News of corporate expansions, relocations, extensions, closures, layoffs, lease cancellations and mergers has been consolidated into Lease Up/Lease Down. Look to Lease Up/Lease Down every week for valuable information that can be used as a source for business leads.
In this week's issue:
AOL prepares to reduce its staff by 1/3
Aetna plans jobs cuts for this quarter... and the next one
Starwood Hotels relocates to Stamford
Harley Davidson proposes a contract to its York employees
Reader's Digest moves its HQ and evaluates its leases
Robert Morris University renews and expands in Chicago
Avid relocates its world HQ
RTC signs for 500,000 square feet
Plus, we bring you news on other major lease deals.
AOL Cuts the Hard Line
Earlier this month, CoStar reported that
100 layoffs at AOL were only the tip of the iceberg as CEO Tim Armstong prepares to separate his company from Time Warner. It was estimated that about 1,000 jobs could be lost.
Sometimes, estimates fall short.
AOL said in a company filing last week that it is cutting more than one-third of its staff, pending approval of a new restructuring plan and the successful completion of its "spin-off" from Time Warner. If the plan is approved, approximately 2,500 of AOL's 6,900 employees would lose their jobs. The Internet company said that the layoffs would be conducted on a voluntary and involuntary basis.
AOL expects to reduce annual operating costs by $300 million as a result of the restructuring. However, it also anticipates a charge of $200 million in the first half of next year, if the plan takes effect.
AOL saw its third quarter revenue drop 23 percent to $777 million, after decreases in subscriptions and advertising sales.
Aetna Lays Off 625, Places More on Life Support
Last week, Aetna said it was cutting back on 1.76 percent of its staff, or about 625 employees.
The layoffs come as part of a new plan by the insurance company to reduce costs amid a drop in membership. According to the company's third quarter 2009 results, medical membership decreased by 25,000, pharmacy membership decreased by 79,000 and dental membership decreased by 386,000.
"The economic downturn has had a significant impact on our customers, said Ronald A. Williams, chairman and CEO of Aetna. "In addition, we must prepare for the impact that health care reform and regulatory changes may have on our business."
In addition to the layoffs, the Hartford, CT-based company plans to consolidate several field offices to reduce real estate costs. However, Aetna said that it is not exiting any markets.
As a result of the plan, Aetna estimates that it will incur about $12 million in severance costs and $28 million in charges related the real estate consolidation.
Furthermore, the health insurer said that it expects to make a similar number of job cuts at the end of first quarter 2010, which would put the total to well over 1,000 workers. The financial impact of those reductions is expected to be announced once a final decision is made.
Aetna employs approximately 35,500 people, nationwide.
Starwood Hotels Checking in for Long Stay in Stamford
Starwood Hotels & Resorts Worldwide Inc. is bringing 800 jobs to Stamford, CT, moving its headquarters to the Harbor Point area in 2012.
The hotel giant, which owns the Sheraton, W, St. Regis and Westin lines, leased 250,000 square feet from Building & Land Technology at 333 Ludlow St. Starwood is spending about $40 million in renovations to the existing office complex, which includes outfitting its space for LEED certification.
Starwood is relocating from the 134,000-square-foot office building at 1111 Westchester Ave. in White Plains, NY.
The Department of Economic and Community Development is assisting Starwood with a $9.5 million loan, and could provide up to $75 million in Urban and Industrial Site Reinvestment Tax Credits. Starwood is also likely to receive $5 million in sales tax exemptions on building materials through the Connecticut Development Authority.
"For months I have worked with Starwood executives and my economic development team to make this deal - and the jobs and investments it brings - a reality for the people of our state," said Governor Jodi M. Rell.
Neal Golden, Ross Perlman and John Goodkind of Newmark Knight Frank represented Starwood Hotels in the lease deal. Building & Land Technology received in-house representation from Carl R. Kuehner, president and CEO, and Dean Shapiro, COO.
"Starwood's decision to relocate its headquarters to Harbor Point validates our decision to invest in the redevelopment of Stamford's South End as an ideal 'smart-growth' community," said Kuehner.
