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PEOPLE REAL ESTATE S


Profile of Andrew Florance, founder and CEO CoStar Group Inc., Washington, D.C.


Creating relationships


CoStar CEO wants to recruit and retain real estate researchers by Robert Po well


A


ndrew Florance was faced with a choice as he was finishing his undergraduate degree at Prince -


ton University 30 years ago. He could go on to graduate school or he could pursue his dream of using new technology to create a commercial real estate research company. Florance had hatched that business


plan while working as a summer intern with a Washington, D.C., real estate firm. He watched as company employees made financial projections on a new office building in pencil on a 24-by- 18-inch spreadsheet. Why, he wondered, didn’t they take advantage of personal computers, which had recently appeared on the market? “That was a real eye-opener. I knew


that people were leasing real estate, buy- ing and selling and valuing real estate, all by manual processes,” Florance says. “I thought that was a huge opportunity. I actually started working out of my college dorm my senior year, writing software to basically manage [real estate] information.” But a real estate professor Florance


consulted didn’t think much of his idea of starting a research company, urging him to go to graduate school and become a developer. Florance ignored that advice and started CoStar Group Inc. Now, that professor’s son man-


ages an investment fund that is one of CoStar’s major investors. “I love the fact that this professor who said I’ve got the stupidest idea in the world has a son who is a fund manager with $400 million of our stock,” Florance says.


66 JANUARY 2017 Forbes magazine has called Wash-


ington, D.C.-based CoStar one of the “100 Most Innovative Growth Compa- nies.” Fortune magazine identified it as one of the nation’s “100 Fastest Growing Companies.” Soon, CoStar will become a


major employer in Richmond. In late October, the company announced it will spend $8.2 million to establish a 125,000-square-foot research operations headquarters in four floors of a nine- story building on the banks of the James River. CoStar eventually will employ about


730 people in the building, which it will share with WestRock Co., a packaging company formed in the 2015 merger of Richmond-based MeadWestvaco and Georgia-based Rock-Tenn Co. The CoStar project is expected to pump $250 million into the Richmond regional economy. CoStar currently employs about


3,300 people worldwide. Customers use its data to buy or lease real estate or find information about office, industrial and retail properties. The company, which also owns the apartment listing website Apartments.com, generated revenue of $711.8 million in 2015. CoStar picked Richmond for the


research center after a yearlong search involving 20 cities around the country. Kansas City, Mo., and Charlotte, N.C., were the other finalists. Important factors in the decision


were the area’s cost of living, quality of life and the proximity of a number of universities. The company seeks a highly


CoStar Group CEO Andrew Florance started writing the software for his commercial real estate research fi rm when he was a senior in college.


educated workforce, and it hopes to work with schools as research partners. Most of all, Florance wants


Richmond employees to stay with the company, establishing long-term rela- tionships with its customers. “Our clients feel like they invest in our researchers,” he says. In addition to guiding CoStar,


Florance serves on the board of directors of the American Real Estate Society and Walker & Dunlop Inc., one of the largest commercial real estate finance companies in the U.S. The Office of the Mayor in the District of Columbia recently named him to a task force reviewing D.C.’s use of real estate. Virginia Business editors Robert


Powell and Paula Squires interviewed Florance at its offices in October. The following is an edited transcript.


Photo by Mark Rhodes


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