Alpha last week closed on its $8.75-million purchase of 25 Computer Dr., complete with 41 acres of developable land. Wang Labs developed the old-tech manufacturing facility in 1985. In an exclusive interview with GlobeSt.com, Alpha president and CEO David Aldrich explains that the buy was a major departure for Alpha, which produces semiconductors for wireless and broadband applications.
"Our strategy is not to own a lot of real estate," he says. "We can use that money to grow our business and provide far greater returns than owning a lot of land. We chose to buy here because it allowed us to do what we wanted without paying the cost of capital in a sale/leaseback." For the record, Alpha owns or leases more than 400,000 sf in California, Maryland and Massachusetts.
He estimates that other lease-based arrangements could have doubled the price tag of the facility, to which Alpha plans to make $3 million in capital improvements. Included in the improvements are a complete gutting of the office space, which represents roughly half of the total, and an upgrade of services and some manufacturing space.
"Our plan is that this facility will be adequate for three to five years, at which time we'll probably double the space," he explains. "Because we've been growing the size of this company every six quarters, we need an aggressive expansion plan. Since the market is so hot, we need long lead times in an industry that typically breaks ground for new space. This market is too volatile for that."
He expects a late January move-in and predicts that that the headcount at the new facility will hit 400 by the end of 2001. CB Richard Ellis Whittier Partners represented Alpha in the deal; Trammell Crow spoke for the seller.
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John Salustri
John Salustri has covered the commercial real estate industry for nearly 25 years. He was the founding editor of GlobeSt.com, and is a four-time recipient of the Excellence in Journalism award from the National Association of Real Estate Editors.
