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updated: 8/8/2013 10:10 AM

Suburbs struggle with large campuses like AT&T's in Hoffman Estates

AT&T Hoffman Estates campus might be hard to fill

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  • This interior view of the AT&T building in Hoffman Estates shows the atriums and open floor plan that could make it more difficult to subdivide for smaller tenants.

      This interior view of the AT&T building in Hoffman Estates shows the atriums and open floor plan that could make it more difficult to subdivide for smaller tenants.
    Daily Herald file photo

  • United Airlines has moved its headquarters from this sprawling campus in Elk Grove Township to downtown Chicago.

       United Airlines has moved its headquarters from this sprawling campus in Elk Grove Township to downtown Chicago.
    Daniel White | Staff Photographer

  • The Motorola Mobility campus in Libertyville is on the market after the company's recent move to the Merchandise Mart in Chicago.

       The Motorola Mobility campus in Libertyville is on the market after the company's recent move to the Merchandise Mart in Chicago.
    Gilbert R. Boucher II | Staff Photographer

  • Navistar International Corp. moved its corporate headquarters to Lisle last year, filling this building that had been built by Lucent Technologies.

       Navistar International Corp. moved its corporate headquarters to Lisle last year, filling this building that had been built by Lucent Technologies.
    Bev Horne | Staff Photographer

 
 

By all accounts, finding a new tenant for AT&T's sprawling corporate campus in Hoffman Estates will prove a daunting challenge.

But village officials and the property's landlords believe time -- and the site's attractiveness -- are on their side.

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"It's a beautiful facility on a great site," Hoffman Estates Mayor William McLeod said Wednesday. "We've soldiered through things before. We'll soldier through this."

Such efforts can have a happy ending, as was seen when Navistar International Corp. relocated its headquarters from Warrenville, moving 3,000 people to a 600,000-square-foot showcase building in Lisle formerly occupied by Lucent Technologies.

But the AT&T campus joins other huge properties on a glutted suburban office market, including the 60-acre, 1.7 million-square-foot United Airlines campus in Elk Grove Township and the Motorola Mobility headquarters in Libertyville. Both companies moved to Chicago.

And Allstate Corp. last year bulldozed its 500,000-square-foot office on 64 acres in South Barrington after it couldn't find any buyers. It moved the 800 employees to Northbrook.

Regarding AT&T, Oak Brook-based Inland American Real Estate Trust Inc., which owns the more than 100-acre campus, released a statement Wednesday on its own plans to market the property.

"We have enjoyed a long-standing relationship with AT&T at this location," the statement reads. "This facility, located in a top market in the U.S., should be attractive to other large, corporate users. With over three years left on the lease, we will continue to work with AT&T on all options for the property until the lease expires."

Hoffman Estates Village Manager Jim Norris said the village stands ready to help commercial property owners fill vacancies to the extent those owners allow such involvement.

Given the size of this particular property, Norris said it's highly likely the village will try to put an incentive package together to attract a new tenant or tenants -- possibly from out of state.

While Hoffman Estates was able to elicit help from the state to keep Sears Holdings Corp. from leaving Illinois, such assistance isn't possible to stop AT&T from moving to Chicago and nearby suburbs like Schaumburg, Lisle and Arlington Heights.

But the state could be a potential ally to Hoffman Estates in luring companies from outside Illinois.

However, former South Barrington Village President Frank Munao, whose efforts to prevent Allstate from razing its building failed, sees a negative trend at work among suburban corporate campuses.

While no one needs 100 acres to run a corporation, in the 1980s and '90s such campuses were embraced as a way of projecting an image, Munao said. But now the financial bottom line seems to be the only consideration, he said.

"It was the image they wanted to project, of a successful corporation," Munao said. "I certainly don't see any new ones going up of that size."

But Allstate spokeswoman Laura Strykowski said Allstate hasn't abandoned the concept of the suburban corporate campus. All it did was consolidate its employees from South Barrington to its campus in Northbrook, which it continues to maintain, she said.

Munao said his opinion is very much a personal one, but he believes the efforts local municipal leaders are putting in to make their towns attractive locations for business are unable to overcome the negative effect Springfield is creating for the whole state's business climate.

Geoffrey Kasselman, president and CEO of Des Plaines-based Op2mize -- a real estate services company -- agrees with Munao's assessments of both the business climate in Illinois and the future of the suburban corporate campus.

The three factors that drove the market for suburban campuses 20 years ago -- cheap land, low traffic and the ability to build something new -- are no longer factors in today's economy, Kasselman said.

In its place is the desire to cater to a younger, lower cost and more digitally savvy workforce in a hipper, more convenient urban setting.

While he doesn't foresee the likelihood of large single users for such campuses in the future, Kasselman said necessity can and does provide the incentive to find alternate uses of existing sites.

His own firm was instrumental in the transformation of the single-tenant Roman Inc. facility in Addison into today's multi-tenant Cross Pointe Corporate Center.

Among the things that can be done are adding amenities and services to common areas of buildings, installing video security and adding shuttles running to and from the nearest train station.

"I believe the days of drive and park are dwindling for large corporate campuses," Kasselman said.

Schaumburg Economic Development Manager Matt Frank said he's had his share of struggles with filling commercial vacancies in his village. One of the biggest breakthroughs Schaumburg has had recently was in getting Catamaran to move into the former 300,000-square-foot Ameriquest building after a three-year vacancy.

But marketing an office campus of the size of AT&T's is at least a couple steps above any challenge he's faced, Frank said. The building has 1.5 million square feet of office space and an open floor plan feeding into floor-to-roof atriums that make the space more difficult to subdivide.

While Hoffman Estates has two major corporate campuses whose tenants have threatened abandonment in recent years, Schaumburg has enjoyed a longer and more stable relationship with its only major corporate campus tenant -- Motorola, which moved to its 325-acre campus in 1976.

"We hope Motorola never leaves and we never have to face that situation," Frank said.

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