TYSONS CORNER, VA-The Meridian Group has closed on the acquisition of three buildings at Science Applications International Corp.'s 18-acre corporate headquarters campus, announced earlier this year, after securing about $105 million in debt financing. Eastdil Secured helped Meridian arrange the financial package, which included assistance in the equity component of the investment.

The transaction, as it was described earlier this year, consisted in the trade of four office towers totaling 900,000 square feet and a 600,000 square foot sale leaseback with SAIC. The fourth building is being torn down for redevelopment. SAIC filed plans to redevelop the property with an additional 3 million square feet of mixed uses, including office, residential, retail, and hotel. Now Meridian will take over these plans.

The initial phase of the deal -- that is, the sale of the towers, and lease back to SAIC -- was said to be clocking in around $85 million. The other parcels will likely close in the range of $120 million to $140 million, according to a securities filing, assuming nothing dramatically changes in the development plan.

There was a broad array of investors and institutional partners interested in the deal, according to a prepared statement by John Kevill, managing director of Eastdil Secured.

The buildings were acquired through Meridian's $160-million discretionary real estate fund, Meridian Realty Partners I, which is one of the largest equity funds focused on real estate in the DC area. (Other office buys Meridian has made with the fund include One Ballston Plaza in Arlington, Cameron Run in Alexandria, and Tysons Technology Center in Tysons Corner).

The fund, together with co-investment from limited partners, provided $75 million of equity for the towers' acquisition and repositioning, together with the first anticipated land takedown, according to a prepared statement from Gary Block, managing director of The Meridian Group. Block worked closely with Jeffrey Zell, president of JM Zell, on the transaction.

The property is located at the new Greensboro Metro station, which is expected to open in early 2014. It is bounded by Westpark Dr. and Greensboro Dr., in a major submarket known as The Hill near Tysons Galleria Mall.

SAIC will occupy Tower III; Meridian will be renovating Towers I and II with such upgrades as new lobbies and common areas, elevator cabs, HVAC systems, and pedestrian walkways and plazas near the Metro station. The company is investing $20 million in these upgrades.

Next will come the development of some 3.2 million square feet of mixed-use space, albeit in the longer term. Plans call for more than 1.3 million square feet of residential space and over 1.1 million square feet of office space, as well as a 400-room hotel and up to 200,000 square feet of retail space next to the Towers.

Instant Insights /

Meridian Closes SAIC Deal with $105M in Financing

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