Developer WestGroup sells office buildings in Tysons Corner
Friday, July 23, 2010
The largest commercial landowner in Tysons Corner announced on Thursday that it had sold 115 acres of office buildings and land to a subsidiary of Credit Suisse Group, a financial services company with U.S. headquarters in New York.
The deal is one of the largest real estate transactions in the Washington area in recent years, both by acreage and value. A source familiar with the transaction, who spoke on condition of anonymity because the companies had not authorized discussion of the details, said the price was about $250 million.
WestGroup, a McLean-based developer headed by Gerald T. Halpin, bought the property in 1962 and developed it in the ensuing decades. Under an unusual arrangement, much of the WestGroup team will remain developers of the property and continue to play a central role in the evolution of Tysons Corner as four Metro stations are built there.
Halpin said in a news release that he was pleased with the transaction and that the Credit Suisse company, DLJ Real Estate Capital Partners, "showed an appreciation for the history of this portfolio as well as its importance to the future of Tysons Corner and Fairfax County."
The property includes more than a dozen office buildings located south of the Dulles Toll Road and straddling the Beltway. Bill Helm, managing director with DLJ, said in the release: "We believe the WestGroup portfolio represents a unique investment opportunity given the strength of the greater Washington, D.C. metropolitan area and the region's substantial infrastructure improvements."
The sale caps the development career of Halpin, the company's president, chief executive and father figure who turned 87 this year.
Many WestGroup employees who helped oversee the portfolio will continue their work. DLJ created a new company dedicated to the property, Cityline Partners, and hired much of WestGroup's development team there to manage and develop it.
Mark C. Lowham, WestGroup senior vice president, said about a half-dozen WestGroup employees were making the move. Halpin will serve periodically as a senior adviser.
WestGroup nearly sold the portfolio last year to McLean-based Pence-Friedel Developers, but the deal collapsed in January when it could not be financed.
Since the Pence-Friedel deal fell through, WestGroup has sold four buildings on the periphery of its holdings this year, piece by piece. It began by selling two buildings on Westpark Drive before it announced the sale of the headquarters building of Freddie Mac. It subsequently sold the 152,000-square-foot Rappahannock building on Westbranch Drive.
Lowham said WestGroup still has investment assets under management but no longer owns any real estate.