AOL announces sale of east side of Dulles campus
Friday, October 29, 2010; 8:55 PM
AOL agreed to sell the east side of its sprawling Dulles campus for $144.5 million Friday as part of an ongoing effort to raise money for its corporate overhaul.
Los Angeles-based CB Richard Ellis Realty Trust has signed on to buy the property, which includes 700,000 square feet of office space and about 22 acres of undeveloped land that AOL bought in 1996 before relocating its headquarters to New York.
If the deal is made final, which the parties say they expect will happen soon, AOL would bulk up its cash on hand to $750 million. In recent months, the company has also sold its ICQ instant messaging program and the social networking company Bebo, among other assets.
"A part of AOL's strategy during our turnaround has been to dispose of non-core assets," Artie Minson, executive vice president and chief financial and administrative officer, said in a statement. "While the Dulles campus is an important part of AOL's future, we simply had no need to continue owning the additional space - having already moved all of our talent in Dulles to one side of the campus."
Though Dulles remains the company's largest location, with more than 1,800 employees, that number has declined in recent years, and the company has consolidated into buildings on the west side of Pacific Boulevard.
The new property owners intend to maintain a 10-year lease that defense contractor Raytheon signed in 2009 for 600,000 square feet of the office space on the campus, which is about five miles from Washington Dulles International Airport. A spokeswoman said there are no plans yet to develop the vacant land, though the company would entertain offers to build for a specific buyer.
"We find this is an excellent location and very attractive set of resources with respect to the Northern Virginia market," said Phil Kianka, executive vice president and chief operating officer at CB Richard Ellis Realty Trust. The trust's parent company, CB Richard Ellis Group, represented AOL in the deal.
Though some property owners have struggled to fill space in the Dulles corridor, Kianka said "that may be part and parcel due to things that have certainly gone on in the economy, but [the area] has always proved to be a strong performing market given the labor pool that they have there."