A speculative real estate bubble is fun until it pops, just as it did nearly 20 years ago along the Telecom Corridor in Richardson.
Motorists in the early 2000s got a first-hand glimpse of the impact of telecom’s implosion in Richardson by traveling the 5.5-mile stretch of U.S. Highway 75 that runs through the city.
Traveling that stretch now is like watching a comeback by the home team, a rousing revival built on redevelopment, marketing, perseverance, and a revised real estate tool box.
Around the turn of the century, US 75/North Central Expressway through Richardson reflected a city coping with the realities of a technology industry in contraction.
To the east of Central, just north of Campbell Road, was the 800,000-square-foot, mostly-empty headquarters campus for Nortel Networks’ U.S. unit. The Canadian business was among the biggest casualties of the telecommunications mania of the late ’90s, with Wall Street having reportedly valued the equipment maker at $283 billion in July 2000.
Heading south on Central, drivers saw empty storefronts at Richardson Heights Shopping Center, a 200,000-plus square foot property at Belt Line Road that dates to the 1950s.
Richardson’s office vacancy rate, which was 9.5 percent in the first quarter of 2001, climbed to 25.9 percent by the fourth quarter of 2003. Telecom Corridor, the T-shaped business area in Richardson that U.S. 75 roughly bisects, lost as many as 30,000 jobs tied to the industry.
“The tech and telecom bust hit Richardson around 2000 to 2001 and continued to have a dramatic effect on the Telecom Corridor area through the end of 2004,” said John Jacobs, executive vice president at the Richardson Economic Development Partnership, or REDC.
Although the dot-com crash may be better known, the telecommunications implosion that largely took down Richardson real estate was 10 times larger, according to The Economist.
The bubble’s severity may have stemmed from what the magazine in July 2002 calculated was the telecom industry’s nearly $1 trillion debt load.
By: Jeff Bounds
SOURCE: Dallas Innovates