Accusations, Arson and Intrigue at CoStar as Office Attack Follows Employee Revelations

A suspect of an arson attack has been detained by police at the offices of American commercial real estate and data specialist CoStar.

According to local news reports, two cars, one a Tesla Model S belonging to an unnamed company executive, were set on fire on Wednesday afternoon at the company's offices in Richmond, Virginia. Law enforcement officers subsequently apprehended a suspect two blocks away. Fortunately, nobody was injured in the incident.

The events took place just hours after Business Insider released a story citing 29 current and former CoStar employees claiming that the company has a toxic work culture and on the same day that CoStar released its results for FY21.

The unsavoury accusations levelled against the company in the BI article include micro-management, surveillance and dismissal for minor offences. The article claimed that CoStar lost 37% of its roughly 4,200 employees over the course of 2021, with 75% leaving of their own accord - a figure above the average for similar companies.

There were also claims that the company was attempting to massage its score on the popular workplace evaluation platform Glassdoor (coincidently founded by CoStar's public enemy #1, Rich Barton of Zillow). CoStar's rating as an employer on Glassdoor stands at 2.9, well below the 3.7 average, with many opinions left by employees complaining about the rigid office culture.

In a response, CoStar refuted the claim that it was losing staff at a rate above the industry average and seemed unrepentant in a statement:

“[CoStar] will not apologize for these standards, nor will we compromise them to accommodate a vocal few who decide that this level of expectation is not for them”.

The company also called into question the standards of reporting of the BI journalists who worked on the story with CoStar's CEO Andy Florance calling it a “sensationalized story that grossly mischaracterizes the employee experience”. Business Insider has since come out and backed its journalists with a spokesperson saying “We stand by our reporting”.

Following Wednesday's events, there is now intrigue attached to comments made by Florance hours before the attack in which CoStar's founder and CEO expressed concerns about Nate Peterson, a former employee who runs a popular Instagram account poking fun at the company.

“I am sorry he is in such a dark place, and I hope he can find a more positive purpose. Some have expressed concerns that this person may pose a security risk. As a result, we have increased our security at the Richmond facility.”

Alongside all the anti-CoStar and anti-Florance memes, Peterson's Instagram account featured a statement on Thursday morning which read:

"I just want to state for the record unequivocally that I do not advocate violence against CoStar or any CoStar personnel.”

The fallout from the incident and the negative headlines being generated are the last things that the company needs at a time when its shares (which until 2021 was a darling of investors) have seen major recent losses. The market's initial reaction to the company's FY21 results saw CoStar's share price drop dramatically from $63 to $49. The price has since recovered to $60 at the time of writing.

Source, Google Finance