Photo courtesy CoStar Group
While the COVID-19 pandemic caused many companies to downsize their offices, CoStar is doubling down. In November, the real estate data company broke ground on a $460 million research hub adjacent to its current Fifth Street office in Richmond. Rising 21 stories, the main tower would be the second-tallest building downtown. CoStar has already begun hiring 2,000 more employees, for a total of 3,500 Richmond-based staff members.
“A company who analyzes real estate data for a living made a 1 million-square-foot bet on Richmond,” says Jennifer Wakefield, president and CEO of the Greater Richmond Partnership, an economic development group for Richmond and Chesterfield, Hanover and Henrico counties. “They’ve really prioritized creating cool spaces to work.”
CoStar was accepted into the S&P 500 Index in September and was among Fortune magazine’s top 100 fastest-growing companies in 2020. Most of its new hires in Richmond will be for entry-level positions in software development, analytics, operations and engineering, with an average compensation of $100,000. To sweeten the pot, CoStar is building spaces to encourage in-office work with free amenities such as a gym, yoga classes, coffee stations, a cafeteria and more.
We’re always trying to find the best talent ... and create an environment where they want to come work.
—Andy Florance, CoStar CEO
“We’re always trying to find the best talent and super-bright people and create an environment where they want to come work,” says CoStar CEO Andy Florance. “It’s an investment on our part and pays back in productivity. I think we will outperform, out-innovate and out-recruit our competitors whose employees are completely remote.”
Florance founded CoStar in 1987 and now oversees such entities as Apartments.com, LoopNet, STR and HomeSnap. Based in Washington, D.C., and boasting 80 offices and 5,300 employees worldwide, CoStar came to Richmond in 2016, purchasing the WestRock building and renovating spaces to accommodate employees. “My office had these high ceilings, balconies and really beautiful views of the river, and I thought, ‘Instead of using it as the executive suite, this would be nicer as a common area,’” Florance says.
That space, today known as “The Barn,” is a hangout for CoStar employees. Inspired by bucolic Virginia barns and Southern front-porch living, the space includes rocking chairs, a painted blue ceiling, rustic tables and sound panels reminiscent of leaves. After work, staff members host happy hours, concerts and gatherings there. Florance says they’re modeling common spaces in the new buildings after The Barn and adding even more amenities.
“The most wonderful thing is the location right at the fall line of the James River,” Florance says. “That’s why Richmond is here, where the smooth water became rapids. We’re lucky to have this land.”
Taking advantage of its location, CoStar’s new main tower, which is being built to be certified LEED Platinum, the highest rating by the U.S. Green Building Council, and its five-story multipurpose building will incorporate outdoor classrooms, dozens of terraces and balconies, a courtyard, a winter garden, and nearly 3 acres of green space. Several retailers, as well as indoor-outdoor restaurants, including a craft brewery, will be available to employees and the public. Team members can easily take a walk around nearby Brown’s Island, and those living in Manchester can cross the pedestrian bridge to work or dine. A new amphitheater will accommodate special events and serve as a venue during the Richmond Folk Festival. The campus will also serve as a training site for the company’s large fleet of drone pilots. Completion of the project is slated for 2025.
Wakefield says CoStar will be recruiting employees locally as well as from outside markets. In addition, CoStar is partnering with the VCU School of Business to cultivate future talent.
“People are moving to Richmond for the higher quality of life,” she says. “One new employee told me he went from sharing an apartment the size of a closet with three other people to buying his own house in Richmond.”
Florance says investing in downtown Richmond is important to the company, especially because of its place in the commercial real estate world. “We understand better than most what happens if you abandon the cities,” Florance says. “Washington, D.C., has dispersed their workforce, and they’re in serious trouble. There’s not the same tax base. Buildings are in financial trouble.”
According to the U.S. Census Bureau, more than 48% of D.C. employees worked from home in 2021, the highest percentage of home-based workers among states and state equivalents. The number of people primarily working from home nationwide tripled between 2019 and 2021 from 9 million to nearly 28 million — representing about 18% of the workforce.
Wakefield says more people are returning to work in Richmond than in peer markets. A study by Kastle Systems, using keycard data from 41,000 offices it secures nationwide, indicates that Richmond occupancy rates are higher than in D.C., Atlanta, Boston, Philadelphia, New York and Austin, among others. “There’s not the rat race here — we don’t have these crazy commutes, and you really can get anywhere in 20 minutes,” she says.
But Richmond employees aren’t necessarily going into the office every day. “While there’s nothing like being in person, people really liked the flexibility from the pandemic, so many companies are doing a hybrid model, a mix of remote and in-person work,” Wakefield says.
While Florance prefers his staff in the office, CoStar gives employees the option to work remotely on Fridays. He says that, with more than 1,000 new hires in 2022 alone, in-person orientation and mentorships are imperative to flattening the learning curve, strengthening relationships and growing the company culture.
“We are 100% back, and it’s become obvious that we did the right thing,” he says. “Employee retention is the highest it’s ever been. We’re not having the ‘great resignation’ that others are having. Employees aren’t sitting at their parents’ kitchen table or in an attic somewhere — the people we hire are bringing energy, interacting with each other and having fun.”
