Nortel Networks bailing out of an East Bay land deal.
BY PETER DELEVETT
Mercury News siliconvalley.com
FIRE SALE: Just when you think Silicon Valley's commercial real estate market couldn't get worse, here comes word Nortel Networks is about to lose its shirt bailing out of an East Bay land deal.
The Canadian networking giant, struggling along with all its peers, is trying to dump a new office and R&D facility in Newark that it acquired last year along with the now-defunct Promatory Communications.
According to the broker marketing the building for sublease, Promatory and the building's owners together spent roughly $90 a square foot to outfit the place last fall. Now, Nortel is letting it go for just $1.50 a square foot.
At that rate, a local broker clucks, Nortel will probably eat well over $100,000 a month, since it must still pay the full rent to the building's owner.
And that doesn't even include what Nortel paid to furnish the building, which is being marketed as ``plug-and-play, with new Herman Miller furniture.'' Nortel spokesman David Chamberlin says the company, which lost $19 billion last quarter, doesn't ``discuss financial details of our leases.'' |
