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BlackBerry strikes deal to sell most of its Canadian real estate

BlackBerry strikes deal to sell most of its Canadian real estate

Posted by Juan Gavasa on March 22, 2014

BlackBerry Ltd. has reached a deal to sell most of its Canadian real estate, more than 3 million square feet of space and vacant lands, to raise cash. The money-losing smart phone maker with world headquarters in Waterloo, will lease back some of the space, the company announced Friday.

The value of the deal and the name of the buyer or buyers were not disclosed. BlackBerry said it expects to close the deal, first announced in January, before the end of May. Most of the real estate — nearly 80 per cent — is in Waterloo. The rest is in Cambridge, Mississauga and Ottawa.

The company, in the midst of a major turnaround effort, said in January it remains committed to maintaining its head office in Waterloo. It repeated those assurances Friday. “The successful sale of property in Canada will help us move toward our goal of continued operational efficiency,” John Chen, who took the helm in November, 2013, said in a statement.

“BlackBerry remains committed to having a strong presence in Canada, and we continue to consider Waterloo home to our global headquarters,” Chen added. The properties include its Northfield and University campus-style office clusters in Waterloo, plus Cambridge campus in Cambridge, Mississauga Airport Corporate Centre and Ottawa Campus.

The real estate includes 2 million square feet of office space and nearly 1 million square feet of warehouse space, most of it built after 2000, according to a marketing brochure prepared by commercial real estate brokerage firm CBRE. The total portfolio includes 19 buildings, some of them vacant or leased to third parties.

The deal “is part of BlackBerry’s ongoing program to improve operational efficiencies, optimize resource usage and shift resources,” the company said in a release. BlackBerry has said it intends to monetize property assets as it looks to cut operating costs by half over the next few quarters. The company has also announced plans to eliminate more than 4,600 jobs and says the downsizing has reduced its need for space.

In a regulatory filing in January, the company said its real estate holdings were valued at more than $1.3 billion, including $119 million for the land and $1.28 billion for buildings and leasehold improvements before amortization. That included properties outside Ontario.

The University of Waterloo in December said it had purchased five buildings and land from BlackBerry for $41 million. Blackberry shares, up 34 per cent since the start of the year, were trading at $10.60, up 0.2 cents, at 11.30 a.m., on the Toronto Stock Exchange.

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