Downtown DC's Next Big Thing Is Officially A Thing
Carr Properties, already one of the DC area's most active developers, expects to at least double in size by the end of 2017, anticipating great returns on developments like Midtown Center, Fannie Mae's future home in downtown DC.
15 straight days of rain couldn't stop the sun from shining on Oliver Carr III yesterday, as he celebrated the groundbreaking of Carr Properties' newest development, a dramatically designed, $680M project (by SHoP Architects and WDG Architecture) that, when complete, will have 50k SF of retail and 812k SF of office space, 752k SF of which will be occupied by Fannie Mae's new national HQ.
Bisnow reported after the lease was signed last January that it was possibly the largest private sector lease in DC history. When asked if he could confirm, Oliver told us it's true, as far as he knows.
The deal came together in about a week, Oliver said, and expediting the construction meant paying to help the Washington Post move out to One Franklin Square as quickly as possible.
Getting the Post moved out paved the way for Fannie Mae, which will move into the U-shaped building in two phases—by the end of 2017, and the rest in early 2018. When the building opens, it will have retail along an alley between it and Carr's Columbia Center next door.
Carr also is redeveloping the Apex Building in Bethesda, which will sit on top of a new Metro entrance and at the terminus of the Purple Line. Plans are already in and receiving approvals for a 937k SF project with 360k SF of office and the balance in residential and ground-floor retail. Add that to 2311 Wilson Blvd, which signed Opower (pending its acquisition by Oracle) to a 65k SF lease.
Around Midtown Center, Columbia Center is trying to become the first WELL-Certified building in DC. After buying 1615 L St NW for $213M last year, Oliver plans to turn it into "the future of office," with coffee, lounges, rooftop deck and public spaces, starting later this year. Carr Properties will be moving into 1615 L St from its home at 1776 Eye St NW.
"Our asset quality is one of the best in DC," Oliver said after he spoke at the ceremony. We snapped him before the ceremony chatting with Ward 2 Councilman Jack Evans.
That's what's spurring the confidence in the near-term future. Carr has been selling off assets in the suburbs, dealing a Chantilly office buildings for $16M. And it's raising more money from its investors: the company is 45% owned by JPMorgan, 45% owned by Israeli firm Alony Hetz and 10% owned by smaller investors, including the Carr family and Clark Construction.
"We're raising toward a goal of $300M," Oliver said. "Today we're about a $2B company. By fall 2017 we expect to be worth $4B or $5B."
Hitting that goal means a few decisions coming up, including whether to speculatively develop the Wendy's site in Courthouse, a 187k SF mixed-use building at one of the most prominent intersections in Arlington, or wait for an office tenant in the still-depressed NoVa market. Oliver said the firm hasn't decided yet.
Carr clearly expects great things from its projects, and yesterday was hailed as an achievement, despite some community uproar over the expedited construction schedule—and blocked off bike lanes as a result.
"This project is going to bring life back to a neighborhood that didn't have any," Evans told the crowd on the sidewalk before the dirt was turned. Next to the councilman and Oliver is Mayor Muriel Bowser, Carr Properties managing director Austin Holderness and Clark Construction SVP Lee DeLong.
