Now that we have officially closed on the former Nortel campus, I wanted to share a little insight on why we elected to make such a big bet in this particular office sector. Richardson, with its heavy concentration of high-tech companies, is an office submarket that has experienced both ends of the real estate spectrum, depending on the stage of economic cycles from the past 20 years.
In the early 1990s, Richardson’s business base fully emerged into branding the “Telecom Corridor.” The late ’90s proved to be one of the most ambitious economic expansions for the Dallas region, and the Telecom Corridor gained more than its fair share in business investment, with high-profile relocations and expansions. This unparalleled growth was fueled, in large part, by the telecom and technology industry.
The former Nortel campus in Richardson includes a 16-story office tower and a three-story R&D facility.
As we turned the century, the technology bust of 2000 had a particular devastating effect on the Telecom Corridor, due to the high concentration of like companies. As these businesses aggressively cut costs by reducing their workforces and shedding space, a glut of office inventory hit the market. Other companies evaporated all together, adding to the abundance of available space and creating downward pressure on rental rates and values.
Richardson city leaders and real estate owners responded by re-evaluating the diversity of its business base. Their challenge was to diversify corporate users that would allow the city and region to weather another tech downturn, without diminishing the Telecom Corridor brand. There is value in the brand and in the infrastructure the city and major companies have made for tech companies. However, other major businesses value much of the same. A well-developed transportation network system, access to a highly-skilled workforce, exceptionally strong telecommunication and power infrastructure are also important to businesses who use technology, but are not identified as tech companies.
Choosing the former Nortel campus as our most recent acquisition was partly based on the real estate. But much of our interest in staking a claim in this city has to do with the pro-business philosophy of the city of Richardson. The Mayor, city council, city staff, and Richardson Chamber are led by some of the most dynamic, proactive, and business-oriented minds in the region. A public/private partnership can take many forms. The one we have established with the Richardson team is one based on trust, responsiveness, and confidence. People like city manager Bill Keffler, deputy city manager Dan Johnson, chamber president Bill Sproull, and chamber executive vice president John Jacobs made the decision to invest in their city easier, because we knew we had partners we could lean on and work with in making Richardson the most dynamic and progressive suburban community possible.
Like every other city in the region, Richardson has had its challenges during the most recent economic downturn. Yet I believe we will see brighter days ahead. It won’t happen by accident, nor will it happen on its own. It will be due to the efforts of everyone who has a vested interest in seeing the city prosper. I am proud to count myself and our team among them.
Now, does anyone have an 800,000-square-foot user? We are open for business.
Manuel M. “Manny” Ybarra is president of Pillar Commercial. Contact him at email@example.com.