Lease terms were not disclosed, but it is believed it to be a long-term deal, of 15 years or more. Starwood President and CEO Frits van Paaschen said that the company would be saving 20 percent in annual rent.
Pennsylvania Harley Workers Face Tough Decision
Harley Davidson has given its 2,000 York, PA, employees a choice. The motorcycle company won't move out of state if it has the freedom to cut approximately 1,000 jobs.
Harley presented employees with a 58-page, seven-year union contract that ensures its tenure in York if it can make some changes - most notably, major job cuts. The cost is high, but not as high as Harley shuttering its largest plant and moving operations to Kentucky.
In addition to the job cuts, the plan outlines reductions in employee benefits, such as vacation time, healthcare and retirement.
Harley also said it would invest up to $90 million in York operations.
If York workers do reject the plan, then it is doubtful that Harley would see any further reason not to relocate to Shelby County, KY, where a large land parcel is being rezoned and state officials are preparing an incentive package. The motorcycle company had been considering
three sites for its potential relocation before naming Kentucky as the winner.
A rejection of the contract is highly unlikely, however, as Harley is vital to York's economy. Even Kentucky Governor Steve Beshear said last week that the chances of the plant being moved to Kentucky have been "significantly diminished."
UPDATE: The contract was approved by Harley workers on December 2.
Reader's Digest Moving HQ, Evaluating Property Leases
Reader's Digest, which
filed for bankruptcy in August, is planning to relocate its Chappaqua, NY, headquarters, moving 650 employees to White Plains and Manhattan.
The magazine publisher, which has seen a steep decline in profits and advertising sales, has been based at 480 Bedford Road since 1939. However, it sold the 760,737-square-foot office complex in 2004 for $59 million and has since been occupying portions of it on two leases of 20 years and 10 years. Reader's Digest now intends to leave the facility, moving 525 of its employees to downtown White Plains and 125 to its offices at 750 Third Ave. in New York.
However, the company has included its headquarters space on a list of unexpired leases that it is currently evaluating. Unlike the eight leases that Reader's Digest rejected outright in August, the company has determined that these leases might still serve some purpose in the publisher's restructuring efforts. Reader's Digest has requested an order that would extend the deadline to either reject or assume the leases, by 90 days. The Bankruptcy Code requires that a debtor assume or reject an unexpired lease less than 120 days past the petition date.
The request has been met with opposition from the landlords of 480 Bedford Road, SG Chappaqua A LLC and SG Chappaqua B LLC (SGA and SGB), which have filed an objection. The property owners argue that the subject space would be unable to be marketed to other potential tenants during the extension period. Additionally, the space could not be rezoned or redeveloped throughout the proposed limbo state.
The landlords also doubt Reader's Digests' willingness to pay all rent obligations during the post-petition period, stating that the tenant has failed to make certain TI payments since October. The owners assert that Reader's Digest should be required to make these payments as a condition of the requested extension.
