For sale: Massive space in five buildings
Single buyer for former Gateway complex unlikely
By Dave Dreeszen Journal business editor | Posted: Thursday, July 31, 2008
NORTH SIOUX CITY -- Finding a single buyer for the complex of former Gateway buildings in North Sioux City seems unlikely, local officials said Wednesday.
"In a perfect world, I think (Acer) would like someone to come in and buy the whole thing," said Kory Menken, executive director of the North Sioux City Economic Development Corp. "Personally, I'm not sure how realistic that is.
"That's why I've been encouraging them to plan each building as its own separate lot and market them as individual properties."
In essence, they would be turned into condo spaces. To help market the property, Menken also suggests the familiar black-and-white cow spots be painted over to give the buildings a fresh new look.
Ritch LeGrand, a commercial real estate official who has been involved with leasing some of the vacant Gateway space, said he has offered similar advice in the past.
"One of the things we've told them is the first thing you need to do is rebrand it," said LeGrand, president of NAI LeGrand & Co. "It would show up better."
Their comments came a day after Acer confirmed plans to sell all of the North Sioux City property the Taiwan-based firm inherited when it acquired Gateway last year. The real estate includes five large metal, machine shed-like buildings that Gateway built during the 1990s for its rapidly growing PC business.
Combined, the structures housed about 750,000 square feet of office, manufacturing and warehousing space. To put it in perspective, that's roughly equal to all the useable commercial space currently available in all of metro Sioux City, LeGrand said.
The Gateway complex also dwarfs the roughly 100,000 square feet of new commercial construction typically added in the metro area each year, LeGrand said.
At one time, the Gateway property was valued in excess of $100 million. But with a faltering national economy and a depressed commercial real estate market, Acer knows it likely won't get top dollar for the North Sioux City property, according to local commercial Realtors.
"Right now, it would probably be somewhat of a fire sale," said Dick Salem of United Commercial.
Acer said it has no interest in being a landlord and would prefer, following a sale, to lease back the office space it would need for its dwindling work force in North Sioux City. On Tuesday, the firm announced it had cut an additional 115 jobs in the southeast South Dakota city and at Gateway headquarters in Irvine, Calif. The move, tied to Acer's plans to exit the direct sales business, represented the latest in a series of job cuts in the eight months since Acer closed the Gateway deal.
An Acer spokeswoman would not specify how many employees remain in North Sioux City. Menken estimates the number at around 50. The holdovers are involved in customer service, engineering and administrative duties.
"The soundbite they keep giving us is just because we're selling the building doesn't mean we're leaving," Menken said.
Of the five Gateway buildings, he estimates that about 195,000 square feet is unoccupied or not currently part of Acer's operations. That includes the entire Pacific building, which has about 82,000 square feet.
FIMCO, a manufacturer of agricultural equipment, leases about 255,000 square feet of former Gateway space, including all of the Peru building and the first floor of the Mexico building, Menken said.
Alorica, a Chino, Calif.-based contract call center that has grown into the largest employer in North Sioux City with more than 1,000 jobs, leases about 112,000 square feet in the first floor of the Argentina.
A large portion of the second floor of the Argentina -- a two-story 224,00-square-foot building connected to the rest of the Gateway campus by a skywalk -- is leased by MPC Corp., an Idaho-based firm that purchased the commercial, educational and government portion of Gateway's business last year.
LeGrand, who has marketed the Pacific and Argentina buildings, noted the Alorica deal was one of the two largest deals for commercial office space in metro area history. The other was Stream, another contract call center that moved into the former MCI center in Sergeant Bluff.
An exclusivity clause in Alorica's lease could complicate efforts to find buyers or additional tenants for other Gateway buildings. LeGrand said the contract language prohibits other call centers from locating in the complex while Alorica is there.
"That significantly downsizes the pool of prospects," he said.
Menken said he came away optimistic about filling up the Gateway space, following a recent conversation with a national broker Acer has hired to market the Gateway property.
"From a community standpoint, I see this as an opportunity to move beyond Acer," he said.
There's already been some interest in the property, Menken said. Among the potential uses, he said, are data centers and offices.
A national site selection official who visited the region last week came up with another idea. Will Hern, whom the Siouxland Initiative brought in to help certify several area industrial parks, thought the vast, open spaces at the Gateway complex would be ideal for a solar energy assembly plant, said Initiative president Debi Durham.
With national leaders increasingly focusing on alternative energy, the solar industry is growing and looking for places to expand, Durham said.
Menken noted North Sioux City has diversified its economy in recent years, adding more than 2,800 jobs to help weather Gateway's demise. Many of those new business now operate in buildings that Gateway once leased or owned on the perimeter of the Gateway campus.
Acer Inc. wants to sell all of the former Gateway Inc. property in North Sioux City. The real estate has these five metal, cow-spotted buildings. Approximate square footage for each is listed.
