Washington Post sells HQ

JONATHAN O'CONNELL
Last updated 17:22 28/11/2013

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Graham Holdings, the former parent of The Washington Post, has reached a deal to sell the newspaper's longtime headquarters in downtown Washington for US$159 million ($195 million).

The newspaper, now owned by Amazon.com founder Jeffrey Bezos, will continue to rent space in the building until it identifies a new headquarters location, a search that began before Bezos bought the paper.

Graham Holdings, which includes a mix of businesses such as Kaplan educational services, is the new post-sale name for the company owned by Donald Graham and his family.

The District of Columbia government assesses the properties at nearly US$80m. The sale to Carr Properties also includes the land beneath an office building Carr already owns, a 12-storey, 144,000-square-foot property.

The Post's editorial and business operations still occupy the building, located about four blocks north of the White House. The Post also once printed newspapers in the building, but after readership started shifting to the suburbs in the 1970s and '80s, it opened a printing plant in Springfield, Virginia and then in College Park, Maryland and ceased printing on the downtown presses in 1999.

Carr Properties is the latest iteration of a family empire begun 51 years ago by magnate Oliver Carr Jr. The company recently landed a US$300m investment from Alony Hetz Properties and Investments, one of Israel's largest real estate investment companies, and has been on a buying spree.

The company plans to grow its real estate holdings from about US$800m today to US$1.5 billion in coming years and then possibly go public, allowing it to attract more cash through an initial public offering.

Oliver Carr III, president and chief executive of Carr Properties, was at a family event on Wednesday afternoon and not immediately available to comment. 

Carr has said in the past that the Post headquarters, located a few blocks from the booming apartment corridor on 14th Street, would make sense as a mixed-use project. Historic preservation groups decided not to nominate parts of the properties as historic landmarks, removing a possible barrier to redevelopment.

"I would imagine a mixed-use redevelopment that would include both some office as well as some residential, perhaps hotel. It could add some vitality," Carr said in an earlier interview.

Post Publisher Katharine Weymouth told employees in February that she had begun exploring the sale of the headquarters and relocating, saying the goal was to "give us a more modern, bright, open and efficient building that better supports and advances our mission into the future".

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Sources familiar with the companies' search, but who were not authorised to share details publicly, said Graham Holdings has been looking for about 30,000 square feet in Northern Virginia. Graham Holdings spokeswoman Rima Calderon declined to comment on the requirements and said in an email that the company has not narrowed its search to any one jurisdiction.

The newspaper has been looking for up to 270,000 square feet in the District. It received about two dozen proposals over the summer and has been narrowing its options.

Graham Holdings has been jettisoning real estate now that it no longer owns the flagship newspaper. The contract for the headquarters follows deals for two warehouses on the Potomac River in Alexandria, Virginia that the company is selling.

The deal for the downtown Washington building is expected to close at the end of March.

- Washington Post/Bloomberg

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