Latest CoStar CCRSI Analysis: Commercial Real Estate Prices Shake Off Effects of First Quarter Seasonal Slowdown With Strong

Latest CoStar CCRSI Analysis: Commercial Real Estate Prices Shake Off Effects
of First Quarter Seasonal Slowdown With Strong Showing in April

Broad-Based Pricing Recovery Supported by Improved Market Liquidity

WASHINGTON, June 12, 2013 (GLOBE NEWSWIRE) -- This month's CoStar Commercial
Repeat Sale Indices (CCRSI) provide the market's first look at April 2013
commercial real estate pricing. Based on 1,045 repeat sales in April 2013 and
more than 125,000 repeat sales since 1996, the CCRSI offers the broadest
measure of commercial real estate repeat sales activity.


April 2013 CCRSI National Results Highlights

  *COMMERCIAL REAL ESTATE PRICE RECOVERY REGAINED MOMENTUM IN APRIL: As the
    effects of the first quarter seasonal slowdown in investment activity
    subsided, commercial real estate prices advanced across the board in April
    2013. The two broadest measures of aggregate pricing for commercial
    properties within the CCRSI—the equal-weighted U.S. Composite Index and
    the value-weighted U.S. Composite Index—each posted solid monthly gains in
    April of 1.9% and 1.1%, respectively, which reflects improvement in market
    fundamentals across the major CRE property types. The two components of
    the equal-weighted U.S. Composite Index (the Investment Grade and General
    Commercial indices) also made substantial gains in April 2013, signifying
    an extension of the recovery in commercial property pricing to more
    secondary property types and markets.
    
  *INVESTMENT GRADE SEGMENT POSTS STRONG MONTHLY GAIN: Within the
    equal-weighted index, the Investment Grade segment of the market surged
    ahead by 4.1% in April 2013, more than offsetting the losses from the
    first quarter of 2013, and closing the month 1% above pricing levels for
    this segment in December 2012. The office, retail and warehouse sectors
    drove the strongest gains in the Investment Grade segment, indicating the
    price recovery has expanded beyond the multifamily sector. Prices for
    multifamily property, which were the first to rise coming out of the
    downturn, have stagnated recently as rising construction and near-peak
    pricing in primary markets have taken a toll on overall pricing gains. The
    General Commercial Index also posted positive gains in April 2013, albeit
    less pronounced than its Investment Grade counterpart.
    
  *LIQUIDITY INDICATORS ALSO IMPROVING:Transaction volume of repeat sales
    increased 25% from the average over the first three months of 2013 to $5.1
    billion in April 2013. Meanwhile, the average time on market for
    commercial properties listed for sale fell 5.1% in April 2013 from its
    peak one year ago, and the gap between initial asking and final sales
    price has narrowed by almost 2.2% from year-ago levels. Also, the fewer
    number of properties withdrawn from the market by discouraged sellers is
    another indication of improving investor sentiment. The number of
    properties withdrawn from the market in April 2013 declined 5.8% from the
    prior year. The improvement indicates a virtuous cycle necessary for
    sustained recovery. As the pricing recovery encourages lending and capital
    inflows, a more liquid and efficient market is expected to support further
    advances in pricing.
    
  *DISTRESS SALES FALL TO LOWEST LEVEL SINCE 2008: The percentage of
    commercial property selling at distressed prices tumbled to 13.2% in April
    2013, 64% lower than the peak level observed in March 2011. This reduction
    in distressed deal volume has supported higher, more consistent pricing
    and enhanced market liquidity by giving buyers greater confidence to do
    deals.
    
  *Monthly CCRSI Results, Data through April of 2013

                            1 Month     1 Quarter     1 Year     Trough to
                             Earlier     Earlier       Earlier    Current
Value-Weighted U.S.          1.1%        1.8%          10.8%      40.9%^1
Composite Index
Equal-Weighted U.S.          1.9%        -0.2%         6.3%       8.0%^2
Composite Index
U.S. Investment Grade Index 4.1%        3.4%          8.5%       19.7%^3
U.S. General Commercial     1.7%        -0.8%         5.8%       6.9%^4
Index
^1 Trough Date: January, 2010 ^2 Trough Date: March, 2011 ^3 Trough Date:
October, 2009^4 Trough Date: March, 2011

                                                                         
Monthly Liquidity Indicators, Data through April of 2013 ^1              
                       Current    1 Month    1 Quarter     1 Year
                                   Earlier    Earlier       Earlier
Days on Market          415        408        428           432
Sale Price-to-Asking    87.4%      87.1%      86.4%         85.3%
Price Ratio
Withdrawal Rate         41.1%      41.6%      43.2%         46.9%
                                                        
^1 Average days on market and sale price-to-asking price ratio are
both calculated based on listings that are closed and confirmed by the
CoStar research team. Withdrawal rate is the ratio of listings that       
are withdrawn from the market by the seller relative to all listings
for a given month.

A chart accompanying this releaseis available at
http://media.globenewswire.com/cache/9473/file/20255.pdf

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
http://media.globenewswire.com/cache/9473/file/20256.pdf

CONTACT:

For more information about CCRSI Indices, including our legal notices and
disclaimer, please visit http://www.costar.com/ccrsi.

ABOUT COSTAR GROUP, INC.

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
trafficked commercial real estate marketplace online with more than 7 million
registered members. CoStar operates websites that have approximately 10
million unique monthly visitors in aggregate.Headquartered in Washington, DC,
CoStar maintains offices throughout the U.S. and in Europe with a staff of
approximately 2,000 worldwide, including the industry's largest professional
research organization. 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 based upon current
beliefs 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, including without limitation a
sustained recovery; the risk that investor sentiment and demand and commercial
real estate pricing levels will not continue at the levels or with the trends
indicated in this release; and the possibility that the pricing recovery does
not continue to encourage lending and capital inflows or that a more liquid
and efficient market will not support further advances in pricing. 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 Annual Report on
Form 10-K for the year ended December 31, 2012, and CoStar's Quarterly Report
on Form 10-Q for the quarter ended March 31, 2013, under the heading "Risk
Factors" in each of these filings. All forward-looking statements are based on
information available to CoStar on the date hereof, and CoStar assumes no
obligation to update such statements, whether as a result of new information,
future events or otherwise.

CONTACT: Mark Klionsky
         Senior Vice President-Marketing
         (800) 681-1513
         mklionsky@costar.com
 
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