BlackBerry’s recent announcement that it will cut some 4,500 additional jobs (along with a loss of nearly US$1 billion in its latest quarter) in the coming weeks and months will affect not only those being let go but also the Kitchener-Waterloo real estate market. BlackBerry owns more than 20 buildings in the area and leases another 6. The job cuts mean that it will not need as much office space going forward. As a result, it is now looking at ways to turn this space into cash.
BlackBerry is now working with a number of real estate firms to come up with options to “generate the largest possible return in as little time as possible,” according to sources. While it wants to hold on to some key buildings, it is willing to entertain a variety of options for the others. Options include outright sales as well as selling some and leasing back the space it still needs.
According to real estate firm Colliers, BlackBerry owns about 1.6 million square feet of office space in the area. This amounts to some 15 percent of the office space in the region. In its latest regulatory filing, BlackBerry estimates its real estate assets (across the world) to be worth about US$1.28 billion.
Whether BlackBerry is able to find buyers for all this office space remains to be seen. Perhaps Motorola which recently set up shop in the area can pick up some of this space.
BlackBerry is hoping to sell itself in the coming weeks. It recently signed a letter of intent agreement with Fairfax Financial for a deal worth US$4.7 billion. Fairfax is now conducting its due diligence to decide whether to move forward with a formal offer by November 4. BlackBerry is also continuing to shop itself around in the hopes of landing a better deal.
Source : The Globe and Mail