Archon Investing More Than $300 Mil in Nationwide Bricks for Clicks Strategy

IRVING, TX-The locally based Archon Group has launched a cyberspace program, investing upward of $300 million nationwide, for telecom hotels with a built-in integrator so companies can set up offices in any of the developer’s facilities.

It’s a one-lease, one-team marketing concept, Rusty Perry, Archon’s vice president and acquisitions director, told GlobeSt.com. Negotiations are under way with prospective tenants for the 860,000-sf Genisus Loudoun Exchange in a Washington, D.C., suburb and the 404,000-sf Genisus Stevenson Point in Newark, CA, both “from the ground up” developments. Archon also is discussing lease arrangements with several prospects for the Chicago Genisus project at 1 N. State St., a 600,000-sf high-rise redevelopment, where 125,000 sf is available. Nationwide, more than three million sf is being developed. Other locations are the 800,000-sf former Philadelphia Inquirer printing facility at 440 N. Broad St. and Las Vegas’ Genisus East Sahara, a 70,000-sf industrial building at 4425 E. Sahara Blvd. The latest property to come into Archon’s high-tech pipeline is the 1.3-million sf Prestonwood Town Center, which has been closed for nearly two years save for Neiman Marcus and Lord & Taylor – plus there are four more cities in the telecom and data center pipeline. Those locations presently are being kept under wraps.

Several developers have initiated similar high-tech projects but few, if any, are undertaking a program of this magnitude, says Perry. “We think the proliferation of differentiating and expanding uses of the Internet is going to be driving the real estate demand for companies,” he says. “We feel the nationwide approach is the way to tackle it.” And, he says, Archon is more than willing to tailor the portfolio to clients’ needs, developing properties in cities that may not be in the existing inventory. “There is no set allocation,” Perry says. “But, we do have well over $300 million invested right now.”

Genisus Dallas North, which will start delivering high-tech space in the 2001 first quarter, represents the largest redevelopment of any Texas mall to date. And that’s just the beginning. Archon and Dallas architect Corgan Associates are forging plans for the additional development of office, restaurant, multifamily and retail on the recently bought 90-acre site that includes 40 acres encircling the once lucrative retail center. The 21-year-old mall, bought from Dallas investor Sam Ware, is situated near the intersection of the Dallas North Tollway and Belt Line Road. Archon’s construction has started on the two-story mall’s northern end and will include exterior and interior upgrades. Come August 2001, tenants Neiman Marcus and Lord & Taylor will vacate their spaces so mall work can be completed.

The Genisus Dallas North property is a rare find in that it’s bordered on all sides by an existing multiple fiber network and dual-feed power lines. Nonetheless, Archon is planning to construct an on-site power substation to support demands for future telecom and data center tenants. Archon as an affiliate of Goldman, Sachs & Co. has the critical financial strength – as well as technical resources – to support such a large-scale undertaking, emphasizes Perry. “Our focus is to address the stability and reliability needs of companies whose capital-intensive buildouts are justified by long-term leases,” he says.