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HQ News: Spending for New Global Headquarters Better Spent Elsewhere

Also: CNN's Washington HQ Trades for $107 Mil.; Mobile Payment Firm Square Leases 246,078 SF; Splendid, Ella Moss Relocating HQs to Alameda Square; and other headquarters property news of: Alterra, Bloomsbury Publishing, Extreme Networks, Medidata, Valspar and more
October 30, 2012
Diebold Inc. is suspending indefinitely its plans to construct a new global headquarters facility in the Akron/Canton, OH, region. The company is instead focusing its resources and strategic direction on generating long-term, sustainable growth, using its assets to capitalize on acquisitive opportunities and invest in technologies and services that will help grow the business.

The company said it has no plans to pursue new construction options for its global headquarters facility, either in Ohio or elsewhere, and is committed to remaining in its current location in Green, OH. Diebold will decline the various state and local financial incentives it was previously offered, thus allowing those assets to be redirected to other programs that will benefit our state and region.


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"As we've been analyzing our near- and long-term growth priorities, it has become clear that investing more than $100 million in a headquarters facility is not economically feasible given the other priorities for the business at this time," said Thomas W. Swidarski, Diebold president and CEO officer. "We have tremendous opportunities for growth, both through acquisition and organic means. Therefore, we must ensure that we maintain adequate capital flexibility to take advantage of these prospects that will position us for long-term growth."

The recently announced acquisitions of logical security and services businesses in Brazil and Turkey, as well as needed spending on IT and services infrastructure, software and global shared services, represent the kinds of investments Diebold is making to grow the company and build a solid foundation for the future.

Instead Diebold, said that during the next several years, it will make investments to update and enhance the company's existing corporate headquarters in Green and other facilities it occupies in the surrounding area to create a more sustainable, satisfying work environment for its associates.

"We remain firmly committed to our associates, our community and the State of Ohio," Swidarski added. "We will appropriately spend on our current headquarters in the City of Green and our other Northeast Ohio facilities. Our intent is to solidify our presence in this region as we invest in growing our business globally - and continue to make a significant economic contribution to the state."

On April 2011, Diebold announced its plans to construct a new, consolidated corporate campus which would form an expanded global headquarters in the Akron/Canton region. In January 2012, the company announced that it chose a 55-acre site on the Union Square property in Green as its preferred site.

Diebold currently employs approximately 2,000 associates in Northeast Ohio with an annual payroll of about $130 million. The company maintains seven facilities in the Akron/Canton region.


CNN's Washington HQ Trades for $107 Mil.


By: Laurie Forbes
Baltimore-based Greenebaum & Rose Associates sold 820 First St. NE in Washington, DC, to affiliates of Harbor Group International LLC, Capstone Equities and Image Capital for $107 million or $358 per square foot.

The 11-story, 298,533-square-foot, Class A office building serves as the DC headquarters of Cable News Network (CNN). Other tenants of the 99 percent leased property include Accenture, Turner Broadcasting System Inc. and the U.S. Department of Housing and Urban Development.

"The change to institutional ownership should allow for operational efficiencies to be achieved especially in the areas of expense control and staffing," said Jordan E. Slone, Chairman & CEO of Harbor Group, "A capital improvement plan focused on elevator modernization and energy controls should positively affect the Property's performance and aid the leasing and tenant retention efforts."

Cassidy Turley served as the seller's broker.


Mobile Payment Firm Square Leases 246,078 SF


By: Dan Bates
Fast-growing tech firm Square Inc., a 3-year-old company whose service enables shoppers to charge purchases with their mobile devices, agreed to lease four full floors encompassing 246,078 square feet at 1455 Market St. in San Francisco. Square also has an option to take an additional 81,354 square feet, for a combined commitment of 327,432 square feet of space, backfilling a large portion of the space being vacated by Bank of America.

Square's office lease will commence in phases, with the first move into 181,805 square feet scheduled for early 2013, another 15,741 square feet in July 2013, with the remaining 48,532 square feet in early 2014. Square has the option to take an additional 81,354 square feet with a scheduled commencement in early 2014, which would result in a combined 327,432 square foot lease. The exercise of the 81,354-square-foot option would result in the backfill of a total of 288,114 square feet of space currently occupied by Bank of America, the buildings current largest tenant.

"This new lease represents a long term commitment from a leading technology company at starting rents above our underwritten and expiring rents for this same space," said Victor J. Coleman, Chairman and CEO of Hudson Pacific Properties, owner of the 22-story building.

