August 20, 2001
XM Satellite to Buy Headquarters
Source: The Washington Post
XM Satellite Radio Holdings Inc. is negotiating to buy a three-story headquarters building in Northeast, an anchor development in the District's fledgling technology corridor.
XM has contracted to buy the building at 1500 Eckington Place NE for $34 million from a partnership of Bernstein Cos. and Union Realty Partners Inc.
Bernstein and Union bought the building in 1998 and redeveloped it for future tenants. The former printing plant overlooks the intersection of Florida and New York avenues NE, a neglected warehouse section east of downtown where D.C. planners and civic leaders are trying to encourage a new cluster of high-tech businesses.
The redeveloped building attracted Qwest Communications International Inc. of Denver, the first major tech tenant to locate in the district in years. Qwest leased 101,000 square feet of space for a telecommunications switching station that it operates on the bottom floor.
XM Satellite followed Qwest to the site, establishing its headquarters in the rest of the building. XM occupies about 120,000 square feet and is getting ready to launch a nationwide service for broadcasting radio networks by satellite.
"We love it here," said Chancelor Patterson, vice president of corporate affairs for XM. "As an owner we would have the capability of doing some things on this site where we don't have to get permission."
For example, Patterson said, the company might want to expand the building or add parking.
"We could have a paint ball contest," he said. "We would want to have that sort of flexibility. We plan to be here for a long time."
Bernstein and Union put the building on the market in January and began taking offers a couple of months later.
Adam Bernstein, president of Bernstein Cos., said the owners attracted several offers, most of them from investors based outside the District.
Bernstein said it made sense to sell to XM.
"It's really their home," he said. "It's a 24-hour home. It's natural for them to want to control their own destiny."
Although Bernstein said the time was right to sell, he is "almost sorry to see it go."
"We love the building," he said. "We helped change the area. This was the foundation for the new technology corridor north of Massachusetts Avenue."