A 299-unit apartment tower is rising at 2121 Virginia Avenue NW in Foggy Bottom as Carr Properties shifts part of its development focus toward housing. The project is backed by $92 million in construction debt, a five-year loan led by PNC Bank with United Bank participating, according to Berkadia. Carr bought the site outright from the Pan American Health Organization, a longtime institutional tenant that no longer needed the space.
According to The Real Deal, the financing was arranged by Berkadia's Brian Gould and Pat Cunningham, and the project benefits from a 20-year tax abatement. The building will include an indoor pool, a club room, coworking spaces, a fitness center, outdoor courtyards, a game room and a library, with leasing expected to begin in 2028. Carr purchased the site in November 2025 for $23.5 million from the Pan American Health Organization, which had used the nine-story International Style building for overflow office space, according to UrbanTurf DC.
Full Demolition, Not a Retrofit
The project's above-ground structure is being demolished rather than converted. Demolition began in March, with Clark Construction serving as general contractor and Michael Graves Architecture designing the new nine-story building, per Carr Properties. The new development will rise over the site's preserved underground parking structure, a feature expected to speed ground-up construction.
That approach places 2121 Virginia Avenue among the less common forms of D.C.'s office-to-residential redevelopment. As reported by Commercial Observer, it is one of only two approved Housing in Downtown tax abatement projects involving complete above-ground demolition instead of adaptive reuse. The 20-year abatement is tied to the Housing in Downtown program, established in 2024 by Mayor Muriel Bowser with a goal of adding 15,000 downtown residents by 2028.
What D.C.'s Conversion Program Has Produced
Separately from 2121 Virginia Avenue, the D.C. Office of the Deputy Mayor for Planning and Economic Development says the District certified four office-to-residential conversions in fiscal 2025, totaling 771 units, including 78 affordable units. The Housing in Downtown program overview says participating projects must provide affordable housing equal to 10% of units at 60% of median family income or 18% at 80% of median family income, along with CBE hiring for construction and operations and First Source hiring for operations.
The shift is part of a longer land-use change rather than a new pattern limited to this project. The D.C. Office of Planning says production, distribution and repair uses receded over decades in parts of the District, including Foggy Bottom, as apartments and office buildings replaced them.
Affordable Units Baked Into the Deal
Thirty of the roughly 300 units at 2121 Virginia Avenue will be designated affordable housing, a set-aside mandated under the guidelines attached to D.C.'s commercial tax incentive program, according to Carr Properties. The Housing in Downtown program includes a $41 million investment, as noted by Government of the District of Columbia.
D.C.'s largest office-to-residential conversion to date, known as The Geneva near Dupont Circle, broke ground in January and will turn two vacant office towers into 532 apartments using C-PACE financing and tax abatements, with 60 units set aside as permanently affordable, according to the D.C. Mayor's Office. Hoodline previously covered that conversion, part of a broader wave of downtown repositioning that has also drawn other local players into the market, as Hoodline reported in its look at the Jemal family's office buys.
A Regional Pivot Beyond Foggy Bottom
Carr's residential push extends well past the District line. In March, the company partnered with Northwestern Mutual to demolish a 1980s office tower at 3033 Wilson Blvd in Arlington's Clarendon neighborhood, replacing it with a 315-unit apartment complex, according to ARLnow. Northwestern Mutual provided joint-venture equity and construction financing for that project.
Carr's Northern Virginia pipeline also includes 425 Montgomery Street in Old Town Alexandria, an eight-story, 237-unit apartment project that will feature a 6,445-square-foot performing arts space leased to the nonprofit CityDance, per Carr Properties. Alexandria has set a goal of transforming the surrounding neighborhood into an arts district. Carr itself relocated its corporate headquarters to Midtown Center in Washington in August.
Carr's office strategy is continuing alongside its residential projects. The Real Deal reported that Carr Properties and Barings paid $85 million for 1401 New York Avenue NW, a 211,000-square-foot office building near the White House, and plan to refresh the 1983 property with a new fitness center, upgraded rooftop and modernized lobby. Separately, J.P. Morgan Asset Management transferred three Mid-Atlantic office properties as it exited its minority stake in Carr Properties; Alony Hetz now holds the majority following its $100 million investment in the company. Carr has sold non-core assets in and around Washington and holds eight owned or managed office properties, focusing on higher-quality buildings such as Midtown Center.
The project is part of a broader redevelopment push in nearby Georgetown. Rockpoint, LCOR and Potomac Investment Properties are redeveloping 1000 and 1050 Thomas Jefferson Street NW into a 299-unit complex, split between a 10-story and a nine-story building, that has been approved for residential use and is billed as Georgetown's largest multifamily project in more than a century, per the same Real Deal report. It will include a resident lounge, rooftop pool, fitness center and 18,000 square feet of retail space. Carr counts three residential properties in its overall pipeline.
