The former CA Technologies campus in Islandia currently has a...

The former CA Technologies campus in Islandia currently has a heliport and a day care center, as well as a baseball field and basketball and tennis courts. Credit: Newsday/Steve Pfost

Investors bought the former CA Technologies headquarters at enough of a discount that they have time to test the demand for a palatial office park, largely as is, before falling back on a more sweeping plan to redevelop it.

A team of investors and developers paid $24.1 million in October 2021 for the Islandia site, according to a deed. The property sold for eight-and-a-half times that — $204.3 million — when the software giant filled the entire 65-acre campus in 2006, according to a deed and village zoning records. The new owners held a loan on the property and negotiated the $24.1 million price while reaching an agreement to avoid foreclosure proceedings, property records show.

The $165.6 million loan in question last traded for $41.5 million, according to Trepp, an analytics firm that tracks mortgages packaged and sold as financial securities. The underlying office park was once valued at $212 million, but its estimated worth plummeted to $42.8 million as CA departed and the pandemic hurt the property's chances of attracting new tenants, said Trepp senior managing director Manus Clancy.

With less debt tied to their purchase, the new owners have time to assess whether they can attract one or two large tenants, said Paul Amoruso, a principal in the group that bought the site, Islandia Property Owner LLC. Others involved in the transaction include Axonic Capital LLC and Taconic Capital — both investment firms with offices in New York City — and the New Jersey developer Onyx Equities LLC, village planning documents show.

What to know

  • Investors paid $24.1 million for the former CA Technologies campus in Islandia.
  • The site went for $204.3 million in 2006, the last time it was sold.
  • The property's future is unclear, given that the new owners may hold out for new office tenants or transform the complex into warehouses.

As a backup, the owners are seeking approval to replace the 30-year-old office complex with up to 1.1 million square feet of warehouses, loading docks and tractor trailer parking, according to Village of Islandia planning documents and Amoruso.

“We have the ability to be patient because of the way the transaction was concluded,” Amoruso said. “That building was vacant for a year before we purchased it. They were trying to line up tenants, but they were in a different cost structure than we are.”

Demand for office parks

He and his partners may be waiting a while, real estate experts said. Large insular campuses, where every detail is designed for one corporation, aren't as popular; and offices of all types have emptied out as many white-collar employees work from home, according to Richard Murdocco, an adjunct professor of public policy at Stony Brook University. There are few firms looking for what village planning documents describe as a 778,000-square-foot office, said Clancy, the Trepp executive.

"Tenants of that size don't really grow on trees," Clancy said.

CA Technologies cut the ribbon in 1992 on what Newsday then described as an $85 million development. Located along the Long Island Expressway, the campus boasts a heliport, day care center and backup power supply, as well as a pond, baseball field and basketball and tennis courts, according to Amoruso, who helped CA assemble the property.

At the time, CA Technologies was the second-largest independent software company in the world and employed 7,800 people globally, Newsday reported. CA Technologies, previously called Computer Associates International, got its start in the 1970s by building a tool to help refrigerator-sized computers — called mainframes — identify unused space for saving files.

CA Technologies moved its headquarters to Manhattan in 2014, but 1,000 employees continued to work in Islandia. Broadcom, a semiconductor manufacturer, later acquired CA Technologies, whose lease was slated to expire in 2021.

Outlook for warehouses

The Village of Islandia changed the property's zoning from office to industrial use in late 2022, at the request of the new owners. Amoruso and his partners may create a warehouse hub because e-commerce has fueled the need for more industrial outposts, Amoruso said. To proceed, they would need the village to approve their site plans and issue permits to raze the offices and construct between 850,000 and 1.1 million square feet of warehouse space, Amoruso said.

But parts of Suffolk County may have a glut of warehouses if all of the industrial projects proposed are built, Murdocco said. He described putting up warehouses as "the path of least resistance" in a region where building badly needing housing can be controversial.

"What the Village of Islandia decides resonates beyond its boundaries, resonates beyond the Town of Islip and regionwide — especially at a site that was this significant," Murdocco said. "It was an economic focal point for Suffolk County, and this is the best we can do?"

The redevelopment plan would be a fitting way to deal with declining demand for corporate campuses, said Islandia Mayor Allan Dorman.

"The Village recognizes there is no market for office space for the foreseeable future," Dorman said in a statement. "This type of development will ensure the property remains in use and on the tax rolls."

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