Business software giant CA Inc. sells its Long Island HQ

Long Island Business News, Aug 22, 2006 by Dawn Wotapka Hardesty

Business software giant CA Inc. has gone from landlord to tenant in one of Long Island's most expensive building sales on record.

The Islandia company sold its 778,000-square-foot headquarters for $204.3 million on Aug. 15, according to documents filed late Monday with the Securities and Exchange Commission. But CA, formerly known as Computer Associates, isn't moving - it will pay rent of $1.3 million a month (due by the 5th) to lease back the campus, located just off the Long Island Expressway.

The 15-year lease, which can be expanded for a total of 35 years, was inked with Island Headquarters Operators LLC and Island Operators LLC, an investment group managed by CRIC Capital - the Boston investment firm the Long Island Business News first reported as the buyer in late May.

CRIC Capital is a partnership between Corporate Realty Investment Co. LLC and Prudential Real Estate Investors that has worked with Applebee's Neighborhood Grill & Bar and Kmart Corp. Public documents state the sale is "as is."

CRIC didn't comment.

CA, which is in the process of laying off 1,700 employees worldwide, said in a Tuesday morning statement, "Leasing space is a standard business practice and frees up capital that can be used for other corporate purposes. CA signed a long-term lease for the Islandia facility and remains committed to Long Island."

In a March offering memorandum, CA set the property price at $195 million - about 4.8 percent less than it got in the Aug. 15 sale.

The CA sale averaged out to about $263 per square foot. Last year, Reckson Associates Realty Corp. paid $218 per square foot for EAB Plaza, now known as Reckson Plaza. The Gateway at Lake Success cost Stellar Management about $170 per square foot, while Apollo Real Estate Advisors and other partners ponied up $71 for each square foot of three former JPMorgan Chase buildings in Hicksville.

Shares of CA (NYSE: CA) slipped 9 cents to trade at $23.56 apiece Tuesday morning.