Square had all of 10 employees in December 2009. It has since grown to more than 400 employees, and expects to have nearly 1,000 employees by the end of 2013.

Zach Siegel and J.D. Lumpkin of Cushman & Wakefield represented the landlord Hudson Pacific. Square was represented by Jenny Haeg of Custom Spaces.


Splendid, Ella Moss Relocating HQs to Alameda Square


By: James Young
Contemporary lifestyle fashion labels Splendid and Ella Moss are relocating their corporate headquarters to Alameda Square in Downtown Los Angeles.

Splendid and Ella Moss, brands owned by the global leader in branded lifestyle apparel and footwear VF Corp., signed a 10-year lease with EVOQ Properties Inc. to occupy 82,000 square feet of Building 1 at Alameda Square at 777 Alameda. The two brands are expected to move during the first quarter of 2013.

"We started and grew up in Los Angeles, so it is important that we remain true to our heritage," said Jonathan Saven, president of Splendid and Ella Moss. "The growth of our brands in the last decade has been remarkable, and the larger space will help us expand."

The new Splendid and Ella Moss corporate headquarters, which covers two full floors, will house approximately 200 employees in product development, design, marketing and sales, finance, retail operations, customer service as well as other administrative functions.

Approximately 100 employees will remain in its current space at 3751 South Hill St. in Los Angeles where they will continue to operate their finished goods and fabric warehouse.

Saven added that the company's decision to remain in Downtown Los Angeles was impacted by the ability to stay in an Enterprise Zone area and this designation was important as they evaluated multiple locations.

To meet the specific needs of Splendid and Ella Moss, EVOQ is making multi-million dollar improvements to the building and the overall campus. Renovations have already started, and include conversion of the historic building to a state-of-the-art creative office with large warehouse windows, exposed concrete floors / ceiling and open floor plan; conversion of the ground floor and loading dock into retail, restaurant and outdoor public space; and addition of a 6000-square-foot roof deck and kitchen with dramatic views of the Downtown skyline.


Alterra USA


International insurance provider Alterra USA Holdings Ltd. signed a 27,342-square-foot lease covering the entire 16th floor at SL Green Realty Corp.'s 1185 Avenue of the Americas in New York.

The building offers a recently renovated lobby and elevator cabs, exceptional views, direct access to Rockefeller Center's retail concourse, efficient floor plates and state-of-the-art security.

Scott Cahaly of Jones Lang LaSalle represented Alterra USA; while Howard J. Tenenbaum and Gary M. Rosen of SL Green acted on behalf of the landlord


Anthem Blue Cross


Anthem Blue Cross and Blue Shield held a ribbon cutting ceremony to commemorate its new headquarters at the Campus at Greenhill in Wallingford, CT. The event began with a ceremonial ribbon-cutting and speakers, and continued with campus tours for the media and invited guests and a cake celebration for Anthem employees.

The Campus at Greenhill is a newly constructed, high performance, two-story, 300,000-square-foot Class A office green campus that consists of 104 acres. Owned by Workstage-Connecticut LLC Gale Development, the building is surrounded by protected wetland.

Anthem signed a 10-year lease with the property landlord for 217,764 square feet of the campus, located at 108 Leigus Road.

Developed using the latest in sustainable technologies, the Campus at Greenhill is registered under the US Green Building Council LEED program (Leadership in Energy and Environmental Design.)


Bloomsbury Publishing


Bloomsbury Publishing Inc. signed a long-term lease at 1385 Broadway, a midtown Manhattan office building that recently completed a $55 million major capital improvement and renovation program.

Bloomsbury, British publisher of J.K. Rowling's Harry Potter series, is moving from The Flatiron Building at 175 Fifth Ave. to occupy the entire 5th floor for a total of 23,500 square feet at 1385 Broadway.

Cushman & Wakefield's Jonathan R. Serko, vice chairman, Gary Greenspan, vice chairman, Diana Gaines, senior director, and David Malawer, senior director serve as the exclusive leasing agents for the building, which is owned by B. Bros. Broadway Realty LLC, an affiliate of Bloomingdale Properties Inc.


Cardenas Markets


Cardenas Markets, a family-owned supermarket business, is expanding its headquarters and distribution operations moving from a 126,000-square-foot property in Ontario, CA, to a 263,000 square-foot industrial at 2501 East Guasti Road also in Ontario.

The new facility owned by MK Associates serves multiple uses, comprising executive office space and parking for corporate use, distribution facilities, room for the installation of refrigerated warehouse storage, and plenty of truck and trailer parking.