| Company | Address | Affected Parties | Original Exp. Date | | The Reader's Digest Association, Inc. | 480 Bedford Rd, Chappaqua, NY | SG Chappaqua A LLC | 12/21/2024 | | The Reader's Digest Association, Inc. | 480 Bedford Rd, Chappaqua, NY | SG Chappaqua B LLC | 9/21/2017 | | Reader's Digest Sales & Services, Inc. | 100 Bush St, San Francisco, CA | 100 Bush Corp. | 9/30/2011 | | The Reader's Digest Association, Inc. | 260 Madison Ave, New York, NY | 260/261 Madison Equities Corp. | 7/31/2012 | | AllRecipes.com, Inc. (Reader's Digest) | 3317 3rd Ave S, Seattle, WA | 3317 3rd Ave S LP | 10/31/2010 | | Compass Learning (Reader's Digest) | 203 Colorado St, Austin, TX | CR IV Industrial, LP | 4/30/2011 | | World Almanac Education Group, Inc. (Reader's Digest) | 23221 Morgan Ct, Strongsville, OH | Duke Construction LP | 8/15/2016 | | World Almanac Education Group, Inc. (Reader's Digest) | 23221 Morgan Ct, Strongsville, OH | aNETirder, Inc. | 8/15/2016 | | Reiman Media Group (Reader's Digest) | 5602 Broad St, Greendale, WI | Grandhaven LLC | 1/31/2010 | | Direct Holdings America (Reader's Digest) | 8280 Willow Oaks Corporate Dr, Fairfax, VA | KBS Capital Advisors, LLC | 2/28/2015 | | The Reader's Digest Association, Inc. | 16 E 34th St, 15th Fl, New York, NY | Makovsky & Co. Inc. | 3/31/2010 | | Reader's Digest Sales & Services, Inc. | 233 N Michigan Ave, Chicago, IL | Parkway 233 North Michigan LLC | 2/28/2010 | | Home Service Publications (Reader's Digest) | 2915 Commers Dr, Eagan, MN | Roseville Properties Management Co. | 10/31/2013 | | Weekly Reader Corp. (Reader's Digest) | 1000 Taylors Ln, Cinnaminson, NJ | 1050 Taylors Ln, Associates LP | 12/31/2011 | | Reader's Digest Sales & Services, Inc. | 5455 Corporate Dr, Troy, MI | Timberland One LLC | 1/31/2012 | | The Reader's Digest Association, Inc. | 16 E 34th St, 14th Fl, New York, NY | Wohio Holding Inc. | 4/30/2017 | Reader's Digest Sales & Services, Inc.
| 11111 Santa Monica Blvd, Los Angeles, CA | WW&LJ Gateways LTD. | 2/28/2010 | | |
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Robert Morris Univ. Expands to 323,000 SF in Chicago
By: Osei Okrah
Robert Morris University signed a 323,000-square-foot lease expansion and extension at 401 S. State St. The transaction is the largest lease deal in Chicago's central business district this year.
"This lease provides the university with a state of the art home facility and place to call home for a long time," said Joseph Learner, executive vice president, director and co-branch manager of Studley in Chicago, who represented the tenant. "The expansion space will support the school's future growth, allowing it to expand the programs it offers to its student body. In a difficult economic environment, RMU continues to grow and invest in downtown Chicago and throughout its campus system."
The deal included a 39,000-square-foot expansion, which doubles the school's space since it moved into 401 S. State St. 11 years ago. The property is an eight-story, 463,232-square-foot office building in the education corridor.
Robert Morris is the 10th largest private university in Illinois, and offers professional, career-focused education in a collegiate setting to diverse communities.
Anvan, managing partner of the ownership group of 401 S. State St., represented the landlord.
Avid Leases 203,000 SF in Boston Area
By: Laurie Forbes
Avid, a digital audio and video production business, inked a 10-year, 203,000-square-foot deal for office and R&D space in Burlington, MA. The company will move its world headquarters to Northwest Park, a 285-acre, 2.5 million-square-foot office park 16 miles northwest of Boston. Occupancy is scheduled for next June.
The tenant will relocate from Boston Capital Corp.’s two-story, 140,000-square-foot flex property at 1 Park West in Tewksbury.
Avid will fully occupy 75 Network Drive, a two-story, 97,946-square-foot property; 10 North Ave., a single-story, 30,208-square-foot structure; and floors one and two of 65 Network Drive, a four-story, 179,350-square-foot building. Nordblom owns the three buildings.
The production company will use the property mainly for office space plus manufacturing and logistics. An elevated pedestrian bridge is in the works to connect 65 and 75 Network Drive. Erland Construction will complete build-out of space on Network Drive including a state-of-the art customer center. Nordblom Development Co. will provide project management services. A connecting road between Network Drive and North Avenue is scheduled for completion by June.
Brian Hines and Michael Dalton, partners at FHO Partners, represented Avid. Tamie Thompson, managing director, Dan Cordeau, executive vice president, and Dan Kollar, assistant vice president, at Jones Lang LaSalle represented Nordblom.
RTC Takes 503,200 SF in Chicago Area
By: Emery Uwimana
RTC Inc. signed a 12-year, 503,200-square-foot lease with Duke Realty Corp. at Crossroads V in Romeoville, IL. The global retail marketer and product display manufacturer will relocate 3101 Kedzie Ave. in Chicago. Move in is expected by next spring.
