Genband has signed a lease for research and development space at 500 Palladium Dr., sealing its presence in Ottawa after it leaves the former Nortel campus in 2014.
The IP infrastructure and application developer is naming the new, 70,000-foot location as its Canadian research and development centre of excellence.
Genband will take over half of the building’s space under a sublease from local manufacturer Sanmina SCI.
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“It is absorbing a good chunk of vacancy … but it won’t have a great deal of impact,” said Darren Fleming, a managing principal at local brokerage firm Cresa Partners, which was involved in the deal.
He said Genband, as one of the last Nortel tenants seeking space, represents the end of a bumper opportunity for property owners in Kanata seeking to lease large tracts of real estate.
“I’ve often characterized the impact of the Nortel units moving out as a school of salmon swimming down river, and there were a lot of nets out there to catch them. But if you didn’t catch a fish in that school, it’s not like there are more fish coming there. The river is running dry.”
He warned the Kanata real estate market, which only features about 5.5 million to 5.7 million square feet of real estate, is stabilizing into less of a tenant’s market, but could quickly teeter again. Uncertainty at RIM could mean the tech giant would need less real estate than originally expected, he said as an example.
According to Mr. Fleming, 500 Palladium Dr. was originally a Nortel building, which Breconridge subsequently took over through a space-swap deal. Sanmina SCI, which bought Breconridge, currently leases the entire building.
The centre for Genband will include lab, office, customer support and briefing areas as well as space for sales, marketing and corporate functions. Genband will focus on core IP switching and multimedia development in the facility.
Genband bought Nortel Networks Corp.’s carrier voice-over-Internet protocol and application solutions business in 2010 for US$182 million, a deal that included 400 former Nortel employees.
The Dallas-based company, along with Avaya, Ciena and Ericsson, each bought bits of Nortel’s business after the demise of the company in 2009, and took over the former tech giant’s space in Kanata.
Those companies will need to vacate that space by the end of 2014 as the federal government, which bought the building, prepares to move the Department of Defence into it. Together, they occupy around 865,000 square feet in the campus.
While Ciena has not announced its plans after leaving the Nortel campus, Ericsson and Avaya committed to new spaces in Kanata:
– Ericsson Canada is leasing about 200,000 square feet of office and manufacturing space inside 349 Terry Fox Dr., a building that previously sat empty for years. The company bought several Nortel units.
– Avaya Corp., which bought Nortel’s enterprise solutions business for US$915 million in 2009, signed a 10-year lease at 425 Legget Dr. with Canderel, a property management and development firm.
