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Risking ire on Capitol Hill, Fannie Mae plots D.C. headquarters

Fannie plans to move downtown and sell its headquarters on Wisconsin Avenue. (Photographer: Joshua Roberts/Bloomberg)

Fannie Mae plans to move its headquarters into leased space downtown, and has narrowed its options to either a soon-to-be former law firm’s offices or a building planned to replace the current Washington Post headquarters on 15th Street, according to three sources familiar with the search.

Prompted by expiring leases at two of its Washington buildings, Fannie Mae announced plans over the summer to sell its headquarters buildings on Wisconsin Avenue NW and consolidate employees to a single location in D.C.

Fannie Mae executives are now in the final stages of choosing between two locations, according to the sources, who spoke about the search on the condition of anonymity because they were not authorized by the organization to discuss it.

One is a building near Metro Center, 555 12th St. NW, that will soon be vacated by the law firm Arnold & Porter. The other is a newly planned office building by Carr Properties for the property where The Washington Post currently operates. The Post plans to move to a Franklin Square building, 1301 K St. NW, in 2016 and Carr has been plotting a redevelopment to replace the newspaper’s existing offices.

A leasing broker for the 12th Street building, owned by Met Life, did not respond to a request for comment. Oliver Carr, III, chief executive of Carr Properties, also did not return requests for comment.

Andrew Wilson, a senior Fannie spokesman, issued a statement about the organization’s search:

“We have several good options in the District of Columbia for our new site. Over the next several years, we plan to consolidate Fannie Mae’s five Washington, D.C.-area office locations into a single, leased office. We have not yet made a decision or signed a lease. We are focused on making responsible real estate decisions to ensure the wise use of resources, the safety and soundness of operations, and flexibility to adapt to changes in our future workplace needs.”

Fannie Mae also closely considered moving into the first building of the Capitol Crossing project, 200 Massachusetts Ave. NW, being built above the entrance to Interstate 395. But Jeffrey I. Sussman, president of that project’s developer, Property Group Partners, said the mortgage finance company had moved on after failing to come to terms. Sussman said he was “very disappointed.”

“It’s the best alternative for them. The timing seems to be fit. Financially, it’s a very attractive deal. We’re pretty sure they’re not coming to us. And it’s hard to figure,” Sussman said.

In addition to its headquarters at 3900 Wisconsin Ave. NW, the brick complex across from Sidwell Friends School, Fannie Mae owns 4250 Connecticut Ave. NW and 3939 Wisconsin Ave. NW. It plans to sell all of them.

The possible move comes as Congress debates dissolving or restructuring both Fannie Mae and Freddie Mac. Fannie Mae is an independent entity that, unlike government agencies, does not rely on General Services Administration to make real estate decisions. In all, it  employs 2,800 in the District, about 40 percent of the company’s workforce. The move could happen in 2016 or 2017.

The GSA and members of Congress have been pushing government agencies to move to smaller, sometimes less expensive space, such as when the National Science Foundation agreed to leave Ballston for southern Alexandria and when the Fish & Wildlife Service opted to move from Ballston to Falls Church.

Virginia Sen. Mark Warner (D) — possibly eyeing an opportunity to bring jobs to his state — questioned Fannie Mae’s interest in downtown real estate given its uncertain future at a Senate banking committee hearing last month while speaking to Mel Watt, director of the Federal Housing Finance Agency.

“Fannie Mae is in the process of entering into a long-term lease for what appears to be very expensive real estate. We’ve tried to press for some level of cost-benefit analysis. We have not gotten it,” Warner said.

“I really question the entity’s move,” Warner added. “They seem to be acting as if they assume the status quo is going 30 years forward and I think that that is at best an uncertain assumption and that I’m not sure the taxpayers are getting full value on.”

Watt responded by saying: “We are regularly in consultation with them, and actually our expectation is that it will provide much, much greater flexibility for them.”

Follow Jonathan O’Connell on Twitter: @oconnellpostbiz