SAIC, Meridian Enter into $85M Sale-Leaseback Agreement for Fairfax Co. HQ Property


Meridian’s Cameron Run Building in Alexandria, VA

Campus Point Realty Corporation (CPRC), a subsidiary of Science Applications International Corporation (SAIC), has entered into a purchase and sale agreement with MRP-I Acquisition A, L.L.C. that includes, among other things, the sale and leaseback of SAIC’s corporate headquarters in McLean, VA.

Over a period of several years, CPRC has agreed to sell 18 acres of land which includes four office buildings containing 900,000 square feet, a multi-level parking garage, surface parking lots, and other related improvements and structures, as well as personal property related to the Property and third-party leases.

Currently, SAIC utilizes a portion of the Property as its corporate headquarters.

Under the Agreement, SAIC is required to lease back 600,000 rentable square feet of space in three of the office buildings – referred to by SAIC as Towers 1, 2 and 3 – which include SAIC’s corporate headquarters. The lease term for Towers 1 and 2 is approximately one year, and the lease term for Tower 3 is seven years.

The purchase price for the initial transaction, which includes the sale of the portion of the Property containing the Towers, and the land on which those buildings are located, related easements, and the leases back to SAIC, is $85 million, less certain costs and adjustments.

CPRC has submitted to the County a rezoning application and conceptual development plan seeking approval for rezoning certain portions of the Property into various parcels in order to permit development of a mixed use project containing residential, hotel, office and retail spaces.

Under the Agreement, the Buyer – which reports is a subsidiary of Bethesda-based real estate firm the Meridian Group – has assumed responsibility for seeking all required governmental approvals for the development of the Property.

The closing of the sale of the Towers is expected to occur in June 2013.

The purchase price for the other parcels will be determined based on the final development plan and type of use approved by the County for each such parcel, less certain costs and adjustments.

SAIC currently estimates the aggregate purchase price for the other parcels to be in the range of $120 million to $140 million, which is based on several important assumptions, including that the Buyer does not make any changes to the final development plan and it is approved as submitted, all other closing conditions and deliveries are met and all of the parcels are sold.

Management currently estimates that the sale of the other parcels will be completed in several closings over the next six years. The book value of all of the Property (including the Towers) is approximately $85 million.

Prior to May 22, 2013, MRP-I Acquisition A, L.L.C. may terminate the Agreement for any reason upon written notice to CPRC.