Carr Properties Acquires 4040 N. Fairfax Drive in Arlington From Ascentris for 392-Unit Residential Redevelopment

Carr Properties announced Oct. 14 that it has acquired 4040 N. Fairfax Drive, a 186,000-square-foot office building in Arlington, Virginia's Ballston neighborhood, from Ascentris. The company plans to redevelop the site into a 392-unit multifamily community, with work beginning in summer 2028.

The purchase price was approximately $12.25 million, or about $65.86 per existing office square foot.

Carr Properties Plans 392-Unit Residential Project in Ballston

The planned high-rise community will include 392 apartment homes and amenities including a rooftop pool, according to Carr Properties. The company said additional details will be announced as planning and design progress.

The property sits steps from the Ballston-MU Metro station in what Carr Properties described as one of Northern Virginia's most active mixed-use neighborhoods, with access to regional employers, retail and restaurants.

"4040 N. Fairfax represents exactly the type of opportunity we're seeking as we continue to grow our residential portfolio," said Oliver Carr, CEO of Carr Properties. "Ballston is one of the most compelling residential markets in the Washington region, with exceptional walkability and connectivity. We see tremendous value in repositioning well-located properties like this into luxury multifamily communities."

Carr's Growing Washington-Area Residential Pipeline

The acquisition adds to Carr Properties' residential development pipeline across the Washington region. Carr Properties is currently developing:

• Margot: a 237-unit multifamily community in Alexandria, expected to deliver this year.
• 2121 Virginia: a 299-unit residential community in Washington, D.C.'s Foggy Bottom neighborhood, expected to deliver in 2028.
• 3033 Wilson: a 315-unit residential project in Arlington's Clarendon neighborhood, expected to deliver in 2028.

Using the unit counts in the company's announcement, the four projects total 1,243 planned or active units. Carr Properties said the projects reinforce its long-term residential strategy, which it described as a key pillar of growth alongside its premium office portfolio.

The 2121 Virginia project follows a similar office-to-residential model. The 143,366-square-foot former Pan American Health Organization headquarters at 2121 Virginia Avenue NW, a nine-story office building constructed in 1986, was acquired for $23.5 million, or about $163.91 per square foot. The vacant property is being redeveloped into a residential project that includes affordable units. By comparison, 4040 N. Fairfax was acquired at a lower basis per existing square foot, a difference that may reflect variations in location, building condition, vacancy and redevelopment costs.

Oliver Carr said in January 2026 that the company had growth capital and intended to pursue redevelopment, residential development and targeted acquisitions in the Washington region and Boston.

Arlington Office Market Context

The transaction comes as Arlington's office market remains under pressure. Arlington County's 2026 commercial guidebook reports an overall office vacancy rate of 24%, while office assessments declined 19%, with vacancy identified as a primary driver of falling values. Ballston's average office rent was $45 per square foot, within a range of about $27.50 to $58 per square foot.

First-quarter 2026 county indicators showed office vacancy of 23.5%, average base rent of $40.30 per square foot and positive quarterly net absorption of 41,767 square feet. Leasing demand has improved at the margin, but vacancy remains elevated.

For Carr Properties, the purchase converts an office asset in a high-vacancy market into a housing site near Metro service. Redevelopment is not scheduled to begin until summer 2028, indicating a multiyear planning and design period before construction.

Outlook

With the Ballston acquisition, Carr Properties' announced residential projects span Alexandria, Washington, D.C., and two Arlington neighborhoods, with deliveries scheduled from this year through 2028. The company said it will release further details on the 4040 N. Fairfax Drive project as planning and design advance.

Sources

• Carr Properties: Carr Properties Acquires 4040 N. Fairfax Drive in Arlington