Duke Realty developed Crossroads V at 801 N. Schmidt Road in March of this year. The Class A industrial building features 30-foot clear heights, 48 docks, four 12-foot by 14-foot drive-in doors, 110 parking spaces and 71 trailer parking spaces.
CB Richard Ellis’ Bill Frain, Todd Lippman, Jim Whalen and David Prell represented RTC. CB Richard Ellis’ Larry Johnson and Mike Mangan were the listing brokers for the property. Susan Bergdoll of Duke Realty negotiated on behalf of ownership.
American Institutes for Research leased 24,467 square feet in Peninsula Office Park, Building 3 in San Mateo, CA. Move-in is scheduled for next March. The two-story office structure at 2800 Campus Drive was built in 1974 and is one of nine buildings within the Peninsula Office Park. Bill Kurfess of Grubb & Ellis and Alan Guterman of Commercial Property Services represented the tenant. Ben Paul, John Barsocchini and Pat Yaeger of NAI BT Commercial represented the landlord, The Blackstone Group. (By: Lauren Greenwald)
Archway Marketing Services has renewed its lease of the 352,456-square-foot distribution building 1001 Trooper Road in Norristown, PA. Located in the Valley Forge Corporate Center, the facility delivered in 1969 and was expanded in 1980. Archway specializes in marketing, fulfillment and supply chain management services. Larry Maister with Cushman & Wakefield represented the landlord in this deal. Archway was represented in-house. (By: Vickie Katlic)
The Federal Energy Regulatory Commission leased 35,000 square feet at 1100 First St. NE in Washington, DC. FERC will occupy the space for 10 years and will relocate from 888 First St. NE. The agency is the first tenant reported for the 11-story, 348,000-square-foot office building. The property delivered in July and is the first building in the NoMa submarket to achieve LEED Gold certification. The U.S. General Services Administration represented FERC, while Evan Behr, Dan Dooley and Scott Franklin represented the owner, Tishman Speyer, in-house. (By: Covell Fitzgerald)
Humana Medical Plan renewed its 170,051-square-foot lease with Grubb & Ellis Realty Investors at NetPark in Tampa. The deal is valued at $18.5 million and runs through the end of 2016. The two-story, 910,608-square-foot office building at 5701 E. Hillsborough Ave. was constructed in 1999 and is one of the largest office complexes in the Tampa metropolitan area. Nat Cherry and Christine Teagle represented Grubb & Ellis, in-house. Jeff Tolrud of Colliers Arnold represented Humana. (By: Yuri Anderson)
Non-Stop Digital Services South LLC signed a long-term, 37,175-square-foot lease at 8800 Adamo Drive in Tampa, FL. The company is scheduled to relocate next month from 3803 Corporex Drive, also in Tampa. The 342,659-square-foot industrial facility, located just east of downtown Tampa, was built in 1975. Non-Stop Digital specializes in sales, service, and custom manufacturing of broadband products for the retail and industrial markets. Exeter Property Group owns the property. Mia Jarrell of Grubb & Ellis/Commercial Florida represented Non-Stop Digital. (By: Walt Brown)
Oliff & Berridge renewed its lease and expanded to 91,958 square feet at 277 S. Washington St. in Alexandria, VA. The law firm signed a 15-year deal. Known as the Atrium Building, the five-story office structure totals 138,507 square feet and is in Old Town Alexandria. Meredith LaPier, Pat Marr and Sally Wilson of CB Richard Ellis represented the law firm. Spencer Stouffer and Christopher Sowick of Cassidy Pinkard Colliers represented the landlord, Carr Properties. (By: Nick Mellott)
Performance Years, a supplier of classic Pontiac car parts, signed a 30,000-square-foot industrial sublease at 2705 Clemens Road in Hatfield, PA. The tenant is moving from 2880 Bergey Road. Built in 2006, the 80,000-square-foot warehouse is in the Clemens Business Center building park and is situated on approximately seven acres. Chris Pennington of Binswanger represented the sublessor, Touchstone Wireless Repair and Logistics. Nick Adams of Jackson Cross Partners represented Performance Years. (By: Melannie Skinner)
