Computer Task Group is considering selling its Buffalo headquarters for a profit after receiving several unsolicited offers to purchase the Knox Mansion on Delaware Avenue, the company said Tuesday, as it also announced lower revenues amid the Covid-19 pandemic.
The technology and staffing firm said it had been approached more than once during the first quarter, and "is currently exploring the offers and the potential to sell its owned real estate."
The company, which tried unsuccessfully to sell the headquarters mansion as recently as 2017, did not say if it would move or lease back the property. But if it ultimately accepts one of the proposals, the company said, it expects to record a gain on the transaction.
The 48,000-square-foot Knox Mansion is considered one of the city's most prominent and best-known buildings, and part of the Mansion Row section of Delaware Avenue.
Originally completed in 1918 as a single-family home, the French Renaissance-style limestone building includes a main foyer with a curved marble staircase and bronze handrail, Vermont rose gray marble floors and pilasters and 12 original fireplaces. Athletic facilities were added in the rear in the 1970s, including an exercise room, squash and basketball courts and locker and shower rooms.
This is at least the third time in recent years that the company has considered selling its headquarters. The company put the mansion up for sale through Cushman & Wakefield affiliate Pyramid Brokerage Co. in 2015, but got no takers. It then decided in 2016 to list both the mansion and another building at 700 Delaware, seeking a total of $6.5 million, with a plan to bring its operations under one roof.
That effort proved partially successful, as Ellicott Development Co. bought the secondary administrative office building at 685 and 700 Delaware in early 2018 for $1.8 million. It was originally listed at $3.2 million, and then reduced to $2.6 million.
CTG also said it had drawn down $12 million on its credit line and sped up collection of payments from IBM, its largest technology staffing client. CTG also implemented furloughs and salary cuts in early April for all non-billable employees –
including senior management.
“As a result of the COVID-19 pandemic and significant disruption in the global economy, companies are facing unprecedented challenges," said CTG President and CEO Filip Gydé.
The furloughs did not affect its business development and solutions divisions. "We continue to pursue high-growth opportunities across the organization," Gydé added.
"CTG remains well capitalized with a strong balance sheet and sufficient working capital to support our business operations and clients," he said.
CTG reported first-quarter profits of $1.1 million, or 8 cents per share, up from $600,000, or 5 cents per share, in the same quarter a year ago. Revenues totaled $86.9 million, down 11% as the firm transitioned away from its large but less profitable technology staffing business, and its clients suffered the first negative impacts of the pandemic on their own businesses.
During the first quarter, CTG completed its acquisition of StarDust, a provider of testing and quality-assurance solutions that is based in France and Canada, and also launched its new Testing Solutions division in North America, with an initial focus on health care. It also obtained a multiyear contract for more than $5 million with a new health solutions client.
However, the company suspended its financial guidance for the rest of the year, citing the uncertainty surrounding Covid-19.
“While the Covid-19 pandemic had relatively limited impact on our business in the first quarter, the Company expects a more pronounced effect on both our clients’ operations and CTG’s business beginning in the second quarter," said Executive Vice President and Chief Financial Officer John M. Laubacker.