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McClatchy-Tribune  06/25/2014 5:50 PM ET
Avago puts LSI building on rental market [The Morning Call (Allentown, Pa.) :: ]

June 25--When Avago Technologies acquired LSI Corp. in May, it became owner of one of the most distinctive commercial properties in the Lehigh Valley.

Nicknamed the Emerald Palace, the huge angular structure with a distinctive green glass exterior is the former headquarters of Agere Systems, just off Route 22 in Hanover Township, Lehigh County.

It was designed to anchor the major international technology company that Agere briefly was. That was before Agere's precipitous decline and sale to San Jose-based LSI in 2006.

Today, the building is nearly half empty, and Avago is hoping to fill it up with renters.

Avago, which has dual headquarters in Singapore and San Jose, Calif., has tapped commercial real estate firm Colliers International to market the property.

According to an ad on real estate website LoopNet, 250,000 square feet of 600,000 total square feet is available.

At one time, the Emerald Palace housed thousands of workers, many of them highly paid, white-collar professionals. But the number declined steadily over the years under cost-cutting measures by Agere and LSI.

By December, when Avago announced its planned acquisition of LSI, there were just over 700 workers left there. Additional job cuts have followed since then, though it's unclear how many.

Avago has not responded to repeated inquiries about its real estate and job cuts.

Built at a cost of $165 million, the Emerald Palace opened in early 2002, the year after Agere was spun of by Lucent Technologies. (Lucent itself was a spinoff of AT&T's Bell Laboratories' Western Electric division.)

The building, situated atop a sprawling campus including two 1,000-car parking decks, consists of east and west wings joined on the ground floor by the lobby in front and a glass-enclosed walkway to the rear. Ten elevators and glass-enclosed stairwells provide access between floors.

The first floor of the east wing features a cafeteria with seating for 500 people and a conference center with numerous meeting rooms. Some rooms offer panoramic views of Martin Tower in Bethlehem and the PPL tower in Allentown.

According to real estate experts, the building's value today would depend on how easily interior partitions could be reconfigured to accommodate new uses.

The large amount of space available could make the property attractive to a wide variety of tenants, such as technology companies, health care companies and call centers, said Amy Hawley, president of Hawley Realty in Allentown.

It could be especially appealing to New York and New Jersey businesses looking for lower taxes and utility costs and plentiful parking, she said. "It has some strategic advantages."

Space at the Emerald Palace has hit the market amid a building boom in downtown Allentown.

However, according to both Hawley and Lisa Pektor, president of PennCAP Properties in Bethlehem, a glut is unlikely.

Pektor, whose PennCAP controls 1.4 million square feet of mostly suburban office space, said the Emerald Palace is likely to appeal to tenants in the market for large spaces of 25,000 square feet or more. And spaces that big, she said, are in short supply in the Lehigh Valley.

Another possibility is that Avago sells the building and rents back only the space it needs.

"Anything in the real estate business is for sale -- for the right price," Hawley said.

skennedy@mcall.com

610-820-6130

 

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