Nortel Hangs 'For Sale' Sign on Calgary Campus

by: Mark Evans December 02, 2008 | about stocks: NT    
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Mark Evans

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After announcing plans to close its 59-acre Calgary campus six months ago, Nortel (NT) put the “For Sale” sign on the Westwinds Business Complex

Described as “one of the choicest real estate properties on the [Calgary] market today”, has been assessed by the city at $105-million, not including 3.6 hectares of vacant land.

“This campus is a jewel, the last in Canada, close to an international airport, high in profile, built to world-class technical and amenity standards, with lots of land to expand and densify over years to come combined with massive existing parking. Perhaps even helipads. For a growing corporation or use for education, or government integration or the like, it has no equal in Canada,” Christopher Ridabock, CEO with DTZ Barnicke told the Calgary Herald.

Given the current economic climate, it will be interesting to see whether there are buyers for the properties, and, if so, how much they would be wiling to pay.

Nortel expanded the complex in 2000 in a way to consolidate its real estate locations.

A CEO Who Cares?

When Nortel announced in September plans to slash costs and eliminate 1,300 employees, I wondered why CEO Mike Zafirovski hasn’t made a symbolic gesture by taking a salary cut or declaring he wasn’t going to take a bonus. In the scheme of things, it wouldn’t make much of a financial difference but it’s a solid message to send to employees.

In Japan, Japan Airlines CEO Toshiyuki Shinmachi took pay cuts over three consecutive years to the point where he earned less in 2007 than many of his pilots. Many North American CEOs could learn a lot by watching this video:

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This article has 2 comments:

  •  
    Dec 02 06:59 PM

    Um.... you mean "for rent"?

    Who is going to buy that place in this market?

    Or... should we say, it is already pretty rent when Nortel was in it?
    Reply | Link to Comment
  •  
    Dec 03 02:32 AM
    Uh, no... for sale not for rent! This is Calgary - not America. Our banks are fairly healthy and still lending money and our people haven't seen the big job losses or home foreclosures (yet). Our business community is still fairly strong though there is certainly a lot of instability in the world and people might hold off to purchase the building. Our economy is somewhat dependent on oil and gas, and with the prices slipping we may start to feel things - but we haven't felt a thing yet.

    It's a beautiful building with lots of parking and in a good location in a growing and VERY busy city with not enough vacant buildings. We have one of the tightest real estate markets in the world, especially commercial real estate. Our vacancy rate is about 4.1% right now. There were times when there was no vacant space available. Unemployment is still extremely low.

    "And there are 5.5 million square feet of prime AA and A class space under construction in the downtown market of which 718,500 square feet is expected in 2009, 3.1 mil-lion square feet in 2010 and 1.7 million square feet in 2011.

    Of the downtown space under construction, 70 per cent is already preleased, according to the report."

    Believe it or not, some companies are actually doing very well and expanding. It might not be quick to find a buyer it the current environment- but it will happen. Right now Canada has some political instability that just popped up - and if the Liberals perform a coup and oust the Conservative government which just won the election six weeks ago, we could be in for some problems. The Liberals ran on a platform of taxing the hell out of Alberta and the Oil Sands/Oil and Nat gas producers and shifting that wealth 3,000 miles away to Ontario and Quebec. A similar thing happened in the 70's under the Liberals and it was devestating. Guess we'll see. Combine falling oil prices with Liberals in power and wanting to implement a Green Shift Plan - and America dragging the rest of the world into recession - well, it should be interesting.

    But so far we've been untouched. *crosses fingers*

    We will feel some pain, no dobt about that - but nothing like America or the rest of Canada. We still have labour shortages and hiring signs all over. I'm not saying that can't change - just that we are in better shape than most places.

    On Dec 02 06:59 PM No Comment wrote:

    >
    > Um.... you mean "for rent"?
    >
    > Who is going to buy that place in this market?
    >
    > Or... should we say, it is already pretty rent when Nortel was in
    > it?
    >
    Reply | Link to Comment
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