Verizon Ready to Buy Former AT&T Campus

BASKING RIDGE, NJ-Ever since Verizon announced last summer that it was planning to consolidate much of its Manhattan headquarters staff with Verizon Wireless’ headquarters operations, New Jersey and Virginia have been locked in a battle to grab the brass ring. Now, New Jersey has apparently won that battle.

As reported by GlobeSt.com, the vacant former AT&T campus here was in play as a possible site, and that’s apparently where the consolidation will happen. According to a published report, Verizon has agreed to buy the sprawling property from Pfizer Inc., its current owner, for $125 million.

A spokesman for Verizon declined to comment. A Pfizer spokesman would only say, “we’re still on the market.” However, according to a source with knowledge of the negotiations, a sale contract could be signed as early as today.

The campus, which encompasses nearly 2.6 million sf in 10 interconnected buildings on 140 acres, was built in the mid-’70s. Forced by market conditions to drastically downsize, AT&T sold it to Pharmacia three years ago and consolidated its headquarters at its smaller, nearby Bedminster, NJ location. AT&T itself, of course, is in the process of being acquired by SBC Communications, which is expected to keep the AT&T operations in Bedminster.

Pharmacia, which paid $210 million for the property with the intention of relocating its own headquarters there, never used it. Within months after the campus was acquired, Pharmacia itself was bought by Pfizer, which quickly announced that it would sell the property. Cushman & Wakefield, which has been marketing the site for Pfizer, declined to comment. CB Richard Ellis, which has been working on Verizon’s behalf, similarly declined comment.

When Pharmacia bought the property from AT&T, the sale price of $210 million translated to about $81 per sf. Verizon’s bid of $125 million amounts to less than $50 per foot, but both numbers are misleading. Only about half of the complex’s 2.6 million sf is usable office space–the rest is a combination of underground parking, oversized lobbies, more than 30 miles of hallways and related common area space. The complex is also said to need an overhaul of its building systems.

The number of jobs involved is in the 4,000 range, and state grants related to new and retained jobs are part of Verizon’s decision, according to sources. An official with the New Jersey Economic Development Authority, which administers the programs, declined to comment.

While Verizon has said it will keep its executive staff, legal and financial departments at its New York headquarters at 1059 Sixth Ave. under a sale-leaseback agreement with the new owner of that building, Equity Office Properties, about half of its 2,800-person Manhattan workforce is expected to move to the former AT&T campus. There, they would be consolidated with Verizon Wireless’ 2,600 headquarters staffers, currently located at nearby Bedminster, NJ.