National Public Radio

Client Situation

National Public Radio (NPR) had outgrown its 170,000-square-foot headquarters of 16 years located at 635 Massachusetts Avenue, NW in Washington, DC and needed a new facility to call home.  The media group was also facing operational issues that warranted relocation, having shifted its broadcasting technology from analog to digital. NPR had hired two brokerage firms that failed to develop and execute a real estate strategy that met its space and financial requirements.  In 2006, after a fierce competition among nine brokerage firms, Studley (now Savills Studley) was hired to accomplish what the two other firms couldn’t—to develop a creative real estate plan to acquire a new headquarters and dispose of the existing one.

Consideration Analysis

Studley analyzed more than 90 metro locations throughout the District, Maryland and Virginia for a location that met NPR’s site selection criteria for its 1,000 headquarters employees.  Studley created a competitive environment in the marketplace that yielded aggressive concessions from the District of Columbia and developers, setting a strong foundation from which to negotiate and select the final building.  After extensive negotiations, then short-listing select buildings on which design studies were drawn by NPR’s architect (Studley orchestrated the procurement of the architect, engineer and general contractor), NPR decided to acquire 1111 N. Capitol St, NE, a historic building located in the emerging NoMa submarket with over 400,000-square-feet of development rights. NPR’s plan was to integrate the historic property into a state-of-the-art headquarters facility that would house all of the media company’s journalism, multimedia, business and executive activities.

The strategy that Studley developed for its client contained many moving parts.  In addition to assisting NPR with its new headquarters acquisition, Studley was tasked with coordinating the sale of NPR’s existing headquarters at 635 Massachusetts Avenue. The firm proposed a creative plan that could enable NPR to receive top dollar for its existing headquarters and also secure a leading developer for its new project in order to eliminate any timing obstacles associated with the exit from the Mass Ave. building that selling it to another party (investor or developer) might create. The firm only marketed the property to a select list of buyers who not only had the financial ability to close on the transaction, but would also agree to provide high-quality development management services for the media company's new headquarters in NoMa.

Prior to marketing the property, Studley also advised NPR to acquire the remaining development rights to the site, a total of 450,840 gross square feet—a move that increased the value and potential price of the building.

After a competitive bid process among the nation’s top developers, the result was a three-pronged transaction that included the sale and leaseback of NPR’s existing headquarters and the development of its new building.

Result

In May 2008, NPR finalized its acquisition of 1111 N. Capitol St, NE at a below-market purchase price of $42 million. Several months later, Studley represented NPR in the sale of its former Massachusetts Avenue headquarters to Boston Properties, with a transaction that linked the short–term leaseback of the building to retaining the developer as the development manager of the media company’s future build-to-suit. This complex strategy provided NPR an above-market sale price for 635 Massachusetts Avenue and eliminated scheduling risks associated with the timing and delivery of its new headquarters in NoMa.

In addition Studley successfully negotiated more than $100 million in real estate tax abatement from the District of Columbia and assisted the media company in attaining tax-exempt bond financing for its new development site.

Summary Information

  • Property: 635 Massachusetts Avenue, NW, 1111 North Capitol St., NE
  • Transaction Size: 450,840 SF
  • Transaction Type: Headquarter Relocation, Sale
  • Service Line: Office, Capital Markets

Meet the Team

Knarr, Vernon E.

Knarr, Vernon E.

Executive Managing Director
202.624.8513

Lange, Parker M.

Lange, Parker M.

Managing Director
202.624.8522

Rayfield, Julie K.

Rayfield, Julie K.

Executive Managing Director
202.624.8532

Greenberg, Arthur G.

Greenberg, Arthur G.

Executive Vice President
202.624.8519