Pillar Buys Former Nortel HQ
The $43.1 million transaction represents Pillar's crack at capitalizing on the rebirth of the Dallas-area tech market.
May 25, 2011
By Barbra Murray, Contributing Editor
Pillar Commercial is the new owner of the former Nortel Networks Inc. U.S. headquarters in Richardson, Tex., courtesy of a $43.1 million transaction. Pillar, which took the two-building, 807,40-square-foot complex off the hands of creditors as part of Nortel’s bankruptcy proceedings, calculates that the property’s high-tech infrastructure plus its location in the city’s reviving Telecom Corridor will equal success. “Demand for office space is increasing dramatically,” Manny Ybarra, Pillar founder and principal, told CPE.
Nortel’s one-time home-base, built specifically for the telecommunications company 20 years ago, occupies approximately 18 acres just 15 miles north of Dallas and within close proximity of a light rail station and the mixed-use Galatyn Park Urban Center district. The campus includes the 16-story tower encompassing 413,300 square feet at 2201 Lakeside Blvd. and a 394,100 square-foot research and laboratory building at 2221 Lakeside. Perhaps the property’s most distinguishing feature is its modern technological and mechanical infrastructure with data center, telecommunications and power generating capabilities.
Commercial real estate services firm CB Richard Ellis came aboard in January of this year to commence an aggressive marketing campaign that ultimately resulted in nine firm bids before the bankruptcy court signed off on the purchase and sale agreement between Pillar and Nortel in May. Pillar turned to Holliday Fenoglio Fowler L.P. to orchestrate financing, which was provided by Viewpoint Bank.
Pillar has preliminary plans to spend several hundred-thousand dollars to update the property’s lobby and make a few cosmetic upgrades to complete the company’s scope of improvements for both buildings, thereby enhancing the complex’s ability to attract top tenants. “Over the last six to eight months we’ve seen a resurgence of the telecom industry,” Ybarra said. “We’re seeing a lot of interest from large corporate users in both the telecom and tech industries, looking to add a substantial number of jobs and make a significant investment in new facilities.”
Pillar’s purchase of the former Nortel campus marks the seven-year-old company’s largest acquisition in its history.
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