Pitcairn completed construction on this 151,730 square foot office building in the third quarter of 2003. This Class A building has been leased to the Suffolk Country Department of Social Services for 20 years. This structure allowed us to receive permanent financing priced as if the mortgage was a bond issued by the County. With the help of our construction lender, Bank of America, we were able to secure $29 million in permanent financing through TIAA-CREF.
Pitcairn broke ground on the building in July of 2002, and directly managed the construction of the project. As a result, the construction lender allowed us to earn a construction management fee in addition to a development fee. Our ability to earn market rate fees for the services we provide enables us to cover the costs of operation, and is an important step toward being a self-sustained organization.
This project caps the development of a 12-acre site we acquired in 1999 through a complex foreclosure transaction for approximately $75,000 per acre. After acquiring the land, we were able to re-zone the property to allow for hotel usage. Subsequently we entered into a pre-paid, 99-year ground lease with a hotel operator for 6.5 acres at $346,000 per acre. We used the remaining 5.5 acre site in the development of the office building for Suffolk County. The construction lender's MAI appraisal valued the 5.5 acre site at $3.5 million, or $648,000 per acre.