October 29, 2010
By Barbra Murray, Contributing Editor
AOL Inc. has decided to forgo steady income stream from four fully leased office buildings at its campus in Dulles, Virginia, for cash up front. The online services company has signed a deal to sell Pacific Corporate Park, totaling 700,000 square feet of office space and 22 acres of developable land on the eastern portion of its campus, to CB Richard Ellis Realty Trust for $144.5 million.
Real estate services firm CB Richard Ellis Group Inc. represented AOL in the transaction. Despite the disposition, AOL continues to have a strong presence at its campus, with three office buildings totaling 500,000 square feet for its 1,800 full-time workers, two childcare buildings, a warehouse and a data center.
AOL had emptied Pacific Corporate Park of its employees earlier this year, rendering the facilities appropriate for the company’s current strategy of disposing of non-core real estate assets. Developed over a two-year period beginning in 2000, the structures sit just off Route 28 about 30 miles east of Washington, D.C., and carry the addresses of 22110, 22260, 22265, 22270 Pacific Boulevard. Raytheon is the lead tenant at Pacific Corporate Park, having signed a lease agreement in 2009 for every single square-foot in three of the four buildings, and a portion of the space in the fourth building for an aggregate 600,000 square feet. The technology company’s lease on the space lasts through February 2021.
With the purchase of Pacific Corporate Park, CBRE Realty Trust will also get its hands on two parcels at 22275 Pacific Boulevard and 22341 Dresden Street that are entitled tot accommodate two additional 180,000 square-foot buildings. However, with an 18.6 percent vacancy rate, according to a third quarter report by CBRE, Loudoun County is not currently in need of 360,000 square feet of new office space. But the future is a different story. “Loudoun County is not a large market, it has about 13 million square feet of office space,” Marianne Swearingen, research manager with CBRE, told CPE. “It’s unknown what potential impact the planned Metro extension to Dulles Airport may have on the market. Some companies are already looking for build-to-suits with an office/industrial mix in the area, and data centers are doing very well in Northern Virginia because of its advanced fiber optic network. Northern Virginia is the Silicon Valley of the East Coast.”
CBRE Realty Trust plans to finance the purchase of Pacific Corporate Park with net proceeds from its current public offering. The transaction is on track to close in November.