A five-story office building called The Carolyn is being developed by the Carol Square Corp. on a 3.5 acre tract as the intersection of 1.66 and Rte. 123 in Fairfax City. Walker & Dunlop, which will handle leasing and management, arranged perment financing of $4 million for the building with Connecticut Mutual Life Insurance Co. Kasen & Svalbeished next summer.

Builder T.G. Fish is completing a post and beam house, manufactured by the Timberpeg firm, in Romancoke on Kent Island, Md. There are handslit cedar shakes on the roof and rough-sawn board and batten siding. Rick Gesue, of Phoenix, Md., area dealer for the Timberg houses, which are manufactured in Claremount, N.H., has scheduled an open house Nov. 4 and 5 at the site on Margaret Drive.

C.J. Cross & Associates, a commercial mortgage banking firm based in Vienna, Va., has arranged a $3.1 million permanent mortgage loan on the 11-story Montgomery office building on Montgomery Lane in Bethesda. The building was recently purchased by a partnership headed by Ralph Lugbill and Ward Dworshak, who plan to renovate the 14-year-old building.

The Sterling Park Shopping Center in Loudoun County has been sold by U.S. Steel Corp. to Gelman Construction Co. for $1.95 million. The 13-year-old shopping center has 19 stores.

Barnes, Morris & pardoe Realty Associates Inc. is handling the leasing for Sutton Center, a three-story building being developed by Lawrence N. Brandt at 3201 New Mexico Ave. NW. It is scheduled to be finished next spring.

The Robert T. Foley Co. has opened MacArthur Terrace, a grouping of seven contemporary houses priced from $228,000, in the 5300 block of MacArthur Boulevard NW. Sales are being handled by Burr, Morris & Pardoe.