In the case of the $1.2 billion-valued software provider, about 95% of its approximately 1,800 employees based in the U.S. have been working from home since last March when the pandemic began, including a local workforce of about 300, the company said.
NextGen said it will maintain a smaller footprint in Irvine but doesn’t expect the move of its executive office to have much impact on its local job counts.
It’s looking to sublease up to nearly 83,000 square feet at the Lakeshore Towers office at 18111 Von Karman Ave., brokerage data indicates.
The company is asking $2.25 per square foot for the space, in a lease that would run until early 2025, marketing material for the space shows.
The company’s new headquarters is an Atlanta-based office that it has maintained since 2014 and has used as a leadership site over the years. It runs 27,000 square feet, according to the company’s latest annual report.
NextGen has executive team members in various locations throughout the country, so geographically, Atlanta is more centrally located, the company said.
Regulatory filings indicate the company expects to see tax savings as a result of the move.
46 Years in Market
NextGen is increasingly reducing its real estate footprint in the U.S., after starting as a dental software platform in Irvine in 1974.
The company was originally known as Quality Systems Inc. and went public on the New York Stock Exchange under the symbol QSII in late 1982. It expanded to the ambulatory healthcare market in 1996, growing its digital offerings through a series of acquisitions over the years.
NextGen changed its name to align the company under a single brand and visual identity in 2018. It has completed about a dozen acquisitions since its inception, and it serves more than 155,000 providers today.
Last May, the company said it would execute a reduction in its workforce of around 3%, vacate portions of its Irvine office and the remainder of its San Diego office, as well as other cost reductions. It recorded $2.6 million of restructuring costs including payroll-related and severance costs for the nine months ended Dec. 31, 2020.
Pandemic-related measures followed a mid-2019 restructuring plan, during which NextGen said it vacated portions of its offices in Philadelphia, St. Louis, Irvine and Atlanta. It recorded $2.4 million of restructuring costs for the nine months ended December 31, 2019.
Software, Healthcare Movers
NextGen joins the ranks of several other firms that have recently departed the area.
AI technology firm Veritone Inc. (Nasdaq: VERI) and healthcare real estate investment trust Healthpeak Properties Inc. (NYSE: PEAK) moved their headquarters to Denver in recent months.
Irvine’s Tri Pointe Homes Inc. (NYSE: TPH) this year moved its principal executive offices from Irvine to Nevada.
Both Mitsubishi Motors and Cryoport Inc. (Nasdaq: CYRX) relocated to Nashville a little over a year ago.
Cryoport and Healthpeak still have local offices in Irvine and Tri Pointe has kept its main corporate office along Jamboree Road, while artificial intelligence firm Veritone and Mitsubishi Motors have vacated their respective office spaces.
Veritone’s former headquarters near South Coast Plaza was quickly snapped up by California Pizza Kitchen, which is subleasing the space as its new executive location, the Business Journal was the first to report earlier this month.
Sizeable portions of the local offices of cybersecurity firm Cylance (now part of BlackBerry), healthcare-focused Kareo, and upstart fintech Happy Money, among many others, are also up for sublease, local brokerage data indicates.
