Olivetti building up for sale

Journal of Business, Jul 02, 1998

Wang Laboratories Inc., of Billerica, Mass., has decided to lease out and ultimately to sell its big 46-acre Olivetti North America campus at Liberty Lake because it doesn't need all of the space at the property says a Spokane real estate agent.

That agent, Rocky Rothrock, says he has been retained by Wang to seek high-tech companies that might be interested in leasing all or part of the campus's two-story, 305,000-square-foot building, at 22425 E. Appleway. After all the space there has been leased, he says he believes Wang could sell the property for between $20 million and $23 million.

Rothrock, an agent for Spokane's Crowley Commercial Real Estate, says Yang would consider selling the property to a single use but such a prospect isn't very likely. Instead, he expects the company to sell the property to another company or organization that would acquire it as an investment. He estimates the property would bring an investor an 8.5 percent to 10 percent annual net return.

Rothrock says he has been talking with several potential tenants, but declines to disclose who those companies are. He says the building could accommodate as many as five companies.

Rothrock has mailed a 14-page brochure about the campus to 150--mostly national or international--high-tech companies with installations in the Northwest.

"I've contacted everyone from Microsoft on down," he says.

He adds that he plans within the next week to mail the brochure to another about 100 companies in California's Silicon Valley and a pared-down two-page brochure to about 150 real estate brokers in Seattle, Portland, and other West Coast cities.

"The building is devoted to high-tech," Rothrock says, adding that there is extra space between the building's two floors so that tenants have room to run extensive data and telecommunications wiring throughout the building.

Leonard Selvaggio, Wang's spokesman here, declines to comment about the sale of the Olivetti building.

Rothrock says Wang Laboratories, which earlier this year bought Ivrae, Italy-based Olivetti S.p.A.'s Olsy Group, including Liberty Lake-based Olsy North America Inc., has decided to unload the Olivetti campus because its Liberty Lake operation can't use all of the space there.

"They see it as an underutilized asset," he says.

Wang's Liberty Lake operation now is part of Wang Global, a Wang Laboratories' subsidiary. Wang Global plans to maintain a presence in the Spokane area, but might not remain at the Liberty Lake campus, Rothrock says. He says that once Wang Global decides how much space it will need here, it plans either to be a minor tenant at its Liberty Lake campus or to lease space in another building in the Spokane area for its operations here.

Wang Global, which designs, installs, operates, and maintains global computing and telecommunications networks for multinational companies as well as defense and civilian government agencies, employs about 450 people here and more than 21,000 people companywide.

In March, when Wang Laboratories bought Olivetti's Olsy Group, the company said it was unclear how the transaction would affect the employees at the Liberty Lake facility. Company spokesman Selvaggio still declines to discuss whether any employees will be laid off here.

The Liberty Lake campus, which was developed in 1984, first housed ISC Systems Corp., a Spokane-based maker of computer hardware and software for the banking industry that later merged with Bunker Ramo, a U.S. subsidiary of Olivetti. The Spokane facility became part of ISC/Bunker Ramo, then became Olivetti North America, and then Olsy North America Inc., before being acquired by Wang Global earlier this year. In the late 1980s, ISC had employed more than 700 people at the Liberty Lake campus.

The property includes about 180,000 square feet of office and manufacturing space and another 125,000 square feet of warehouse space. The building, which is located on more than acres of land, also houses a kitchen and cafeteria area that has indoor and outdoor seating for a total of about 500 people. Rothrock says he envisions a restaurateur leasing the about 13,000-square-foot cafeteria and opening an eatery there.

The campus also includes a baseball diamond, basketball courts, and parking for nearly 600 vehicles. In addition, more than 12 acres of vacant land lies east of the developed part of the campus, which Rothrock believes will be a major draw for high-tech companies looking for space here.

"If you don't provide for expansion in the high-tech industry, you don't have a deal. For high-tech companies there's nothing more expensive than relocating," Rothrock contends.

Rothrock says the office and manufacturing space likely will rent annually for about $7.80 per square foot, plus taxes, utilities, and other costs that on an annual gross lease would add about $5.45 a square foot. The base lease rate or the warehouse space is expected to cost about 35 cents a square foot a month, he says.

"If you compare you'll see that's a pretty good price for this quality of space. Most places downtown rent for about $15 to $20 and most of those don't even have parking," Rothrock says.