October 28, 2016 Comments Off on ULI: Second Chances for Obsolete Corporate Campuses Views: 436 National News, Southwest, Texas

ULI: Second Chances for Obsolete Corporate Campuses

When Ross Perot acquired 2,700 acres in Plano, TX along the Dallas North Tollway, he envisioned a corporate campus. Legacy Park, as it was called, attracted companies such as EDS, JCPenney and Frito Lay, which built huge headquarters on massive swaths of land.

“We made a good living for years negotiating build-to-suits,” said CBRE’s Jeff Ellerman during the Urban Land Institute’s “Energizing Outdated Corporate Campuses” panel. “We’d move tenants from multitenant buildings to single-tenant corporate campuses. They could build a fortress and keep everyone inside.”

Over time, Legacy Park became outdated. KDC acquired the 1.1-million-square-foot EDS campus in 2005, and partnered with Spear Street Capital to reposition the asset as Campus at Legacy. The campus was redeveloped it as a multitenant office park, with design input from Gensler. CBRE handled leasing.

The first step to repurposing the three-building white elephant was to invite people in, rather than locking them out, according to Adam Ballew with Spear Street Capital. “The gates at Campus at Legacy came out in 2007,” he said. At one point, a discussion ensued about placing retail in the campus’ center circle, but it didn’t happen. “It doesn’t make a lot of sense now,” Ballew said. “But if we were developing the campus today, we’d put retail amenities in, to give it a sense of place.”

The former EDS campus morphed from a fortress-like cube farm to an activity-based workplace. The campus is fully leased. The interiors are geared toward creating, and sustaining, happy and productive employees, mainly because of fluid workspaces.

Furthermore, additions such as Legacy Town Center offer amenities within walking distance. “What designers and HR have realized is that it’s about choice,” said Gensler’s Barry Hand. “I can’t stick every person in a cube, and expect them to perform. We work hard to stitch in choice.”

The redo of EDS into Campus at Legacy could be considered a successful repurpose of an outdated corporate campus. And, in theory, choice of workspace can lead to happy and more productive employees. However, senior leaders are cautious about sinking money into a fad; Ellerman said the C-Suite wants empirical data before spending money on a lifestyle-corporate mixed-use center. At this point, there isn’t much data tying flexible workspaces to a huge bottom-line increase.

But Hand noted that even a small increase in productivity, over a large workforce, can show results. “I don’t think the C-Suite is passionate about employee happiness,” he said. “But if you can show them a 3%-5% increase in productivity, a good number.”

Corporate campus conversion isn’t going to work in all cases. In suburban Chicago, the landscape is dotted with many empty corporate campuses in which tenants have little interest, as they want to be downtown. Those will likely be torn down, said the panelists.

But the story can be different for those campuses in the path of growth. If that’s the case, Ballew’s suggestion is for landlords and owners to make it easier on the tenant.

“If you’re a landlord going in and buying a campus, and are wondering whether to have private offices, or to knock them out, knock them out and show the space,” he said. “If you’re wondering whether you should maximize with office space or lounges, do the lounges. You want to amenitize.”

Connect with Spear Street’s Ballew

Connect with CBRE’s Ellerman

Connect with Gensler’s Hand

For comments, questions or concerns, please contact Amy Sorter

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