Motorola Inc. said Wednesday it plans to put its once-bustling Arlington Heights campus on the block and lease back some buildings.
The Schaumburg-based communications company hired Jones Lang LaSalle in Chicago to help market the buildings. The firm released a brochure more than a week ago to other commercial real estate professionals to start gauging the marketplace.
The preliminary information in the brochure is being used to solicit possible suitors to buy the buildings and then lease back some of the space to Motorola. The building leases would range from three years to 10 or 12 years, said Charles Wiercinski, associate with Park Ridge-based McLennan Commercial Properties Inc., one of the firms that reviewed the information.
"Motorola probably wants to own less real estate and use that capital to invest in its core business," Wiercinski.
Industry experts speculate that such a deal could be valued at roughly $65 million, depending on economic conditions and whether the rent portion is under or at market value. The rent portion then would influence the value of the property sale and what the new owner believes it could ultimately make during the life of the leases.
Motorola's Arlington Heights campus, near Route 53 and Dundee Road, has about a half-dozen buildings that house Motorola's networks business. The company likely will lease back three or four of those buildings.
In February, Motorola posted a fourth-quarter net loss of $3.6 billion and co-CEO Greg Brown said the company would be consolidating space at each of its suburban campuses, including Arlington Heights, Schaumburg and Libertyville.
"Motorola is continually exploring opportunities to optimize Motorola's real estate properties," said Motorola spokeswoman Kristine Mulford. "After a thorough analysis of the Arlington Heights facility, Motorola is evaluating ways to maximize our use of space and strengthen our balance sheet. Arlington Heights continues to be an integral part of Motorola's global location strategy. As we grow in the area, we will manage space requirements at the site and explore options to accommodate our employees."
Mulford declined to provide any further details. A Jones Lang spokeswoman was not immediately available for comment.
Motorola acquired its first building in Arlington Heights in 1984. Additional buildings were then built and acquired over the years to make up the current Arlington Heights Motorola campus.
During its heyday in the 1990s, the campus was its own bustling city with about 7,000 employees on-site for various shifts 24 hours a day. It also included a cafeteria and a day-care center, said Arlington Heights Village President Arlene Mulder.
"Look at the parking lot. Back then all the spaces were full," Mulder said.
However the company has been downsizing in recent years, leaving more of those parking spots vacant, Mulder said.
"I'm holding out a lot of hope for Motorola," she said. "I hope things get better. I hope they can rent out space and maintain that campus. Motorola has always been a top-notch business. Their employees have always been engaged in our community."
Should Motorola close up for good in Arlington Heights, restaurants and stores on the village's north side would suffer, Mulder added.
"Jameson's (Char House) is one I can think of that I would be sorry to see them go," she said.
The sale-lease deal shows that Motorola is doing everything it can to raise cash, said Alex Dannin, telecom analyst with Chicago-based Morningstar Inc.
"With Motorola, we're seeing massive shrinking and plummeting sales, and it's losing tons of money," said Dannin. "They're taking this line by line now, and it makes total sense to sell this campus. It also shows just how serious of a situation they're in."
In 2008, Motorola marked its 80th anniversary as it continued to restructure to survive in an economic downturn and battle stiffer global competition. It follows other companies, including Alcatel-Lucent SA, which put its building in Lisle up for sale last year.
Motorola is one of the top five employers in Arlington Heights.
The condensing of the campus isn't all bad, said Jon Ridler, executive director of the Arlington Heights Chamber of Commerce.
"It's a great opportunity to attract more businesses to the area," Ridler said. "It's a state-of-the art facility that's all ready to go. That would be perfect for a business looking to relocate."
Motorola likely will stay put, in some capacity, at least until the leases run out, said Wiercinski.
"Large corporations do this all the time," Wiercinski said. "It's an exit strategy for the future. When a lease comes up, they can make a strategic decision at that time."
• Daily Herald staff writer Sheila Ahern contributed to this report.