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  • ozob99@yahoo.com
    Parking for 3,900, wooded lot, just $266M AT&T s lavish corporate headquarters in Basking Ridge will be a tough sell 11/07/01 BY GEORGE E. JORDAN STAR-LEDGER
    Message 1 of 2 , Nov 12, 2001
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      Parking for 3,900, wooded lot, just $266M
      AT&T's lavish corporate headquarters in Basking Ridge will be a tough
      sell
      11/07/01
      BY GEORGE E. JORDAN
      STAR-LEDGER STAFF

      AT&T picked a tough time to put it mammoth headquarters in Basking
      Ridge up
      for sale, commercial real estate executives say.

      Only about a half-dozen companies interested in the New Jersey market
      are
      big enough to fill the seven interlocking buildings filled with such
      amenities as wood-burning fireplaces that date to
      better times for the troubled telecommunications giant.

      But all the potential suitors -- Merrill Lynch, American Express,
      Johnson &
      Johnson, Novartis AG, Verizon Wireless and Pharmacia -- either
      purchased
      headquarters in recent years or scattered their operations across the
      region
      in the wake of World Trade Center disaster.

      A leading candidate, American Express, has vowed to return to Lower
      Manhattan, where its headquarters next to the Twin Towers was damaged
      but
      not destroyed. Another potential buyer, Merrill Lynch, has significant
      offices in Hopewell, where it has shifted workers displaced by the
      terrorist
      attacks.

      It all adds up to AT&T facing an uphill climb to sell the facility and
      increases the likelihood that whoever buys the 140-acre campus --
      valued by
      the state at $266 million -- will acquire it at a deep discount.

      "It's a great corporate building for the right type of user, but how
      deep
      the market is for the right type of user is in question in this
      economic
      climate," said Mark Yeager, president of Gale & Wentworth, a major New
      Jersey developer.

      AT&T Chairman C. Michael Armstrong announced plans last month to sell
      or
      lease the sprawling headquarters as a cost-cutting move. He said 3,200
      employees would move during the next year to more modest headquarters
      at the
      company's network operations center in Bedminster.

      Gary Morgenstern, AT&T's spokesman, said the company was in contract
      negotiations with a real estate agent to market the property. "Our
      preference is to sell the building outright," he said. "I am very
      confident
      we are going to find a buyer for the building. One visit and you fall
      in
      love with it."

      Morgenstern declined to identify the listing agent, but he confirmed
      AT&T
      already has Cushman & Wakefield of New Jersey under contract to
      sublet its
      other empty office space. Donald Eisen, Cushman's executive managing
      director, declined comment.

      A major real-estate figure close to Cushman and one potential buyer
      said
      AT&T faces a tough sell with both the national economy and New
      Jersey's
      commercial real estate market in a slump.

      "It's a very special use," the real estate executive said. "You've
      got to
      have somebody who wants to dance and make a statement and the only
      statement
      anyone is making is 'Look out!'"

      The AT&T campus, built in the 1970s, is comprised of a series of
      buildings,
      none higher than 12 stores. Most have views of wooded hillsides.
      There is a
      two-story cafeteria, a helipad, a barbershop, a fitness center,
      jogging
      trails and an imposing lobby with an indoor waterfall.

      The features that make the facility an architectural marvel also make
      it
      inefficient. Half the 2.6 million square feet is an underground
      parking
      garage for 3,900 cars. The actual office buildings have a 40
      percent "loss
      factor" -- unusable space taken up by large lobbies, a 33-mile
      labyrinth of
      hallways and a dozen courtyards.

      AT&T joins a series of Fortune 500 corporations faced with a glut of
      empty
      offices after waves of layoffs in the past year. Lucent Technologies,
      Kraft,
      Tyco and BASF all are soliciting tenants to sublet their surplus
      office
      space.

      AT&T's Basking Ridge campus is surrounded by unused office space. It
      is part
      of the Parsippany- Route 287 submarket, where 1.1 million square feet
      of
      offices space offered for sublet in the third quarter pushed the
      vacancy
      rates to 21.2 percent.

      Empty office space was flooding the market before Sept. 11, and fewer
      companies have been shopping for it since terrorists slammed two
      jetliners
      into the Twin Towers, bombs started falling in Afghanistan and the
      nation
      started wondering whether anthrax was contaminating the mail.

      "There's a lot of space out there now. Companies are in a wait-and-
      hold
      pattern right now, trying to figure out their business plan and their
      strategy in 2002," said Stephen Jenco, an analyst at Grubb &
      Ellis. "There's
      going to be a small group of companies that can step forward. It's
      going to
      be very tough."
    • long-lines@att.net
      Sounds like a perfect location for NSA-North ;)
      Message 2 of 2 , Nov 13, 2001
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        Sounds like a perfect location for NSA-North ;)

        > Parking for 3,900, wooded lot, just $266M
        > AT&T's lavish corporate headquarters in Basking Ridge will be a tough
        > sell
        > 11/07/01
        > BY GEORGE E. JORDAN
        > STAR-LEDGER STAFF
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