CoStar Group Board of Directors Chairman Adopts 10b5-1 Trading Plan.

Business Editors

BETHESDA, Md.--(BUSINESS WIRE)--Sept. 3, 2002

CoStar Group, Inc. (NASDAQ:CSGP), the leading provider of information services to the U.S. commercial real estate industry, today announced that Michael R. Klein, the Chairman of the Board of Directors of CoStar Group, has adopted a prearranged trading plan covering a portion of his holdings in CoStar Group common stock. The plan was adopted in accordance with the Securities and Exchange Commission Rule 10b5-1.

Rule 10b5-1 of the Securities and Exchange Act of 1934 permits officers and directors of public companies to adopt predetermined written plans for trading specified amounts of company stock. The plans may be implemented only when the director or officer is not in possession of material nonpublic information, and may be used in order to gradually diversify their investment portfolio, to minimize the market effect of stock sales by spreading them out over an extended period of time, and to avoid concerns about initiating stock transactions while in possession of material nonpublic information.

The 10b5-1 plan adopted by Mr. Klein involves an order to sell between 500 and 1,000 shares of common stock of CoStar Group every trading day if the stock price for CoStar stock is above a predetermined amount. The plan will expire on December 31, 2003.

Mr. Klein, age 60, currently owns over 1.5 million shares of CoStar common stock and, as a co-founder of CoStar, has invested in CoStar for 15 years. Mr. Klein is not an executive officer of the company. Mr. Klein established the 10b5-1 Plan to allow him to gradually reduce his holdings of CoStar stock by 10-15%, so that he can fulfill charitable and other commitments, and somewhat diversify his investments, at a daily rate that is modest relative to both his holdings in CoStar and the average trading volume of CoStar stock. Mr. Klein's intent is that such a sales pattern would not adversely affect the trading value of the CoStar stock.

About CoStar Group, Inc.

Headquartered in Bethesda, Md., CoStar Group, Inc. (NASDAQ: CSGP), is the leading provider of information services to the U.S. commercial real estate industry. CoStar's suite of products offers customers access to the most comprehensive, verified database of commercial real estate information in over 50 U.S. markets. The company has approximately 800 employees and contractors nationally in 30 offices, including the industry's largest professional research organization.

This news release includes "forward-looking statements," which involve many risks and uncertainties that could cause actual results to differ materially from these statements. Factors that could cause or contribute to such differences include, but are not limited to, those stated in CoStar's Form 10-Q for the quarter ended June 30, 2002, under the heading "Risk Factors." All forward-looking statements are based on information available to CoStar on the date hereof, and CoStar assumes no obligation to update such statements.