Two storied families of Washington business agreed to terms on a $159 million deal for the longtime headquarters of The Washington Post last week, when Graham Holdings announced that it would sell the property to Carr Properties.
The Grahams and Carrs have sat near the top of the city’s respective media and real estate industries for generations. Donald E. Graham, board chairman and chief executive at Graham Holdings, was preceded in the media business by his mother and former Post publisher Katharine Graham.
The buyer, Carr Properties, is run by Oliver T. Carr, III, whose father, Oliver Carr Jr., founded the family’s real estate empire 51 years ago. The deal is expected to close in March. The Washington Post newspaper, bought by Amazon.com founder Jeffrey P. Bezos, continues to rent space in the building as it searched for a new home.
So which big-name family came out on top in the transaction? According to a sampling of experts, both did pretty well.
Before agreeing to the purchase, Carr expressed interest in redeveloping the properties with a mixed-use project that could add vitality to the block, located at the corner of 15th and L streets.
Depending on zoning approvals, Carr could build around 750,000 square feet, which means he paid in the ballpark of $200 per buildable square foot.
The price-per-foot approaches record levels for downtown land, said John Sikaitis, senior vice president at Jones Lang LaSalle, a firm that has provided some consultation to Carr. But he said the property was so large it would give Carr the opportunity to redefine the neighborhood akin to the effect the Square 54 development has had on the area around George Washington University .
Square 54, developed by Boston Properties, has a Whole Foods, office space for law firms and some of the most expensive apartments in the city.
“The Post site is a little bit off the beaten path by a block or two, but you could argue that [the Carrs] have the opportunity to kind of create a Main and Main there. They will create a destination, which that area does not have right now,” Sikaitis said.
Carr Properties was considered a favorite to acquire the site from the get-go because it already owns the building on the corner, at 1150 15th St., on land leased from the Post. John F. Kevill, managing director of the real estate services firm Eastdil Secured, said that likely gave Carr an inside track.
“My guess is the fact that Carr controlled the leasehold gave them an opportunity to be a little more competitive than the rest of the field,” Kevill said. “So Graham gets a good market price and Carr gets a little bit of a value premium.”
Jonathan Morris, a former Boston Properties vice president and current adjunct real estate professor at Georgetown University, agreed.
“I think it’s fair for both sides,” Morris said. “That part of town isn’t Connecticut and K,” but the opportunity for such a large downtown development site is rare and appeared at an ideal time for Carr, which recently formed a $300 million partnership with the Israeli firm Alony Hetz Properties and Investments.