Iconic One Franklin Square Office Building, Home To Washington Post HQ, Hits The Market
The huge Downtown D.C. office building that serves as the Washington Post's headquarters could soon have a new owner.
Hines has retained JLL to market One Franklin Square, a 639K SF office building at 1301 K St. NW, for sale or recapitalization, according to a marketing email the brokerage firm sent Tuesday morning.
The 12-story building stands out in Downtown D.C. with its two pointed towers that rise 90 feet above its top floor. It was constructed in 1990 by Prentiss Properties, and Hines acquired it in 1996 for $180M, the Washington Post reported at the time.
In 2014, one year after Amazon founder Jeff Bezos acquired the newspaper, the Washington Post signed a lease to move its headquarters to One Franklin Square. It opened in a 250K SF space in December 2015, and it has expanded twice since then, now occupying nearly half the building with roughly 306K SF, according to the JLL marketing materials.
The Washington Post has kept much of its workforce remote throughout the coronavirus pandemic, but it began the first phase of its three-phase return to the office in July. It had planned to complete its full return to the office by Sept. 13, but it announced earlier this month that it would push that date back to Oct. 18 because of the delta variant's spread.
The building is 93% leased to 14 total tenants with a weighted average remaining lease term of eight-and-a-half years, according to JLL. Other tenants include law firms Reed Smith and Davis Wright Tremaine.
Hines invested $26.2M to renovate the building, adding new amenities including a rooftop terrace and a 130-person conference room, a fitness center and a yoga studio. Hines owns the property without any debt, according to JLL.
The building's retail includes Compass Coffee, Union Kitchen and Soho Cafe. It sits across K Street from Franklin Park, a 4.8-acre public space that closed last summer for an $18M renovation that was scheduled to finish this month.
JLL's marketing materials say Hines is looking to either sell or recapitalize the property. It doesn't list an asking price, but it has the potential to be one of the biggest deals in D.C. this year. The property's assessed value this year was $369M.
The largest office investment sales transaction through the first half of this year, according to Newmark's Q2 report, was Hines' $216M purchase of the 396K SF 1015 Half St. SE office building from PGIM.
The D.C. area recorded $2.8B in office sales during the 12 months ending June 30, according to Newmark, a 68% decline from the previous year. Investment sales brokers told Bisnow in May they saw more owners bringing properties to market, and they expect more deals to close throughout the second half of this year.
