Palo Alto's information-technology giant VMWare is preparing to gobble up one of the largest and most lucrative research spaces in Palo Alto -- a 1-million-square-foot property formerly occupied by pharmaceutical company Roche.
City Manager James Keene confirmed Wednesday night (May 25) that the deal is in the process of getting finalized. The lease of the former Roche property, which makes up about 10 percent of the entire Stanford Research Park, would dramatically expand VMWare's presence in the bustling technological hub and allow it to nearly double its work force to about 6,000 employees, making it the largest employer in the city.
The acquisition of the Roche property is one of several recent expansion projects for VMWare, which is a worldwide leader in the rapidly emerging fields of "virtualization" and cloud computing. The company had recently expanded its Hillview Avenue campus by 460,000 square feet and built a new gymnasium. According to the San Jose Mercury News, VMWare beat Google and other potential buyers for the former Roche site and is paying $225 million for a lease that will expire in 2045.
The property, which makes up about 10 percent of the research park, has been one of few glaring vacancies in a research park that is otherwise almost completely built out. In the last few years, the Stanford Research Park has seen an infusion of hot, young companies such as Facebook, Skype, Tesla and Better Place. The park is also home to a long list of established industry titans, including Hewlett Packard, Varian Medical Systems and SAP.
VMWare has been eyeing the Roche site for some time. Planning Director Curtis Williams said company officials approached the city several months ago to inquire about various regulations at the site. Keene said the deal is expected to get finalized in the coming weeks. He praised VMWare's expansion as another positive sign for the city's already bustling high-tech scene.
"I think this is great news," Keene said. "VMWare is the cornerstone of the cloud-computing community.
"It's a good convergence of our energy focus and our innovation focus," Keene said.