CoStar Commercial MLS Drives Record New Listings and Internet Traffic for Company

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Company now lists 1.9 million properties with over 400,000 commercial property listings.

CoStar Group, Inc. (NASDAQ: CSGP), the leading provider of information services to the commercial real estate industry, today announced that its newest service, CoStar Commercial MLS™, has driven a record-setting surge of new users, listings and Internet traffic to the company’s web site http://www.CoStar.com.

Launched at the end of November 2005 with two strategic objectives – to capture individual users and to create a new, highly efficient e-commerce channel – over 20,000 people have registered for CoStar Commercial MLS in the past 90 days. With over 110,000 for-sale listings covering office, industrial, retail, shopping centers, land, hospitality and multi-family properties, we believe it is the nation’s largest available collection of researched and verified commercial property for-sale listings.

“CoStar Commercial MLS is doing even better than we expected,” said Andrew C. Florance, president and CEO of CoStar Group. “As a result, we’re seeing an unprecedented increase in traffic to our Web site and a sharp increase in new for-sale listings being added to our database.”

Building upon the value of 1.9 million commercial properties that CoStar lists in its database, the CoStar Commercial MLS product is the latest in the evolution of the company’s suite of online services. As usage of CoStar’s products continues to surge, the number of active listings – currently at well over 400,000 – also continues to grow.

The increase in traffic to http://www.CoStar.com is a clear indication of what we believe is a growing base of potential new customers. According to Internet traffic rankings by Alexa, CoStar’s Traffic Rank increased by 15,203 positions in the last three months. During the same time frame, according to Alexa, the Traffic Rank for two other services, LoopNet and CityFeet, has dropped by 146 and 884 positions, respectively. Traffic to a popular industry website - CBRE.com - was also up 2,733 positions during the same three month period.

Potential customers for CoStar Commercial MLS include Commercial Real Estate professionals in smaller brokerage companies, single practitioners, and residential agents interested in earning commissions selling commercial property. CoStar believes the market opportunity is quite significant since there are over 1.2 million members of the National Association of Realtors alone. After expiration of an initial free introductory period, CoStar Commercial MLS will cost only $19.95 per month.

“We now have a high-value, low-cost product with researched data and high-quality images that is absolutely stunning. We believe this product meets the needs of hundreds of thousands of smaller brokerages, sole practitioners and residential agents that have been starved of researched and verified information for decades,” said Florance. “The Internet provides a very cost effective way to reach them, and we believe this sales model has significant long-term potential for us.”

Added Florance, “We’ve worked very hard during 2005 to grow our services and expand our market coverage.” CoStar has now registered over 1.8 million people associated with commercial real estate within its databases. The Company believes that its Q4 2005 renewal rate of 94.4% is assurance that its customers value these efforts.”

About CoStar Group, Inc.

CoStar Group, Inc. (NASDAQ: CSGP) is the leading provider of information services to commercial real estate professionals in the United States and the United Kingdom. CoStar's suite of services offers customers access via the Internet to the most comprehensive database of commercial real estate information on 66 major U.S. markets and the United Kingdom. Based in Bethesda, MD, the Company has approximately 1,000 employees throughout the United States and the United Kingdom, including the largest professional research organization in the industry.

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 assumptions, risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking 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-Q for the period ended September 30, 2005, under the heading “Risk Factors.” In addition to these statements, there can be no assurance that CoStar Commercial MLS will continue to result in a surge of new users, new for-sale listings and record Internet traffic to CoStar.com, that CoStar Commercial MLS is the largest available collection of researched and verified commercial for-sale property listings, that the surge in usage of CoStar’s products will continue or that the number of active listings will continue to grow, that increased Internet traffic indicates a growing base of potential new customers, that the makeup of CoStar Commercial MLS users and number of members of the National Association of Realtors stated in this press release indicates significant market opportunity for CoStar, that CoStar Commercial MLS will meet the needs of hundreds of thousands of smaller brokerages, sole practitioners and residential agents, that the CoStar Commercial MLS sales model is cost-effective or has significant long-term potential for CoStar, or that the Company’s fourth quarter 2005 renewal rate is assurance that its customers value these efforts. All forward-looking statements are based on information available to CoStar on the date hereof, and CoStar assumes no obligation to update such statements.

Contact:

Henry Stoever

Vice President, Marketing

301-280-8336

http://www.costar.com

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Henry Stoever
CoStar Group, Inc.
301-280-8336
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