Emulex Selects Farm Land for New, Bigger HQ
By ANDREW SIMONS
Emulex Corp. has found a Costa Mesa bean field where it plans to build a four-building headquarters that stands to more than double the size of its current 90,000-square-foot campus, according to Chief Executive Paul Folino.
“Right now we’re in a number of buildings over here,” Folino said of Emulex’s current campus on Harbor Boulevard in Costa Mesa. “But that’s just tiding us over.”
Emulex signed a 10-year lease for the planned campus with an option to buy the facility during the term of the lease. Construction of the 247,000-square-foot campus on the 14.5-acre site is set to begin this fall.
C.J. Segerstrom & Sons owns the land and is set to develop the campus. A builder hasn’t been selected yet.
Emulex plans to move in two phases, with the first group of people and operations set to relocate in fall 2003, when three of the buildings are slated to be completed.
Emulex then plans to move into a fourth building. A quarter of the space will be used for research and development, according to Folino.
The move marks the end of Emulex’s 15-year tenancy at its present location.
“Moving is pretty disruptive,” Folino said. “Part of our strategy is to meet our growth requirements.”
Emulex, which makes circuit boards that link data storage devices, has about 200 employees in Orange County. By the time Emulex moves, it expects to have about 275, according to Folino. The new facility will be able to house as many as 600 employees, Folino said.
Like other companies, Emulex has seen its sales growth slow from the heady days of the technology boom. But the company has held up better than other tech companies.
Emulex has been looking for a new headquarters since its lease expired in 1999. The company got an extension while it looked for new space.
Officials considered other areas in Costa Mesa, Irvine and other South County cities, Folino said.
“We wanted to keep all of our options open,” he said. “We attended numerous city council meetings and several public hearings.”
In the end, Emulex officials decided the new site, near John Wayne Airport and near a majority of many Emulex workers, would be the best choice.
“And we really wanted to stay in Costa Mesa,” Folino said.
The company has no plans to expand its facilities in Boston or Colorado, he said.
Emulex is following the lead of Experian Information Solutions Inc. The provider of credit reports and other data services has moved all but a handful of workers from Orange to a new campus built on former farmland near South Coast Plaza.
Emulex makes a product called host bus adapters,components used in attaching storage units to a network. Network attached storage products allow for a single repository for data,stored on an independent server somewhere,to be accessed across a network by multiple servers with many different users.
Techies say this improves upon the age-old method of accessing data,storing data on a server that also handles network traffic,because it improves network efficiency. Emulex’s products speed the flow of data over storage networks.
Emulex rode the storage wave in the last part of the 1990s but was hit hard when storage slowed down, particularly in the past year. Shares dove some 60% from a year ago to a September low. Emulex’s stock since has recovered, climbing 131% to a recent close of 29.
IBM Corp., EMC Corp. and Compaq Computer Corp.,which together make up 75% of the Emulex’s sales,all have reported slowdowns in their businesses.
Analysts seem to like Emulex. In the past seven months seven analysts upgraded shares of the company at least to a “buy” rating.
According to a recent note from SoundView Technology Group Inc., the market for host bus adapters is largely dominated by Emulex and Aliso Viejo-based QLogic Corp., which Emulex spun off in 1994.
“The (host bus adapter) market is consolidating,” said SoundView analyst Glen Ingalls. “Both Emulex and QLogic are growing faster than the (host bus adapter) market overall. Emulex is benefiting from Compaq discontinuing its (host bus adapter) program and awarding the business to Emulex.”
