Carr, Barings Buy White House-Area Office

Carr Properties planted another flag in Washington, D.C.’s bruised office market, snapping up a White House-adjacent building at a price that signals how far values have fallen, even for prime addresses.

The D.C.-based developer teamed up with Barings to acquire 1401 New York Avenue NW for $85 million, buying the 211,000-square-foot property roughly a block from the White House. The deal works out to slightly above $400 per square foot, a sharp haircut from the building’s last valuation, according to the Commercial Observer.

The sellers were BNP Paribas and Stewart Investment Partners. The property last traded in 2018, when AXA and Stewart paid about $166 million for an economic interest in the asset. BNP inherited that stake through its acquisition of AXA last year, setting the stage for a reset sale in a market where office pricing has been under pressure for several years.

Eastdil Secured brokered the transaction for the sellers.

The 1983-built building is leased to a mix of law firms and advisory shops that skew toward the city’s legal and political ecosystem, including Boies Schiller Flexner, Vedder Price, Nossaman and Capstone. While far from empty, the property is slated for a refresh meant to keep it competitive as tenants continue to favor newer buildings with robust amenities.

Carr and Barings plan to upgrade the rooftop, add a fitness center, modernize conference facilities and overhaul the lobby. The goal is to pull the building closer to the “trophy” tier Carr has increasingly emphasized in its portfolio, leaning on location and improvements to drive leasing rather than chasing rents through concessions alone.

The acquisition follows a year of significant change for Carr. In the middle of last year, J.P. Morgan Asset Management exited its minority stake in the firm, taking three Mid-Atlantic office properties in the process.

Israeli investment firm Alony Hetz stepped in with a $100 million equity investment, becoming Carr’s majority owner and giving the company fresh capital as it reshaped its holdings.

Carr also sold off a handful of non-core assets in and around D.C., narrowing its focus to higher-quality buildings such as Midtown Center. Among the deals, San Francisco-based Shorenstein returned to the area and acquired the 901 K Street NW office property for $84.3 million.

— Holden Walter-Warner