Fannie Mae Slashes Headquarters Space in Another Blow to D.C. Office Market
The mortgage provider is taking less than half as much square-footage as it previously leased at Midtown Center.
By Nick Trombola August 6, 2024 12:46 pm
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After bowing out of its lease ahead of schedule earlier this year, Fannie Mae (FNMA) has opted to re-sign at its former Washington, D.C., headquarters — for less than half as much space.
The government-backed mortgage provider inked a long-term deal for 340,000 square feet at 1100 15th Street NW, or Midtown Center, an 869,000-square-foot building owned by a joint venture between Carr Properties and IGIS Asset Management.
Yet, Fannie Mae’s new lease is for 380,000 less square feet than it previously rented at the building, which it had signed for in 2018. The agency this past January notified Carr Properties that it would exercise its “early out” clause to vacate the property by 2029, five years ahead of its lease end date, according to Commercial Observer reporting at the time.
“Our reduced office footprint will allow us to continue to best meet the needs of our employees and business operations while being fiscally responsible,” Fannie Mae said in a statement about the latest move.
At the time of its original signing, Fannie Mae’s lease at Midtown Center was the largest private sector office lease in D.C. history. Yet the explicit reasoning behind Fannie Mae’s withdrawal, and now its return, is still murky. The entirety of Fannie Mae’s headquarters space was put back on the market earlier this year.
For its new lease, Fannie Mae was represented by Art Santry and Ned Goodwin of Cushman & Wakefield (CWK). Carr Properties was represented by Kaitlyn Rausse, the firm’s senior vice president of leasing.
Carr acquired Midtown Center, which had been the long-time home of The Washington Post, from former Post parent company Graham Holdings in 2014 for $159 million. Carr then spent the next several years renovating the property, in 2019 picking up a $525 million CMBS refinancing on the property, which matures in 2033.
Troubled coworking company WeWork also leases space at Midtown Center. It signed for 110,000 square feet at the building in 2019, though it negotiated with Carr a reduction of rent in exchange for less space in the wake of WeWork’s bankruptcy at the end of last year. It’s unclear how much space the company currently takes there.
Nick Trombola can be reached at ntrombola@commercialobserver.com.