Joe Miller of Voit Real Estate Services represented MK Associates and worked with Mike Leifer of Palmieri, Tyler, Wiener, Wilhelm & Waldron on land use issues, as well as with Ruben Goodsell, Peter McWilliams and Michael McCrary of Jones Lang LaSalle on the marketing assignment.


Extreme Networks


Extreme Networks Inc. entered into a lease with RDU Center LLC for 56,218 square feet of space at 2121 RDU Center Drive, Suite 100 and Suite 400, Morrisville, NC.

The lease commences Jan. 1, 2013, expiring on Oct. 30, 2020. The company has two options to renew for additional terms of five years each.

Monthly base rent commences May 1, 2013, at $1.175million per annum, increasing annually at a fixed rate per square foot to $1.363 million per annum in the final year.

Under the leas, the landlord is obligated to pay up to $958,000 toward the company's existing lease obligations on its current lease in Durham, NC, which expires on July 31, 2014. In addition, the landlord is responsible for an initial tenant improvement allowance of $2.035 million and, if requested by the company by April 20, 2013, an optional allowance of $562,000 to cover certain improvements the company desires to undertake on the premises.


Hammer Packaging


Hammer Packaging broke ground on a 13,000-square-foot expansion at its corporate headquarters in West Henrietta, NY.

The addition is being constructed on the south side of the existing building. Once completed, the new structure will house Hammer's third variable sleeve offset printing (VSOP) press, as well as make room for a fourth press. The addition of this press makes Hammer the single largest user of VSOP Sleeve Technology in the world.

"This is a significant investment for our company," said James E. Hammer, president and CEO. "The decision for the building addition is to better maintain our present workflow and maintain as much cost effective manufacturing square footage as possible to support our aggressive strategic sales growth."

Hammer Packaging hopes to have the addition completed in November in time for the arrival time of the new equipment.

Earlier this year, Hammer moved and expanded its Flexo operations to its Rochester Tech Park location and an additional 60,000 square feet of space.

In 1999, Hammer moved into its then new 90,000-square-foot, state-of-the-art corporate headquarters adjacent to the Rochester Institute of Technology. This facility also houses an array of large-format printing presses for producing cut and stack, roll-fed, in-mold, foam and shrink sleeve labels.


Intrexon


Intrexon signed a 55,000-square-foot lease of laboratory and office space at 20358 Seneca Meadows Parkway in Germantown, MD.

In September of 2009, Intrexon had purchased substantially all of the equipment and assumed the lease of Avalon Pharmaceuticals' industry-leading bioassay facility at 20358 Seneca Meadows Parkway, which Intrexon then named as the home of its Human Therapeutics Division. That site has also since become the location of Intrexon's Animal Science Division.

Germantown-based Minkoff Development owns 20358 Seneca Meadows Parkway, which is part of the Seneca Meadows Corporate Center.


Medidata Solutions


Medidata Solutions Inc. entered into a lease with The Rector, Church-Wardens and Vestrymen of Trinity Church in the City of New York for new headquarters at 350 Hudson St. in New York City.

The lease provides for the company to rent three floors consisting of a total of 98,585 square feet of rentable space. The lease has an expiration date of 10 years and nine months starting Jan. 1, 2013, and has a 5-year renewal option.

In addition, the lease provides for the landlord to offer the company an option to rent an additional three floors in the building if it becomes available.

Annual rent under the lease is $4.93 million for the first five years and $5.32 million for the next five years.


Montefiore Medical Center


Montefiore Medical Center preleased an 11-story, 280,000-square-foot building at Hutchinson Metro Center with Simone Development. The new construction project, scheduled for completion in the third quarter of 2014.

The state-of-the-art building will include an ambulatory surgery center, featuring 12 operating rooms and four procedure rooms; an advanced imaging center; onsite laboratory services and pharmacy; as well as new primary and specialty care practices. The initial lease agreement is for 16 years with the option to extend the lease or purchase the tower.

The new tower will be adjacent to another building on the Simone Development site that is home to Montefiore's Center for Orthopaedic Specialties. Together, this will create Montefiore's fourth campus, to be called Hutchinson Campus, extending Montefiore's care delivery network to a new area of the Bronx. This integrated network encompasses more than 130 locations, 50 advanced primary and specialty care centers, 19 school health clinics, a home health agency and four traditional hospitals, including the Children's Hospital at Montefiore.


National Penn Bancshares


National Penn Bancshares Inc. is planning to move its headquarters from Boyertown, PA, to Allentown, PA, and open a new Reading, PA, area business center.

