With 20 years in regional real estate, Thomas LaPerch, broker-associate with Prudential Serls Prime Properties in East Fishkill, well knew IBM”™s West Campus. “It is unique, a world-class property,” he said.
In October, LaPerch beat out seven contenders nationally to become the principal agent for marketing the 157-acre property with five buildings and 962,000 square feet of interior space ”“ some of which harks to outer space: clean rooms and decontamination chambers.
Asking price for the whole enterprise: $12 million.
The campus was built in 1987 to build 200mm computer chips. Buildings then positioned as offices, dining facilities and even a theater could translate well to 2011. The chip building, however, is extremely specific to its task and features such odd selling points as 6-foot poured concrete walls; conduits that traffic in acid-tainted gases; and the steel-grated feel of a submarine as air is sucked through ceiling and floor on its way to the basement.
All of which balances out on the bullish side as LaPerch sees it. He has been courting prospective buyers and predicted a sale within six months.
The current owner of what is billed as The West Campus at East Fishkill is Wells Fargo Bank, for whom La Perch is marketing it as one unit. “Whatever the buyer is able to do with the parcel ”“ what buildings may come down; there are two prime undeveloped pods that can be developed also ”“ that”™s up to them.”
But, he said, “You”™re going to be bleeding on this until you get the place lit up and you get a tenant.” Yet, as La Perch explained, the tax benefits will come to individual job-making businesses, not to the sort of master redeveloper he needs to get development started. “So it keeps coming back to what can I offer? It”™s all hands on deck. If we have a live body, we don’t want to lose that person because we did not put together a solid package.”
Prospective tenants include colleges and large medical facilities. It is the type of big-ticket sale where one interested party ”“ scheduled in mid-February to visit for the third time, though unnamed ”“ has developed its own business plan just for the purchase. After five years empty and without heat, repairs are sure to factor in.
The campus was previously marketed as Hudson Valley Technical Campus, with the dangled carrot of inclusion in the state”™s Empire Zone program. That program ended last June and has been replaced at about half the funding level with the Excelsior program.
“We”™re trying to put together as big a bag of goodies as we can,” said La Perch, citing incentives such as property tax, sales tax and energy breaks. Toward that end, he has conscripted the Hudson Valley Economic Development Corp., the Dutchess County Economic Development Corp., the town of East Fishkill and U.S. Sen. Kirsten Gillibrand. “And Central Hudson has been great. They”™re all just waiting for me to bring in a live body. This is a front-burner, top-priority project. We”™re all on the same page of wanting to see this redeveloped as a top-tier site.”
Among the amenities is proximity to Interstate 84, a plentitude of modern four-lanes and a neighborhood rich in technology. IBM remains a formidable presence across the street. LaPerch himself has brokered the sale of five former IBM buildings in Dutchess County and cited his sales record as proof there is a market for 200,000-square-foot, former IBM facilities.
IBM sold the West Campus facility to a Philadelphia concern ”“ for $18 million ”“ in 2004. A chip deal soon “fell apart,” LaPerch said.
Efforts by the owners to reposition the property and bring in users during the recession finally stalled for good in October, when LaPerch entered the picture via repossession by Wells Fargo. He said, “My role with the bank is to sell it to one user. It”™s not subdivided. It”™s one transaction. It”™s a helluva parcel ”“ truly unique.”
IBM ran its own sewage treatment facility on site that was highly specialized because of the chip plant. Replacing the sewage plant proved problematic for the previous owners, but La Perch, without offering specifics, said, “We think we have that resolved. We have an A and a B plan with local, county and state government, working closely with them, so that we have the tools to make sure the sewer and water issues are resolved.”
Other challenges: “The buildings are too wide, with a lot of dead space in the middle.” And two buildings have ceilings of 14 feet; 20 feet would be preferable, LaPerch said.
“They need some work,” said Fred Tietjen, site manager for three years with American Building Management (ABM) Industries Inc. “But they”™re strongly built.”
“They have excellent bones,” La Perch agreed. “But to turn on the lights and get them running, we’ve had estimates of $4 (million) to $6 million.”
“I”™m bullish,” said LaPerch, stepping from another unique feature: a 400-seat auditorium/movie theater. “I guarantee this is going to be sold in the next six months.”
Suitors so far have included “universities, medical and technology companies, solar companies ”“ it runs the whole gamut. The problem is nobody wants to take on the whole campus. Individually, I could have had this property sold many times over.
“My profile buyer is a master redeveloper who is going to come in here and get subdivision approval so the five buildings can be sold off. Then, this campus really needs some love: Get the lights on; get the roofs fixed.”
As for the chip building”™s 400,000 square feet of customized infrastructure: “The building was obsolete 10 or 15 years ago ”“ it”™s a tough building to reposition.”
With the power plant shut down, each building needs heating and air conditioning.
“It”™s not your typical office retail complex,” La Perch said. “But I am enjoying the challenge. It”™s been fun.”
