Posted by: BayAreaComRE | June 16, 2010

Who’s Actually Growing? Case Study: VMWare

VM Ware (NYSE: VMW and blue line to the right vs S&P 500) over the last year has been a true sweetheart story of Silicon Valley. Based in the heart of  the Palo Alto / Stanford Research Park, the company is at the forefront of data virtualization also known as “cloud computing”.  With little to no infrastructure, Company X can plug into VMWare’s products and scale infinitely, while focusing more on building its specific product as opposed to wasting resources on routine maintenance and upkeep of data, storage, hardware, etc. A subsidiary of EMC Corp (NYSE: EMC), the $29 Billion market cap, $2 Million annual revenue enterprise is a bright spot in the tech landscape and has won numerous awards including the venerable Wall Street Journal Technology Innovation Award in the Software category.

All of this is great news for the Bay Area real estate market. VM Ware has offices sprinkled all over including a major lease expansion that was just inked last month in the Stanford Research park into an additional 150,000 square feet. The first part of that expansion was a 65,000 square foot deal into a former Roche warehouse and the second was a 85,000 square foot research and development building formerly occupied by SAP AG and located at 3421 Hillview. Their headquarters is an expansive 462,000 square foot project it bought from EMC in 2007 for roughly $130 Million near the height of the market. The company also started its San Francisco footprint on the full 11th floor at 71 Stevenson Street in 2006, and recently expanded onto the 13th floor and extended their lease through 2015.

As a case study, VM Ware is a perfect example of the type of company that will take the US economy into the next era of growth. The company is constantly innovating, adapting, expanding and the Bay Area reaps major benefits from this in the form of added jobs, lease expansions, B2B contracts and more. We will continue to profile local companies like VMWare that are doing well. Like any proud gardener, it’s exciting to see high quality organic growth in our own back yard.

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