BlackBerry to sell its Canadian real estate for $278 million
Smartphone maker BlackBerry will sell a majority of its real estate holdings in Canada to real estate investment firm Spear Street for about $278 million.
The move is being seen as a part of the Canadian handset maker’s broader efforts to conserve cash and fund turnaround efforts amid intense competition from Apple’s iOS and Google’s Android operating system-based smartphones.
As part of the deal — expected to conclude this month — with Spear Street, BlackBerry will sell over 3 million square feet of space and vacant lands. It will lease back a portion of the space and Waterloo (Ontario) will continue to serve as the company’s global headquarters.
In a statement last night, BlackBerry said: “Spear Street Capital, LLC has waived its due diligence condition pursuant to BlackBerry’s previously-announced agreement to sell the majority of BlackBerry’s real estate holdings in Canada.”
“Spear Street has agreed to purchase the properties for Canadian dollars 305 million or approximately $278 million,” he said.
The parties expect to complete sale of properties valued at around 80 per cent of this total later this month, with the sale of the remaining properties to be completed during the third calendar quarter of 2014, subject to customary closing conditions in each case, it added.
“Under the terms of the transaction, BlackBerry will sell more than 3 million square feet of space as well as vacant lands,” the smartphone maker said.
BlackBerry will lease back a portion of the space as the company continues to have a strong presence in Canada with Waterloo continuing as the home of its global headquarters, it added.
In March this year, the Canadian handset giant had said it will sell most of its real estate holding in Canada. The move forms part of the firm’s efforts to improve operational efficiencies as it faces mounting losses and unsold handset inventory.
In the same month, BlackBerry sold its US office in Texas to Brookfield Property Group in a bid to rationalise costs.
BlackBerry reported a net loss of $423 million in the fiscal fourth quarter against a net loss of a whopping $4.4 billion in the third quarter ended November 30.
Revenue fell 64 per cent to $976 million in December-February from $2.7 billion in the same quarter a year ago. It fell 18 per cent from $1.2 billion in the third quarter.