The site also includes 33 acres of land, where Merrill Lynch once anticipated enlarging its campus to 1.2 million sf and employing 5,000 people. Instead, more than 1,000 people will lose their jobs in the office campus. Merrill Lynch says it has ''significant over-capacity'' at its three operating centers, so its back office functions at Meridian will be transferred to existing facilities in Hopewell, NJ and Jacksonville, FL. Employees caneither relocate or can accept a severance package.
''The building is being offered for sale or for lease,'' Noon says. ''We would look at a quality tenant on a long-term lease. Or we would sell it. We would love to be able to bring a high quality user into Meridian.''
Noon declines to discuss the possible sales price.
But Brad Neiman, an investment specialist with Mile High Properties, says a likely strategy would be to sell it to a user, with a target price of about $125 per sf. An investor likely would be willing to pay $80 or $90 per sf.
While not getting into specifics, Noon says that Merrill Lynch doesn't plan a fire sale and has patience.
''It certainly will be a challenge,'' Noon tells GlobeSt.com. ''But it is doable."
Neiman estimates Merrill Lynch pumped about $200 per sf into the campus. A less lavish office campus would cost at least $150 per sf, he says, so Merrill Lynch would likely have to discount that.
Neiman says the campus is the largest class-A office project available in the metro area.
The addition of the buildings on the market is expected to drive up the southeast suburban office vacancy rate to about 17% from 15%.
Neiman says the building could easily take three years to sell.
''It's highly unlikely to find a company today that is in the growth mode that wants this kind of product,'' Neiman tells GlobeSt.com. ''Over the next three years or so, the price of it will fluctuate with the market. It's really hard to say what it might sell for.''
Still, Neiman says the impact on the real estate market is not as great as Merrill Lynch's plans to close its operation and either transfer or lay off most of its local workforce.
''I wasn't prepared for that,'' Neiman tells GlobeSt.com. ''It's not good news by any measure. The snowball impact of losing 1,000 jobs on the residential market, consumer sales and other things is just huge. At one time they were planning to grow to 5,000 people. To go from 5,000 to minus 1,000 is huge. There's no way to dance around this and say it's somehow good news.''
Tim Richey, a top broker at Cushman & Wakefield, agrees.
''I think it is very disappointing,'' Richey tells GlobeSt.com. ''I don't know what it will sell for because there's such a broad range or pricing. What a developer or an investor would pay is far different than what it would be worth to a user. But I do know it has some of the nicest architecture of any buildings in the metro area.''
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