A half-vacant office tower overlooking Farragut Square is getting a new owner — and a sizable makeover budget. Garfield Investments and Broad Creek Capital are betting $26 million that upgraded space can bring fresh life to one of downtown Washington's most prominent addresses.
The joint venture plans to spend another $10 million improving the 1980s-era property, according to the Washington Business Journal. The purchase gives the investors control of 1667 K St. NW, a building that has been marketed as both an office repositioning opportunity and a possible redevelopment play.
A 12-Story Office Building Steps Into Its Next Act
1667 K Street was completed in 1983 and contains roughly 182,000 square feet across 12 floors, with underground parking, according to property information from Akridge. The building sits beside Farragut Square, about two blocks from the White House, giving the deal a location that is difficult to replicate even in a soft office market.
Earlier this year, the property was put on the market as a potential redevelopment project, with marketing materials suggesting it could become a trophy office building or high-end residences, as reported by the Washington Business Journal. The buyers' reported plan is more immediate: invest in the existing office asset and work to make its empty space competitive again.
The D.C. Office Market Is Improving, But Unevenly
The timing reflects a downtown market that is showing early signs of stabilization without exactly declaring victory. Washington's office market posted 229,543 square feet of positive net absorption in the second quarter, while vacancy edged down to 21.9%, according to Cresa.
Better buildings are pulling farther away from older, less competitive inventory. Newmark reported that the District's overall office vacancy rate was 20.6% at the end of the second quarter, while trophy properties had a 9.1% vacancy rate — a gap that helps explain why owners are putting serious money into upgrades.
A Familiar Playbook For The Two Investors
The Farragut Square purchase also extends a recent partnership between Garfield and Broad Creek. The firms bought the 300 M Street SE office building in Navy Yard last year, and a March update posted by Garfield Investments said the property had reached 62% leasing, up from just under half-occupied when acquired.
Broad Creek has described that earlier deal as a strategy of buying institutional-quality office properties at discounted prices and repositioning them for long-term value. The firm's project overview says the partnership is looking for opportunities created by distress in Washington's office market — a thesis now being tested on a much more visible corner of downtown.
