AT&T To Sell or Lease Its N.J. Headquarters
In cost-cutting move, communications giant looks for a buyer or tenant to take its Basking Ridge corporate campus valued at $260 million.
October 26, 2001
AT&T Corp. (NYSE:T) plans to sell or lease its 2.65 million-square-foot staff headquarters complex in Basking Ridge, N.J., and relocate approximately 3,000 workers to nearby facilities as it continues to wring cost reductions while implementing a major restructuring.
A company spokesperson said the decision to give-up its long-time corporate headquarters and occupy less-expensive space was driven both by the financial need to lower costs and the desire to separate the operational units being spun-off in the restructuring into their own facilities.
Over the next two years, the company expects to base its business services division in two buildings in Bridgewater, NJ. Its consumer business will move to a building in Morristown, NJ while its senior managers move to another building in Bedminster, NJ.
Although the communications firm is officially headquartered in Manhattan, the New Jersey complex has served as the company's de facto headquarters since its construction in the mid-1970s and contains the offices of the company's senior management, including Chairman Michael Armstrong.
Located on 140 acres, the corporate complex consists of seven inter-connected buildings comprising 1.3 million square feet of office space and another 1.35 million square feet of garage and mechanical space. The company spokesperson said it would announce a listing agent for the property "in short order."
The AT&T Learning Center, a 171-bed corporate conference center facility, is located on an adjoining 35-acre site. A spokesperson said the company would entertain offers for the learning center as well.
AT&T has pared its real estate portfolio over the past several years, selling off buildings and consolidating offices as its work force dropped after spinning off the likes of NCR Corp., Lucent Technologies, Paradyne Corp., and The CIT Group. Three years ago the company occupied 76 office buildings in new Jersey. By year-end, the number will be down to 20.
More changes are planned. By next year, AT&T will spin off or sell its cable broadband business and create a separate tracking stock for its consumer long-distance segment.
The move to shed expensive and/or underutilized space is part of a larger effort to trim costs in the face of declining revenue and debt service. In releasing its quarterly financial performance earlier this week, AT&T said "it expects to take a fourth quarter restructuring charge principally associated with a series of cost-control initiatives," including the reduction of an undisclosed number of employees.
AT&T is not abandoning New Jersey, however. About 17,000 of the company's 124,000 employees will still be based in the Garden State.