COSTAR GROUP, INC. — Capital/Financing Update 2011

May 25, 2011

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Filed Pursuant to Rule 433 Issuer Free Writing Prospectus dated May 25, 2011 Relating to Preliminary Prospectus Supplement dated May 23, 2011 Registration Statement No. 333-174407

Pricing Term Sheet

3,750,000 Shares of Common Stock

Issuer:	CoStar Group, Inc.
Symbol:	Nasdaq Global Select Market: CSGP
Common stock offered:	3,750,000 shares of Issuer common stock
Over-allotment option:	562,500 shares of Issuer common stock
Common stock outstanding after
the offering:	24,723,775 shares of Issuer common stock
(or 25,286,275 shares if the
underwriters exercise their
over-allotment option in full) (based on
shares outstanding on May 25, 2011)
Last reported sale price of
Issuer common stock on the
Nasdaq Global Select Market on
May 25, 2011:	$61.53
Public offering price:	$60.00 per share (representing gross
proceeds of $225.0 million, or $258.8
million if the underwriters exercise
their over-allotment option in full)
Underwriting discount:	$2.40 per share ($9.0 million, or $10.4
million if the underwriters exercise
their over-allotment option in full)
Net proceeds, before expenses:	$57.60 per share ($216.0 million, or
$248.4 million if the underwriters
exercise their over-allotment option in
full)
Use of net proceeds:	The net proceeds of the offering are
$214.9 million (or $247.3 million if the
underwriters exercise their
over-allotment option in full), after
deducting total underwriting discounts
and estimated expenses of $1.1 million
relating to the offering. The Issuer
expects to use the net proceeds of the
offering to fund a portion of the cash
consideration payable by the Issuer in
connection with its acquisition of
LoopNet, Inc. and, to the extent that
any proceeds remain thereafter, or the
acquisition is not completed, for
general corporate purposes.
Pricing date:	May 25, 2011
Settlement date:	June 1, 2011
Sole book-running manager:	J.P. Morgan Securities LLC

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Co-managers: Needham & Company, LLC Stephens Inc. William Blair & Company, L.L.C. JMP Securities LLC

The Issuer has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) for the offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement and other documents the Issuer has filed with the SEC for more complete information about the Issuer and this offering. You may get these documents for free by visiting EDGAR on the Securities and Exchange Commission website at www.sec.gov. Alternatively, the Issuer, any underwriter or any dealer participating in the offering will arrange to send to you the prospectus if you request it by calling toll-free 1-866-803-9204.

Any disclaimer or other notice that may appear below is not applicable to this communication and should be disregarded. Such disclaimer or notice was automatically generated as a result of this communication being sent by Bloomberg or another email system.

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