SHANGHAI-UTStarcom Inc. has completed the sale of the company’sapproximately 2.58-million-square-foot manufacturing plant, R&Dcenters, and administrative offices as well as other assets relatedto the property located in Hangzhou to the Hangzhou-based ZhongnanGroup of Cos. The total value of the transaction reachedapproximately $140 million.

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“We are very pleased to deliver on our commitment to monetizeour underutilized facility in Hangzhou, China,” says PeterBlackmore, chief executive officer and president of UTStarcom, in aprepared statement. “With this significant infusion of cash,UTStarcom has strengthened its debt free balance sheet and is in astronger competitive position.”

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Jones Lang LaSalle assisted the seller, and points out that thisdeal is the largest-ever business park investment transaction inChina to date not only size wise, but in the total transactionamount as well. The sale also marks the first predominantindustrial sector investment transaction in the Hangzhou propertymarket, according to a prepared statement.

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UTStarcom has leased back a portion of the disposed building tomaintain its current operations and presence in Hangzhou. And thecommencement date of the leaseback was on June 1, 2010.

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Tammy Tang, head of business parks in China for JLL, tellsGlobeSt.com that Zhongnan is a China domestic company involved inconstruction, construction material and computer animation.According to Tang, the buildings did go through a normal marketingprogram, however she points out that “it was very low profile,”adding that they were on the market for six months.

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“The global financial crisis has prompted many companies to bemore cost-conscious. Cost saving has been a clear objective, andfocus has shifted from short-tem ‘survival’ to building resiliencefor medium-term to long-term growth,” says Stuart Ross, head ofindustrial with JLL in China. “The UTStarcom’s case is a primeexample that companies are re-assessing their real estatestrategies in order to make better use of their capital and focusmore on their core businesses.”

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Tang tells GlobeSt.com that the offer from Zhongnan was thefirst offer that UTStarcom received and “they took it.” As to whyan investor might be interested, Tang says that “the appearance isvery unique, they can use some space immediately and they would beinterested for investment.”

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For the Hangzhou city itself, Tang explains that the residentialsector is the most dominated sector. For commercial properties,office development is “dominated by local developers and mostlystrata titled sales.” She adds that industrial is a main componentin the suburb area.

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Natalie Dolce

Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.