"We have developed a forward-thinking relocation plan that will improve employee collaboration, enhance customer service and maintain our strong focus on growing the National Penn franchise. said National Penn president and CEO Scott V. Fainor. "This strategy will increase efficiencies and allow us to continue our focus on enhancing shareholder value as we solidify our National Penn brand."

According to the corporate relocation plan, which calls for no reduction in jobs, the following moves will be completed by fall 2014:

National Penn corporate headquarters will relocate to Seventh and Hamilton streets in downtown Allentown and 275 employees will relocate to the new Two City Center building, which is scheduled to be completed in the spring of 2014.

National Penn will continue to maintain 150 employees in the company's current buildings in Boyertown.

National Penn will relocate approximately 125 employees to a new building on Broadcasting Road in Spring Township, Berks County, which will be completed in the fall of 2013, known as the Reading Area Business Center.


Network Allies


Network Allies LLC moved its office and production space to Osgood Landing at 1630 Osgood Ave. in North Andover, MA.

Network Allies is leasing 20,000 square feet for a 90-month term with an option to lease an additional 40,000 square feet of adjacent space. The space consists of 5,000 square feet for offices and 15,000 square feet for production.

The new offices will include a state-of-the art Digital Signage Showroom to demonstrate digital signage technologies to prospective customers. Digital signage solutions are increasingly being deployed in locations such as automobile dealerships, retail outlets, health care facilities, and corporate headquarters.


NextLife Asset Recovery


NextLife Asset Recovery Services will open a new headquarters and processing facility in Rogers, AR. The company plans to invest more than $10 million and hire 350 at the processing facility in Rogers.

"We are thrilled to be opening our third location and our second processing facility," said Ron Whaley, President and CEO of NextLife. "We are excited to bring green jobs to Arkansas. I want to thank both the State and Local officials who have made this day a reality."


NxStage Medical


NxStage Medical Inc., a manufacturer of dialysis products, opened its new headquarters in Lawrence, MA.

NxStage's new 137,000-square-foot facility replaces its prior 58,000-square-foot headquarters and houses the company's 300 employees within research and development, sales and marketing, customer and technical support and other functions.


Pacific Trust Bank


Pacific Trust Bank renewed its corporate headquarters lease and expanded by 50% in the Irvine Towers at 18500 Von Karman Avenue in Irvine, CA.

Pacific Trust Bank leased an additional 21,000 square feet, bringing its total occupancy to nearly 63,000 square feet. Total consideration for the long-term lease was $3.3 million.

David Giglio, vice president, and Lori Smith, associate vice president, both of Transwestern represented Pacific Trust Bank. The building owner, The Irvine Co., was represented in-house by Mike Hodges.


Physicians Choice Laboratory Services


Physicians Choice Laboratory Services plans to establish its new facility in York County, SC. The $24.1 million investment is expected to generate 364 new jobs.

Physicians Choice will consolidate and expand its current operations in a new facility at Riverwalk Business Park, near U.S. Hwy 21 and I-77 in Rock Hill. The new facility is expected to be in operation by July 2013.


SolarMax Technology


SolarMax Technology Inc. will break ground next week on a new Riverside, CA, facility at 3080 12th St. It expects to begin occupying the 165,000-square-foot office and warehouse by the end of the year. The company's move is set to create directly and indirectly 1,600 jobs.

SolarMax Technology is renovating the historic building and adding a solar rooftop. The building is set to also house other green businesses and services.

"This is a major milestone for us," said David Hsu, SolarMax Technology CEO. "As SolarMax Tech. continues to grow, we plan to keep giving back to our community through donations and job creation."

SolarMax Tech. expects to continue its hiring spree and expanding its footprint in the U.S. The company plans to hire marketing, sales, office, and warehouse workers.


Valspar


The Valspar Corp. plans to expand its research and development campus and renovate its former headquarters building in downtown Minneapolis.

Valspar is investing $30 million in the project, which will add 87,000 square feet of laboratory, meeting and office space. The project is expected to be completed in early 2014. The project will create up to 135 full-time jobs over the next two years.

The Minneapolis campus will enable Valspar to expand its partnerships with research institutions and universities, providing co-operative internships and equipment sharing, including the University of Minnesota.

"Expansion of the VAST center affirms Valspar's commitment to advance the scientific foundation in the coatings industry and apply technical principles to deliver innovation and value," said Dr. Cynthia Arnold, senior vice president and chief technology officer for Valspar. "The expanded campus will enable research and development at the highest level as well as create the right environment for customer and supplier collaboration for new coatings technologies."


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