|The Skyline Center|
The property is being sold – in a substitute trustee’s sale – from the steps of the county courthouse after the owner, Vornado Realty Trust, defaulted on the terms of its $678 million mortgage.
The 2.6 million square foot property, consisting of eight buildings, is the fifth-largest tax-generating property in Fairfax County, with a taxable assessment of nearly $325 million, WBJ states. But that’s a sharp drop from an assessment of more than $680 million in 2009.
Occupancy rates have plummeted to just over 40 percent. Among the tenants are the U.S. Fish and Wildlife Service, U.S. Department of Justice, Leidos Holdings Inc., and Science Applications International Corp.
According to WBJ, “the offering is likely to generate a significant amount of interest from developers, more so for the prospect of redeveloping or repositioning the struggling campus than the less feasible prospect of a fresh coat of paint and a new marketing campaign to try to bring it to full occupancy.”
UPDATED, Dec. 21: No one bid on Vornado Realty Trust’s Skyline complex at a Dec. 21 foreclosure auction, the Washington Business Journal reports. That means the eight-building, 2.6 million-square-foot property in Bailey’s Crossroads, which is more half vacant, will be sold for $200 million to representatives of the noteholders that initiated the auction.