BlackBerry to Sell 19-Building CRE Portfolio in Search of Funds
- Feb 13, 2014
BlackBerry is set to sell a large chunk of its real estate assets in 2014, as the company has sought the guidance of real estate brokerage CBRE in the hopes of moving out its office space. The Canadian tech giant has seen its impact on the worldwide mobile market wane in recent years with the emergence of players such as Apple Inc. and Google Inc. It is the company’s objective to source as much capital as possible from its commercial real estate assets, in order to roll out a new business plan set to revitalize the company.
The company is looking to sell 19 buildings totaling 3 million square feet of office space in the Canadian real estate market. BlackBerry’s new CEO, John Chen, is set to reposition the mobile company, out of the consumer market, and closer to its roots, drifting towards the professional market. The Canadian tech company has also entered an agreement with Foxconn Technology Group, a move that allows BlackBerry to outsource some of its design and production costs. The company is willing to sell even buildings that it currently occupies, and then immediately lease them back from their new owners.
The 19 buildings range in size between 29,000 and 400,000 square feet of office and warehouse space. The properties were mostly built during the last decade, with only four of the assets, or 17 percent of the available space, being completed pre-2000, according to the marketing brochure created by the seller. The buildings comprise the Northfield campus, University campus, Cambridge campus, Ottawa campus and Mississauga ACC campus.
The company’s intentions were revealed about a month ago when BlackBerry sold a five-building package to the University of Waterloo, in a deal worth approximately $37 million, World Property Channel reported. The deal will close soon, and includes 300,000 square feet of space and 1,000 parking spots in the company’s hometown.
The recent moves towards reorganization have yielded positive results already. Since the beginning of the year, company shares have gone up to a value of $9.93/share on Wednesday, Bloomberg reported. This value marks a major increase for the company’s image, its shares having rocketed 33 percent since the start of 2014.