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A Canadian flag flies at BlackBerry's headquarters in Waterloo, Ont., Tuesday, July 9, 2013.

Geoff Robins/THE CANADIAN PRESS

BlackBerry Ltd. confirmed Tuesday it plans to sell most of its Canadian real estate, but new chief executive John Chen pledged to keep its headquarters in Waterloo, Ont.

"BlackBerry remains committed to being headquartered in Waterloo and having a strong presence in Canada along with other global hubs," Mr. Chen said in a release in which the company announced it will sell more than three million square feet worth of space. "This initiative will further enhance BlackBerry's financial flexibility, and will provide additional resources to support our operations as our business continues to evolve." Real estate firm CBRE Ltd. will handle the sale, which will see BlackBerry lease back properties it still needs.

The Globe and Mail first reported last fall that BlackBerry was considering a sell off of its real estate, after it approached commercial real estate firms in late September. The move came shortly after the company announced plans to cut 4,500 jobs, or more than 40 per cent of its work force, and to slash its costs in half amid sharply declining revenues in the midst of an attempted sale of the company. That process ended with investor Fairfax Financial Holdings pulling a $9-per-share bid in early November and instead leading a $1.25-billion refinancing of the smartphone company.

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BlackBerry had 27 buildings, including six leased properties, in the Waterloo area, as of the end of its last fiscal year in early March. It valued its land, based on cost, at $68-million (U.S.) as of Nov. 30, and its related buildings, leasehold improvements and other real estate assets at $941-million. Since then, it has announced plans to sell five buildings and land to the University of Waterloo for $41-million. The deal is slated to close Feb. 14.

The company said in the release it wouldn't comment on the potential value of a sale and would only "disclose further information as required." In a recent regulatory filing BlackBerry said it was holding $192-million worth of "certain property plant and equipment assets" for sale and expected to dipose of them "within the next 12 months." A company spokesman said there is "some overlap" between the properties put up for sale Tuesday and those included in the earlier set of assets earmarked for sale two months ago, but there are "additional properties" now for sale.

BlackBerry's real estate sale is part of an effort to fill up the company's coffers as its revenues and cash flows continue deteriorating over the next few quarters. In addition to the refinancing, BlackBerry applied for and received an early $700-million tax refund in November and expects an additional $323-million refund this year. It has a largely untapped $500-million credit facility. BlackBerry's improved liquidity situation – helped by a deal to offload much of the financial risk of making smartphones to Taiwan-based Foxconn Technology Group – has sparked a rebound in BlackBerry stock in recent weeks.

News of the planned divestiture, released after the market close, extended a rally in BlackBerry stock in after-hours trading. BlackBerry stock was up by 3.5 per cent as of 5:45 pm on Nasdaq after closing up 9.4 per cent on the day, following news that the U.S. Department of Defense will continue to deploy BlackBerry smartphones as the main hand-held device on its network. The stock closed Tuesday in the U.S. at $9.93, its highest close in four months.

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