The sale price of a Long Island office park is grim reminder of the perils in a sagging commercial real estate market, particularly for office campuses designed with one company in mind.
A group of investors and developers purchased CA Technologies’ former office park at 1 Computer Associates Plaza in Islandia for $24.1 million, Newsday reported. The transaction took place in October 2021, but the price was not previously reported.
The buyers included Paul Amoruso of Oxford Hospitality, Axonic Capital, Taconic Capital and Onyx Equities. The property has been vacant for years.
Its sales price is a staggering drop from when the 778,000-square-foot property last sold for $204.3 million 15 years earlier. At the time, the software company occupied the entire 65-acre campus.
Part of the recent purchase price was the negotiation of a loan on the property, held by the new owners. The agreement between the sides helped avoid foreclosure proceedings for the Suffolk County property.
The loan originated for $165.6 million, but was previously sold for $41.5 million, according to Trepp. That mirrors the drop in value for the office park, which was once valued at $212 million. The company relocated its headquarters to Manhattan in 2014 and let its Islandia lease expire in 2021. Following CA’s departure and the pandemic, the estimated worth dropped to $42.8 million.
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The development reportedly cost $85 million and opened in 1992. Features include a heliport, day care center, pond, baseball field, basketball court and tennis courts.
Soon, it may not be an office park at all. While the owners don’t have to rush on a decision after negotiating down the debt, they have sought approval for 1.1 million square feet of warehouses, loading docks and tractor trailer parking.
The Village of Islandia is supportive of a potential transformation from office space to industrial space, changing the property’s zoning late last year. Officials would still need to approve site plans and issue permits.
“The village recognizes there is no market for office space for the foreseeable future,” Islandia Mayor Allan Dorman said in a statement. “This type of development will ensure the property remains in use and on the tax rolls.”
— Holden Walter-Warner