WestGroup close to selling massive Tysons porfolio, sources say
With Fairfax County's plan for Tysons Corner in place, the area's largest commercial landowner is again close to selling its 130 acres of office buildings and land, a deal that could heavily shape how Tysons is developed.
WestGroup, the McLean-based developer headed by Gerald T. Halpin, is working on a deal to sell its portfolio to Credit Suisse Group, the financial services firm with U.S. headquarters in New York, according to sources familiar with the negotiations. They spoke on the condition of anonymity because they were not authorized by the companies to discuss the details.
Mark C. Lowham, WestGroup senior vice president, would not confirm any interest by Credit Suisse. He said there is "still a long ways before any transaction" but that the company had received numerous inquiries from investors and developers for the slew of office buildings and land that straddle the Beltway.
"Over the course of the summer I think we'll have some better direction about what Mr. Halpin and his partners want to do," Lowham said.
Credit Suisse attracted attention when it purchased a D.C. office building, 1099 New York Ave. NW, last September for $90.5 million. The company declined to comment.
WestGroup nearly sold the portfolio last year, to McLean-based Pence-Friedel Developers, but both companies said the deal fell through in January when it could not be financed.
Should the Credit Suisse sale go through, it would cap the development career of Halpin, the company's president, chief executive and father figure who bought the property with partners in 1962 and developed it in the ensuing decades. Halpin -- still the "first one in the office and the last one out," Lowham said -- turned 87 this year and his partners are in their 70s and 80s as well.
WestGroup could still have a role in how its property is developed as Metro arrives, however. As a financial company, Credit Suisse would need a development partner, and the deal could put WestGroup's second tier of executives, many of whom are in their 40s, in place as partners.
"One of the reasons Gerry and his partners have really strong reputations is that they always remain very flexible and keep their options open, and that's served them really well over 50 years here, so I think they continue to maintain some flexibility knowing that there are some really great opportunities," Lowham said.
Aaron Georgelas, managing partner of the Georgelas Group, another Tysons developer, said it was exciting to see plans for the property moving forward.
"Whether it's WestGroup doing it for themselves or Credit Suisse doing it with some other entity, it looks like they will be developed and we will get that anchor that Tysons Corner needs," he said.
Since the Pence-Friedel deal fell through, WestGroup has disposed of four buildings on the periphery of its holdings, piece by piece. It began by selling two buildings on Westpark Drive in January and June. On June 25 it announced the sale of 8100 Jones Branch Dr. in McLean, headquarters of Freddie Mac, to StonebridgeCarras and Walton Street Capital and is expected to close Monday (June 28) on the sale of the 152,000-square-foot Rappahannock building on Westbranch Drive, according to the company's broker, Eric Berkman, executive vice president at Grubb & Ellis.
WestGroup, however, has not asked Berkman to market any other properties. In another sign developers regarded as a run-up to a sale, in mid-June, WestGroup hired Transwestern, based in Vienna, to oversee the management and leasing of the properties, something WestGroup had long done on its own.
Thomas Fleury, a former WestGroup executive who now serves as managing director of land acquisitions and development for the Pennrose Group, would not speculate on Halpin's intentions but said that if WestGroup did sell, it would truly mark the transition of one generation of developers to another.
"You're seeing an era change," he said.