Argentina: 224,000 square feet
Main: 75,500
Mexico: 265,000
Peru: 105,000
Pacific: 83,000
"In a perfect world, I think (Acer) would like someone to come in and buy the whole thing," said Kory Menken, executive director of the North Sioux City Economic Development Corp. "Personally, I'm not sure how realistic that is.
"That's why I've been encouraging them to plan each building as its own separate lot and market them as individual properties."
In essence, they would be turned into condo spaces. To help market the property, Menken also suggests the familiar black-and-white cow spots be painted over to give the buildings a fresh new look.
Ritch LeGrand, a commercial real estate official who has been involved with leasing some of the vacant Gateway space, said he has offered similar advice in the past.
"One of the things we've told them is the first thing you need to do is rebrand it," said LeGrand, president of NAI LeGrand & Co. "It would show up better."
Their comments came a day after Acer confirmed plans to sell all of the North Sioux City property the Taiwan-based firm inherited when it acquired Gateway last year. The real estate includes five large metal, machine shed-like buildings that Gateway built during the 1990s for its rapidly growing PC business.
Combined, the structures housed about 750,000 square feet of office, manufacturing and warehousing space. To put it in perspective, that's roughly equal to all the useable commercial space currently available in all of metro Sioux City, LeGrand said.
The Gateway complex also dwarfs the roughly 100,000 square feet of new commercial construction typically added in the metro area each year, LeGrand said.
At one time, the Gateway property was valued in excess of $100 million. But with a faltering national economy and a depressed commercial real estate market, Acer knows it likely won't get top dollar for the North Sioux City property, according to local commercial Realtors.
"Right now, it would probably be somewhat of a fire sale," said Dick Salem of United Commercial.
Acer said it has no interest in being a landlord and would prefer, following a sale, to lease back the office space it would need for its dwindling work force in North Sioux City. On Tuesday, the firm announced it had cut an additional 115 jobs in the southeast South Dakota city and at Gateway headquarters in Irvine, Calif. The move, tied to Acer's plans to exit the direct sales business, represented the latest in a series of job cuts in the eight months since Acer closed the Gateway deal.
An Acer spokeswoman would not specify how many employees remain in North Sioux City. Menken estimates the number at around 50. The holdovers are involved in customer service, engineering and administrative duties.
"The soundbite they keep giving us is just because we're selling the building doesn't mean we're leaving," Menken said.
Of the five Gateway buildings, he estimates that about 195,000 square feet is unoccupied or not currently part of Acer's operations. That includes the entire Pacific building, which has about 82,000 square feet.
FIMCO, a manufacturer of agricultural equipment, leases about 255,000 square feet of former Gateway space, including all of the Peru building and the first floor of the Mexico building, Menken said.
Alorica, a Chino, Calif.-based contract call center that has grown into the largest employer in North Sioux City with more than 1,000 jobs, leases about 112,000 square feet in the first floor of the Argentina.
A large portion of the second floor of the Argentina -- a two-story 224,00-square-foot building connected to the rest of the Gateway campus by a skywalk -- is leased by MPC Corp., an Idaho-based firm that purchased the commercial, educational and government portion of Gateway's business last year.
LeGrand, who has marketed the Pacific and Argentina buildings, noted the Alorica deal was one of the two largest deals for commercial office space in metro area history. The other was Stream, another contract call center that moved into the former MCI center in Sergeant Bluff.
An exclusivity clause in Alorica's lease could complicate efforts to find buyers or additional tenants for other Gateway buildings. LeGrand said the contract language prohibits other call centers from locating in the complex while Alorica is there.
"That significantly downsizes the pool of prospects," he said.
Menken said he came away optimistic about filling up the Gateway space, following a recent conversation with a national broker Acer has hired to market the Gateway property.
"From a community standpoint, I see this as an opportunity to move beyond Acer," he said.
There's already been some interest in the property, Menken said. Among the potential uses, he said, are data centers and offices.
A national site selection official who visited the region last week came up with another idea. Will Hern, whom the Siouxland Initiative brought in to help certify several area industrial parks, thought the vast, open spaces at the Gateway complex would be ideal for a solar energy assembly plant, said Initiative president Debi Durham.
With national leaders increasingly focusing on alternative energy, the solar industry is growing and looking for places to expand, Durham said.
Menken noted North Sioux City has diversified its economy in recent years, adding more than 2,800 jobs to help weather Gateway's demise. Many of those new business now operate in buildings that Gateway once leased or owned on the perimeter of the Gateway campus.
Acer Inc. wants to sell all of the former Gateway Inc. property in North Sioux City. The real estate has these five metal, cow-spotted buildings. Approximate square footage for each is listed.
Argentina: 224,000 square feet
Main: 75,500
Mexico: 265,000
Peru: 105,000
Pacific: 83,000
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bobf wrote on Jul 31, 2008 9:13 PM:
Acer wrote on Jul 31, 2008 9:08 PM:
DoubleK wrote on Jul 31, 2008 2:34 PM:
pete wrote on Jul 31, 2008 12:34 PM: