CSC Building Secures $43M in Financing

NEW CARROLLTON, MD-The new 325,000-sf building at 7900 Harkins Road in Prince George’s County gets financing in the form of a $43-million permanent mortgage package structured by Richmond, VA-based real estate investment-banking firm John B. Levy & Co. Inc. The closing of the fixed-rate deal, which was originally negotiated last year, was not a foregone conclusion given post-Sept. 11 economic realities.

Developed by local partnership Vingarden Associates Inc., the 13-story structure was a build-to-suit project for El Segundo, CA-based Computer Sciences Corp. The systems company signed a 10-year lease on the entire building last spring, thereby consolidating several area offices. For CSC, the main draw of the building is its location directly across the street from the Internal Revenue Service, which is one of the company’s major clients. CSC won a multibillion-dollar contract to develop a new computer system for the federal organization back in 1998.

But what CSC considers a plus, could have turned out to be a major drawback in securing the financing package. With no federal terrorism insurance legislation in existence, many real estate construction projects have been put on hold or canceled–to the tune of $8 billion nationally. The building’s close proximity to the 1.2 million-sf IRS office could have been a factor in attaining insurance and monetary backing, given that the IRS could be construed as a prime target for a terrorist attack due to its government ownership. “Although we negotiated the forward transaction in the late summer of 2001, we were able to navigate through the concerns and challenges resulting since Sept. 11,” John B. Levy & Company Inc. president John B. Levy explains.