Oliver Carr III Believes D.C. Will Overcome

2025 was an extraordinary year for Carr Properties.

The firm, helmed by Oliver Carr III (and not to be confused with his father’s CarrAmerica), experienced an ownership swap in July after J.P. Morgan closed out its holdings and a $100 million equity investment granted Alony Hetz a majority stake. Carr simultaneously traded two of its properties in the DMV for a combined $119 million, signaling a renewed focus on trophy assets, and is now in the process of converting three distressed office buildings into multifamily complexes. 

Commercial Observer caught up with Carr to chat about the big changes at his firm, as well as diversifying and refining his portfolio, and how heavily the District — which also saw a blast of change in 2025 — factors into Carr Properties’ future.

This interview has been edited for length and clarity.

Commercial Observer: 2025 was a transitional year for Carr Properties. J.P. Morgan Asset Management exited in exchange for three of Carr’s assets; Alony Hetz became majority owner with a $100 million equity investment; and Carr separately sold two other DMV assets for nearly $120 million. 

As CEO, how do you process so much change over the past 12 months? Were you expecting 2025 to be such an important year, or did this series of events come up naturally?

Oliver Carr: This was an expected evolution for Carr, and something we had been working toward for quite some time. While the individual transactions came together over the course of the year, the broader direction was very intentional. We have been thinking carefully about how to position the company for the next phase of growth, and 2025 was the year when those plans crystallized.

J.P. Morgan has been a valued partner for many years, and their decision reflects broader institutional trends around office exposure, rather than anything specific to Carr or our assets. At the same time, Alony Hetz’s $100 million equity investment and increased ownership stake send a very clear signal of long-term confidence in our platform, our people, and our strategy. This capital empowers us to think strategically about where and how we deploy resources and how we grow as a company, and I’m very excited for the year ahead.

We are entering 2026 as a more focused company, with growth capital that will allow us to be more active in our pursuit of new development and acquisition opportunities. This year has felt like a natural transition into a new chapter for Carr. 

Carr has whittled down its portfolio to just eight fully developed properties in the DMV, Boston and Austin, Texas (including last week’s acquisition of 1401 New York Avenue NW in D.C.). Is Carr’s future focused on trophy assets?

Trophy assets will always be central to Carr’s strategy. We strongly believe that in any market cycle, the best buildings will outperform, and our core portfolio includes premium-quality assets that offer our customers an elevated experience.  

At the same time, a more concentrated portfolio frees us up to be highly intentional about where we invest next. We are very actively redeveloping distressed office buildings into Class A residential, with active projects including 425 Montgomery and 3033 Wilson in Northern Virginia, and 2121 Virginia Avenue in D.C., which we also recently acquired. These are opportunities to take well-located yet underperforming office buildings and redevelop them into premier-quality housing that is consistent with the Carr brand. 

Additionally, we are actively looking to expand our portfolio of trophy-quality office buildings where we can generate outsized returns. … We are excited about our recent acquisition of 1401 New York, which we plan to reposition as a trophy-quality building located in the heart of the city. We believe that 1401 New York will perfectly complement our portfolio of premium-quality office assets, such as One Congress in Boston and Midtown Center in D.C.

Carr is primarily known for office properties, yet, as you mentioned, has multiple multifamily developments on the way in the DMV. Do those developments signal an intentional shift away from office? What about other asset types, such as retail or medical offices?

We have 30 years of experience as an office company, and that business line will remain as a core of our activity. However, as we continue to grow the business, we are very focused on investing and developing in property sectors with strong demand fundamentals, and that certainly includes Class A residential in premium locations. We like the supply/demand fundamentals around high-quality multifamily and strong markets like D.C. and Boston for the coming decade.  

Looking ahead, is there a line of business that the firm is zeroing in on in any particular location? More dispositions, developments, acquisitions, etc.?

We expect 2026 to be an active year on the development side. With new capital in place, we have the flexibility to be selective and decisive rather than reactive.

In the year ahead, our focus is on office redevelopment, residential development, and targeted acquisitions in markets we know well, including the DMV and Boston. We are less focused on building scale and are more focused on pursuing targeted opportunities where we have strong conviction and can deliver strong returns to our investors. This discipline has served us well over time and will continue to guide our approach and investment strategy in 2026.

The District is also in the middle of a transitional era in more ways than one, yet with the effects of the pandemic still hanging around its neck. Office vacancy is still hovering around 23 percent, according to CBRE’s latest market report. Beyond the assets you’ve mentioned, how does D.C. factor into Carr’s 10-year plan? 

Washington, D.C., is our home market, and it remains a key area of investment focus for us in both office and residential. Speaking to the current conditions in the D.C. office market — yes, the headline vacancy numbers are challenging. But you need to look below the surface to see what is actually happening. In fact, the D.C. trophy market is actually quite healthy with an 11 percent vacancy rate, and there are few large blocks of high-quality space currently available.  We are seeing strong demand for our five buildings located in the D.C. metro area, and are excited about acquiring additional assets that we can position to tap into the strong demand for trophy space.  

We are also quite focused on growing our presence in the Boston market, which is exhibiting a similar flight-to-quality profile as the D.C. area. We are also looking at growth opportunities in our third market, Austin, Texas. However, Austin is facing a longer recovery given the levels of new office supply that have delivered over the last two to three years. Austin is a resilient market, and I’m confident that as job growth ramps up with no new supply on the horizon, the market will stabilize within the next two to three years.  

Regarding D.C., what do you think about when you consider the major challenges, and certain triumphs, that the city has gone through, both in 2025 and since the pandemic in general? Does the D.C. market have the potential to become a radically different place within our lifetimes? Do you still believe in the city as a setting to do lucrative business?

The D.C. region will always be a great market for business, given the importance of corporate America having a presence close to the federal government. Our regional workforce is one of the largest and most educated in the nation. [The region is the] sixth-largest regional economy in the U.S., and second in the nation in educational attainment.  Between the great livability of the area, access to the federal government, and an educated population, there are a lot of reasons for companies to want to locate and grow in the DMV.  

While the last few years have been challenging, with the reduction of the federal workforce and agency spending cuts, most of that is behind us, and we can begin to grow again starting in 2026. The opportunity that I expect to see play out in the region over the next 10 years is growth in corporate relocations to the city as D.C. cranks up a major corporate attraction effort. This will hopefully lead to the continued diversification of our regional economy, job growth, and less reliance on the federal government.  

D.C. leadership knows what to do, and now it is a matter of putting the plan into action. I’m confident that they will.

Nick Trombola can be reached at ntrombola@commercialobserver.com.