Navistar Closes on Alcatel-Lucent Campus
- Dec 01, 2010
December 1, 2010
By Barbra Murray, Contributing Editor
Even after it knocked out the competition many months ago, Navistar International Corp. ran into a few roadblocks in its plans to acquire the former Alcatel-Lucent East Campus in Lisle, Ill., for its new headquarters, but all hurdles have been cleared and the trucks and diesel engines manufacturer is now the official owner of the 1.2 million square-foot office compound.
Boasting a location approximately 25 miles west of Chicago in the I-88 Hi-Tech Corridor, the Alcatel-Lucent Campus is within close proximity to the area’s major highways and commuter infrastructure. Real estate services firm UGL Services kicked off the marketing of the nine-building campus on Alcatel-Lucent’s behalf in March 2009, and even in the midst of a down market, eager buyers near and far wanted to snap up the 87-acre property.
“We did a national and international marketing effort and the interest was very high,” Christopher Wood, senior vice president and managing director with UGL, told CPE. “While we had significant investor interest, user interest was more in line with Alcatel-Lucent’s goals and objectives. We were looking for companies that saw the value in the existing property and could envision their own operations there.”
Despite the fact that neither the real estate market nor the economy have fully recovered, UGL was in a position to be picky, to secure the most appropriate new owner. “We had offers all over the board, but the goal in this type of project is to find the right buyer with the right objectives and needs,” Wood said. “Investors look at a property differently than users. Users focus on what needs to be done to get the property to where the company needs it to be, while investors look at how they can reposition it and carry it through lease-up.”
Navistar relied on Jones Lang LaSalle for representation in the transaction, which will allow the company to relocate from its current home base in Warrenville and set up its corporate headquarters offices and R&D activities at the sprawling Alcatel-Lucent site just three miles away.
Parties involved in the deal are not disclosing its financial terms. However, a strategic move by state officials, eager to keep Navistar in Illinois, gives some indication of the price tag attached to the asset, as well as the substantial funds that will be invested to tailor the campus to the new tenant’s needs. In September, new legislation paved the way for the Illinois Finance Authority to award $145 million in Recovery Zone Facility Bonds to Navistar for the acquisition, expansion and renovation of the property and other related tasks.
Of course, there is nothing like a good incentives package to coax a company into staying put, but Navistar’s decision to renew its commitment to the Chicago area was not always about money. At one point during purchase negotiations, community opposition to traffic and other issues that would accompany the company’s move discouraged Navistar and pushed the company to consider relocating outside of Illinois. However, local and state support, a revised plan and the appeal of revenue and high-paying jobs ultimately drowned out naysayers’ complaints. With Navistar remaining in suburban Chicago, the area job market will retain and see the creation of an aggregate 3,100 white-collar positions.