J.P. Morgan Takes Over 3 Buildings From Carr In Property-For-Equity Swap
One of Carr Properties’ major investors has exited its stake in the company, taking three D.C.-area office properties with it.
A J.P. Morgan Asset Management fund finalized its deal to redeem its 36% equity stake in the company in exchange for three properties and “other considerations,” according to Carr Properties. Bisnow first reported the deal was in the works in May.
The J.P. Morgan fund is acquiring Signal House, a 10-story office building that opened near Union Market during the pandemic; 1875 K St. NW, a 23-year-old office building in downtown D.C.; and 1701 Duke St. in Old Town Alexandria, built in 2009. Carr said it will still operate the assets.
Along with the fund's exit, Carr’s other major investor, Israeli firm Alony Hetz Properties & Investments, is investing $100M, Carr announced, an investment that takes its equity stake from 48% to 79%.
Carr CEO Oliver Carr said in a statement provided to Bisnow that the company was “entering an exciting new chapter.”
“We look forward to deepening our relationship with another trusted and valued partner, Alony Hetz,” he said. “Their investment enables us to accelerate our growth strategy, advance new development and acquisition opportunities and continue delivering high-quality, thoughtful spaces that meet the evolving needs of our customers and communities.”
J.P. Morgan declined to comment.
Investor filings from Alony Hetz in March said the equity injection would help fund the J.P. Morgan redemption as well as “business expansion, with an emphasis on new development.”
Alony Hetz CEO Nathan Hetz said in a statement that the company is “proud of what we have accomplished” with Carr Properties, including the development of the Midtown Center complex in D.C., The Wilson and The Elm development in Bethesda, and One Congress in Boston.
“As our primary vehicle for investment in the United States, we look forward to continuing to support the company and its strategic plan for value creation,” Hetz said.
J.P. Morgan had a large equity stake in Carr since 2007 through a fund it manages on behalf of its clients: the Special Situation Property Fund.
Carr has offloaded several other D.C.-area properties over the past few months.
Last month, it sold 901 K St. NW, a 219K SF office building it developed near D.C.’s convention center in 2009, to Shorenstein Properties for $84.3M. In May, it sold a 228K SF Bethesda office building at 4500 East West Highway for $35M to a family-owned real estate business.
In April, it transferred its interest in a 394K SF office building next to Midtown Center to Beacon Capital Partners.
In addition to its holdings in the D.C. area, Carr owns properties in Boston and Austin.
After the transfer of properties to J.P. Morgan and its recent sales, Carr has seven office properties totaling 3.3M SF, Carr said in a release. It also has two multifamily projects underway, totaling a planned 546 units.
“This realignment marks a significant milestone in Carr’s evolution and will anchor the next phase of the company’s growth,” the company said in the release.
