Shorenstein Returns to DC With $84M Office Buy

Carr Properties appears to be cutting ties with as much Washington, D.C., office space as possible. Shorenstein is stepping in.

The San Francisco-based developer acquired the office property at 901 K Street NW in the capital’s downtown neighborhood for $84.3 million, Bisnow reported. The deal was filed with the D.C. Recorder of Deeds on Monday.

The deal for the 219,000-square-foot building breaks down to $385 per square foot, well above the city’s 12-month rolling average of $266 per square foot, as recorded by Newmark. Tenants at the building — developed in 2009 and renovated four years ago — include Baker Donelson, Seward & Kissel, Unite Here Local 25 and Microsoft.

In a statement, Carr noted that it has been retained for property management services. Shorenstein declined to comment on the transaction. Shorenstein received a $74.3 million loan from a pair of AllianceBernstein debt funds, most of it earmarked towards the acquisition.

The deal represents a return to the nation’s capital for Shorenstein. Prior to the acquisition, the company hadn’t made a purchase in Washington, D.C. since the George W. Bush administration. The K Street office is the only building Shorenstein has in the city.

Carr, meanwhile, is quickly moving in the opposite direction, selling a D.C. office property for the third time in the last few months. The local landlord transferred its interest in 1152 15th Street NW, a 394,000-square-foot office building in April, and in early May, it sold a 228,000-square-foot office building in Bethesda for $35 million.

Meanwhile, one of Carr’s biggest investors, a fund managed by J.P. Morgan Asset Management, signed a memorandum of understanding to abandon its 35.5 percent stake in the developer. The fund is poised to take over three Carr properties debt-free as part of the deal, which appears to still be pending as of late last month.

— Holden Walter-Warner