"We are currently exploring our headquarters facilities options," Kelly McAndrew, a spokesperson for Pepsi says. "Our lease will be up at the end of 2002." She notes that the company is considering signing a new lease at its current headquarters at One Pepsi Way. The company leases the entire 527,800-sf building, although company officials say the building is currently "under-utilized."

Its other options include: leasing space or acquiring an existing property in Westchester County or in the western section of Connecticut, which would include markets such as the Danbury/Newtown area; or engage in a build-to-suit deal in either Westchester or Connecticut. Pepsi is the largest manufacturer, seller and distributor of Pepsi-Cola beverages with operations in the US, Canada, Greece, Russia and Spain and employs 38,000 workers worldwide.

The company broke away from former parent company PepsiCo of Purchase in March 1999 when it issued an initial public offering. PepsiCo owns approximately 40% of the shares of the Pepsi Bottling Group and is the largest shareholder in the company. PepsiCo built the One Pepsi Way property 14 years ago. The company executed a sale/leaseback agreement on the property with the Witkoff Group of New York City several years ago, company officials say.

Bob Bundy, a principal of Staubach, notes that the brokerage firm is still attempting to identify properties in Westchester and Connecticut that would be considered alternatives to its existing location. He also notes that the firm has engaged in "preliminary" discussions with Connecticut and Westchester County officials on possible incentives the company might receive.

Bundy says that Staubach, which has been working on this project since last summer, did explore other markets outside of New York and Connecticut. While relocating away from this area has not been ruled out entirely, efforts are focused on assessing alternatives in the Westchester-Connecticut marketplace, he notes.

He adds that those talks have not produced any concrete offers since Pepsi has not decided as yet where it will move, if at all. They also said there is no specific timetable for a decision on is corporate headquarters operations, although McAndrew says that it plans to study the recommendations made by the Staubach "as expeditiously as possible."

Instant Insights /

Pepsi Bottling Group Exploring Space Options in Westchester and Connecticut

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