Terremark, T-Rex divorce, split assets by Darcie Lunsford
March 7th 2001
The marriage that briefly gave Coconut Grove’s Terremark Worldwide control of the former IBM campus in Boca Raton has officially ended with Terremark paying $900,000 to sell the high-profile facility and two others back to senior managers of T-Rex Developers.
The divorce of Terremark and T-Rex Developers, first announced in January, became final February 23rd, according to Securities and Exchange Commission documents filed late last month.
Shedding its label as a real estate company, one of Wall Street’s least sexy investments, could help Terremark’s sagging stock. Shedding its identity as a telecom real estate company will allow T-Rex to react to changing market conditions, officials of both companies have said.
Both sides have termed the breakup as amicable.
As part of the split, T-Rex, operator of the 1.8 million-square-foot Yamato Road hub, has returned 1.4 million shares of Terremark stock. Last March, T-Rex partners Clifford Preminger and Tom Mulroy sold their telecom hotels to Terremark at an undisclosed price.
T-Rex partners are retaining 6.6 million shares of Terremark stock.
“They are stockholders, but hey are not insiders anymore,” said Terremark spokeswoman Sandy Gonzalez-Levy. Preminger has resigned from Terremark’s board of directors, according to the SEC filing.
Terremark chairman Manuel D. Medina built the company as a real estate developer but changed strategy after going public in April 2000. The company’s stock performance, however, has been lackluster. On Monday, it closed at $1.50 a share, down from its April 3, 2000, open of $3.75 a share on the American Stock Exchange.
T-Rex also relinquished its stake in Terremark’s Technology Center of the Americas, where Miami’s much-ballyhobed network access point will be located. T-Rex, however will continue to be the building�s exclusive leasing agent.
“From our standpoint of the NAP of the Americas, we didn’t want to do anything to jeopardize the NAP,” Gonzalez-Levy said. T-Rex expertise in operating and leasing real estate facilities to telecom carriers helped Terremark land financial backing and tenants for its all-computer building, she said.
T-Rex fashions itself as a real estate firm that targets tele-communications carriers, said Tom Mulroy, chief executive officer of T-Rex, which also operates telecom centers in Cleveland and in Hartford, Conn.
Terremark, on the other hand, wants to position itself as a high-tech infrastructure provider and manager. It offers the computer networks and the expertise and real estate to house them.
Mulroy said T-Rex now has more flexibility to move with the changing real estate markets. Just days after the break became final. Mulroy announced that remaining 500,00 square feet of vacant space at the Boca Raton T-Rex center would be marketed to office users as as telecoms. Conventional office tenants are shunned under the Terremark moniker.
“We have marketed it as a pure telecom for eight months, ” Mulroy said. But the market has turned soft so T-Rex is casting a wider net in hopes of filling some vacant buildings.
The group also intends to sell off acres, with a market value of about million, along Yarnato Road. ” I want to do so in a bulk transaction,” Mulroy says.