McLean-based Science Applications International Corp. announced Monday that it has agreed to sell its 18-acre Tysons Corner campus to a Bethesda-based real estate firm, the Meridian Group.
The step is SAIC’s most dramatic since the contracting giant announced last summer that it would split into two public companies — a government services company that will retain the SAIC name and a technology company that will be called Leidos, clipped from the word kaleidoscope.
The sale of SAIC’s campus will mark perhaps the most visible area retrenchment of government contractors, which have powered the local economy over the past decade but are facing more difficult times as the government pulls back on spending.
In a filing submitted to the Securities and Exchange Commission early Monday, an SAIC subsidiary said it reached an agreement to conduct a multi-year transaction to sell about 18 acres of land, including four office buildings comprising about 900,000 square feet, a parking garage and surface parking lots.
SAIC plans to lease back two of the buildings for about a year (until the split is completed) and a third for seven years. The initial purchase price — which covers those three buildings and the leases back to SAIC — is $85 million, but SAIC said it expects the purchase price for the rest of the property to be based on the type of use the county approves. The company estimated that the price will be between $120 million and $140 million.
The purchase makes Meridian one of the largest landowners in Tysons as the area prepares for Metro’s Silver Line to begin running at the end of the year. Since its founding in 1993, Meridian has purchased more than 7.5 million square feet of property at a value of more than $2.6 billion.
The company’s principals, David Cheek, Bruce S. Lane and Gary E. Block, specialize in upgrading existing office buildings. They said in a phone interview Monday that despite the slow leasing market and cuts due to sequestration they believed Tysons was an enormously important market, particularly a location immediately adjacent to the coming Greensboro Metro station.
“It’s the downtown of Northern Virginia,” said Lane. “It’s a convenient location for companies that want to attract employees from all over Northern Virginia, as well as Maryland and the District.”
Cheek said the company plans to initially spend $20 million upgrading the two existing buildings and preparing them for new tenants. Meridian plans to add retail and other amenities as well. “We think that will be a competitive advantage on a lot of buildings at Tysons,” he said.
Long-term, Meridian’s partners said they will work off of the rezoning application that SAIC filed with Fairfax County that would allow development of a mixed-use project with residential, hotel, office and retail spaces.
According to the SEC filing, SAIC expects the deal to close in June. The company has not yet announced a location for Leidos, the larger of the two businesses. A company spokeswoman said it is expected to remain in Northern Virginia.
An earlier version of this story, which relied on a filing with the Securities and Exchange Commission and corroboration from the company, incorrectly identified the buyer. The buyer named in the earlier version said it is not involved and its name has been removed from this post. The story has been updated with the correct information.