Sunday, June 21, 2009

Xerox Seeking Sale Leaseback of US Properties

Democrat and Chronicle - June 19, 2009

Xerox Corp. is looking to sell the 29-story, 850,000-square-foot Xerox Square building on South Clinton Avenue as well as the adjacent auditorium, its Jefferson Road facility in Henrietta and a building at its manufacturing and research campus in Webster.

Xerox hasn't set an asking price for the tower.

The sales represent the latest step in a strategy the company has pursued for two years of shedding excess space and moving into leased facilities.

About 1,500 people work at Xerox Square, a significant part of the company's 7,000-member local work force. Xerox doesn't plan to move the employees from the building but instead is pursuing a lease-back arrangement in which it would rent the building from a new owner, said spokesman Bill McKee.

"There's no intention to leave the Square," McKee said. "Xerox is committed to downtown Rochester."

The auditorium, which is serving as a venue for the Rochester International Jazz Festival, might be sold as part of Xerox Square or separately, McKee said. Along with the purchase of Xerox Square comes its underground parking garage.

Lease-back arrangements are common in corporate real estate. Companies typically decide that the money they get from the sale can provide a higher return than the added cost of having a landlord, said Larry Glazer, CEO of Rochester-based real estate development company Buckingham Properties.

"It gives them working capital to pay off debt or invest in and grow the company," said Glazer, who isn't involved in the current sales.

Xerox in 2007 sold its headquarters building in Stamford, Conn., and moved to leased space in nearby Norwalk. And in the past year it moved operations in Paris and Mexico City to leased facilities and relocated about 200 workers from leased space at Linden Oaks Office Park to Xerox Square.

Brokering the downtown sale is real estate giant Cushman & Wakefield, based in New York City. Xerox is handling the sale of the 440,000-square-foot Henrietta facility and Building 205 at the Webster campus.

The Jefferson Road site houses 1,250 workers and is used primarily for engineering work. Those workers likely would be moved to the Webster campus, McKee said.

Building 205 in Webster contains office space. Work done there would be moved to other Xerox properties. Sphere: Related Content

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