Pilgrim Films, a television production company, leased 36,877 square feet of office space at 12020 Chandler Blvd. in North Hollywood, CA. The 65-month deal is the largest lease transaction for a relocating tenant in Tri-Cities so far this year. The four-story office building measures 126,151 square feet and is part of Valley Corporate Center. Steve Salas, Joe King and Bob Safai of Madison Partners represented Pilgrim Films & Television. Nico Vilgiate, Todd Doney and John Murray of CB Richard Ellis represented the landlord, Chandler Corners LLC. (By: Keith Dornin)
Simmons Bedding Co. signed a five-year renewal for 236,500 square feet at 1700 Fairway Drive in San Leandro, CA. The company started in Kenosha, WI, with nine employees and originally manufactured wooden insulators and cheese boxes. Simmons Bedding is now based in Atlanta and is one of the largest mattress makers in the world. Kevin Ahaesy and Jason Ovadia of Jones Lang LaSalle represented the tenant. Orton Development and Libitzky Property Cos., the owners, were self-represented. (By: Ryan Munneke)
The Social Security Administration leased 68,000 square feet of office space at the Pamlico property at 3306-3308 N. Carolina Highway 54 in Research Triangle Park, NC. The 104,782-square-foot property was constructed in 1980 and renovated in 1998. Tom Fritsch represented the landlord, Highwoods Properties Inc., in-house, and the General Services Administration represented the SSA. (By: Kelsey Fralick)
Southwest Network, a non-profit organization, signed a 12,815-square-foot lease at Regency Park Chandler, Phase II. The seven-year lease is valued at approximately $1.75 million. The single-story office building is located at 1465 W. Chandler Blvd. and was completed in 2009. Nick Pelusio of GPE Commercial Advisors represented the landlord, First Arrowhead Property Investments Inc. Michael Waxman of Levrose represented Southwest Network. (By: Joyce McLaughlin)
Steelcraft Inc., a locally based after-market auto accessory distributor, signed a five-year renewal for 50,604 square feet with Oltmans Investment Co. in Corona, CA. The firm will occupy the entire building. The 50,604-square-foot industrial building at 2120 California Ave. was built in 1990 and Steelcraft has occupied the property since November of last year. Jim Litchfield and Joseph Maiolo of Inco Commercial Brokers represented the landlord, and Larry Null of Lee & Associates represented the tenant. (By: Tyler Boyd)
URS Corp. signed a six-year, 75,000-square-foot renewal at the 2020 Building in Santa Ana, CA. The government engineering contractor will remain in the space through October 2015. Rent averages $150,000 per month, full service gross. The net aggregate value is about $10.8 million. The five-story, 110,283-square-foot office building at 2020 E. First St. is near the Orange County Superior Courthouse. Jon McClintock of The Colton Co. represented the landlord, in-house. Bruce Shuman of Studley was the tenant representative. (By: Alexa Kruthers)
Vitacost.com Inc. leased the entire facility at 840 Pilot Road in Las Vegas for five years, with one five-year renewal option. The 155,000-square-foot warehouse was built in 1992 in the Airport/East Las Vegas Industrial submarket. Vitacost.com is based out of Florida and is a supplier and distributor of vitamins. Donna Alderson of CB Richard Ellis represented the landlord. The tenant represented itself. (By: Justin McClure)
WaferGen Bio Systems Inc. signed a 66-month lease for 19,186 square feet at 34781 Campus Drive in Fremont, CA. The genotyping, stem cell and cell biology research company will move into PDL Biopharma Building A, a 48,240-square-foot, Class B flex building that is part of Ardenwood Research Center. Rico Cheung and Gregg Domanico of GVA in Redwood City represented the tenant. Mary Hines, Jennifer Berrueta, Rico Cheung of the same office and Chris Rowe of GVA in Santa Clara represented the landlord, LBA Realty. (By: Ryan Munneke)