2013Q1
Aggregate                292.7            315.0           87.8
Investment Grade         207.1            226.5           56.9
General Commercial      85.6             88.6            30.9
Note: "Net Absorption" is the change in occupied space, calculated based on
three types of properties: office, retail, and industrial.

^Several charts accompanying this releaseare available at

About the CoStar Commercial Repeat-Sale Indices

The CoStar Commercial Repeat-Sale Indices (CCRSI) are the most comprehensive
and accurate measures of commercial real estate prices in the United States.
In addition to the national Composite Index (presented in both equal-weighted
and value-weighted versions), national Investment Grade Index and national
General Commercial Index, which we report monthly, we report quarterly on 30
sub-indices in the CoStar index family. The sub-indices include breakdowns by
property sector (office, industrial, retail, multifamily, hospitality and
land), by region of the country (Northeast, South, Midwest, West), by
transaction size and quality (general commercial, investment grade), and by
market size (composite index of the prime market areas in the country).

The CoStar indices are constructed using a repeat sales methodology, widely
considered the most accurate measure of price changes for real estate. This
methodology measures the movement in the prices of commercial properties by
collecting data on actual transaction prices. When a property is sold more
than one time, a sales pair is created. The prices from the first and second
sales are then used to calculate price movement for the property. The
aggregated price changes from all of the sales pairs are used to create a
price index.

More charts accompanying this release are available at


For more information about the CCRSI Indices, including a detailed
methodology, fact sheet, legal notices and disclaimer, and an archive of
previous releases, please visit


CoStar Group (Nasdaq:CSGP) is commercial real estate's leading provider of
information, analytics and marketing services. Founded in 1987, CoStar
conducts expansive, ongoing research to produce and maintain the largest and
most comprehensive database of commercial real estate information. Our suite
of online services enables clients to analyze, interpret and gain unmatched
insight on commercial property values, market conditions and current
availabilities. Through LoopNet, the Company operates the most heavily
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unique monthly visitors in aggregate. Headquartered in Washington, DC, CoStar
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largest professional research organization. For more information, visit

This news release includes "forward-looking statements" including, without
limitation, statements regarding CoStar's plans, objectives, expectations,
beliefs, intentions or strategies regarding the future. These statements are
based upon the current beliefs and expectations of management of CoStar and
are subject to many risks and uncertainties that could cause actual results to
differ materially from these statements. The following factors, among others,
could cause or contribute to such differences: the risk that the trends
represented or implied by the indices will not continue or produce the results
suggested by such trends; the risk that investor demand and commercial real
estate pricing levels will not continue at the levels or with the trends
indicated in this release; the risk that pricing momentum will not shift as
expected; and the possibility that a sustained commercial real estate recovery
will not be realized as expected.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, 2012,
under the heading "Risk Factors."All forward-looking statements are based on
information available to CoStar on the date hereof, and CoStar does not
undertake any obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise.

         Richard Simonelli
         Director of Investor Relations
         (202) 346-6394
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