The for sale sign has finally gone up on the huge Nortel campus in Ottawa. The asking price is expected to top $200 million. However, with pressure on Nortel to sell, there could be yet another bargain to be had.
Just this week, a real estate firm began advertising the 400-acre site with more than two-million square feet of space.
Currently, there are three major tenants: Ericsson, Ciena and Avaya. A fourth tenant, Genband, should sign a deal shortly. All of them bought up Nortel operations.
A Ciena spokesperson told CTV Ottawa the company is paying $7.2 million annually for a 10-year lease.
The deal states the lease cannot be terminated for at least 30 months. If someone buys the property, Ciena must be given 30 months notice and if the company is forced out earlier, there could be a penalty payment of more than $33 million.
It is likely the other deals are similar. The other tenants have all told CTV Ottawa that they have signed long-term leases. That could mean a revenue stream from leases of around $30 million. Nortel won't confirm any details.
What about the feds?
Nortel was talking to the federal government a year ago when the government was looking for two million square feet of space.
"No decisions have been made – on Nortel's part or the government's. We do know … the federal government intends to begin initial occupancy of the office space in 2011. There is no current agreement between Nortel and the government related to space in Ottawa," Nortel spokesperson Jamie Moody told CTV Ottawa.
"We have been in discussions with a number of parties interested in the facility, but they are discussions only. I can't provide any additional details," she added.
It is possible investors will buy the property, take over the four current leases, and then see who else wants to come in. The current tenants would take up less than half the space to accommodate just over 3,000 workers.
