A more than 140-year-old former school in downtown Washington, D.C., is on the market as part of the General Services Administration’s plan to decrease its real estate holdings. But while the purchase offers potential buyers perks like tax breaks, the new owner might also face challenges such as extra security thanks to the property's next-door neighbor.
The online auction through the GSA — the government agency that manages federal properties — on the red brick Webster School at 940 H St. NW began Sept. 18 with an asking starting bid of $1 million. The school is located in the Penn Quarter neighborhood, across from the high-end shopping area CityCenter.
The potential new owner could turn the 27,500-square-foot property into a boutique hotel, residential space or a traditional office building. Redevelopment of the vacant former school marks the latest push to shrink a costly federal real estate portfolio and simultaneously transform the city’s downtown amid a slow-moving office market.
Potential buyers face some upsides with the property, like the ability to use tax credits to renovate the historic building, according to GSA marketing materials. At the same time, the future owner would need to comply with numerous security requirements given that the adjacent property at 950 H St. NW is the Secret Service's headquarters.
"GSA cannot comment on the names of any interested parties," a spokesperson for the federal agency told CoStar News via email. They described the choice to auction the property, common for GSA property sales, as a method that offers transparency and cost-effectiveness while promoting competition.
The GSA purchased the Webster School in the early 2000s, a few years after the city designated the building as a historic site as a buffer for the adjacent federal agency. That purchase was for around $2 million, according to the Congressional Budget Office.
According to a GSA bid invitation that was updated this week, a foreign government or entity or individuals and groups acting on their behalf may not purchase the property or become a leasing tenant. Additionally, vehicle security screenings and unrestricted U.S. government access to monitor for threats can be expected.
“The property is currently vacant, allowing for immediate implementation of redevelopment plans following approvals through the District of Columbia State Historic Preservation Office and Office of Planning,” according to the GSA.
Shrinking portfolio
The GSA announced in November 2023 it earmarked the Webster School, along with nearly two dozen other properties across that country, for sale as it tries to reduce its ownership of underutilized real estate. Other properties in Washington included on that list are the Nebraska Avenue Complex, a U.S. Department of Homeland Security facility.
“GSA is committed to right-sizing and optimizing the federal buildings portfolio in ways that benefit local communities and taxpayers,” GSA Administrator Robin Carnahan said at the time.
The school is situated in a hub of economic opportunity at the heart of the nation’s capital, just blocks away from the Capitol One Arena that in March received a $515 million renovation commitment from the city to prevent its basketball and hockey teams from moving across the Potomac River to Northern Virginia.
Long history
The Webster School was constructed between 1881 and 1882 for white students who lived close to the downtown area, according to the GSA, and was named in honor of Daniel Webster, who served as a senator from Massachusetts and as secretary of state in the cabinet of President Millard Fillmore.
Edward Clark, the Architect of the Capitol in the late 19th and early 20th century, signed the drawings for the Webster School, indicating he either designed the building or the drawings at least passed his inspection.
During the early 20th century, the building hosted the Americanization School, operating free of charge to residents of the District seeking U.S. citizenship.
The school was later used as an administrative office for the city’s public school system between 1950 and 1963 before it became home to a program aimed at providing education and medical care for pregnant students and single mothers. It then went on to house special education classes and an administrative office of the city's special education program.
If purchased and redeveloped, the Webster School would join a similar 19th-century former school in downtown Washington that was recently revitalized for a new purpose: the historic Franklin School building at 925 13th St. NW. The former school is now home to the language arts museum Planet Word.
Bidders for the Webster School property are required to start with a $500,000 deposit for the three-story building. Open houses for the Webster School sale are slated for the end of September through the beginning of November. The bidding process remained open as of Sept. 24 and no closing date was listed.