GRID: June 2001: Checkout Time -
[Cached Version]
Published on: 2/6/2001
Last Visited: 7/30/2002
"We're going to be in a vulture-fund type of mentality," says Tom Mulroy, chief executive officer of T-Rex Capital in New York, which owns some 6 million square feet of telco hotel space nationwide."When their lifelines run out, that's the time to swoop in."
Many industry observers believe that day is imminent, but the scene was set during the dot.com craze.High-tech start-ups fueled by highly flammable venture capital set off an explosion of equipment buying and infrastructure build-out among telecom companies of all sizes – after all, somebody had to support the dizzying array of services and content provided by a gazillion consumer-driven Web sites.
Telecom firms uploaded $655 million in debt to pay for that growth, according to telecom equipment supplier Nortel Networks of Brampton, Ontario.
...
"If they do go out, I end up with their [improved] space," Mulroy says, "and I can rent it out for whatever I want."While T-Rex has idled most of its telco hotel pursuits over the past year, the firm is still developing the Technology Center of the Americas in south Florida in partnership with Terremark Worldwide of Miami ("NAP Tango," GRID, September + October 2000).Terremark owned half of T-Rex from March 2000 until last February, when T-Rex bought out of the relationship.If T-Rex can land a tenant, it also may develop a telco hotel of between 250,000 and 750,000 square feet in downtown Chicago from the ground up.
The doom and gloom hasn't completely shut down leasing, either.MetroNexus of New York, an affiliate of Morgan Stanley Real Estate Funds, and Core Location announced in April that Sprint Corp. was leasing 100,000 square feet in their 940,000-square-foot Metro Technology Center Atlanta.