Irvine’s Sage Software Inc., Orange County’s second-largest software company by sales, is set to move its headquarters to a smaller space within the Irvine Spectrum later this year.
Sage, the North American unit of Britain’s Sage Group PLC, last week finalized a deal to move its operations to a pair of buildings at Irvine Company’s Discovery Business Center, a 24-building campus near Irvine Center Drive and Sand Canyon Avenue.
The software company is leasing about 91,000 square feet of space in two buildings, according to brokers who worked on the deal.
That’s a cut of about 50,000 square feet of space for Sage’s local operations—one of the latest examples of cost cutting by Chief Executive Sue Swenson.
Sage, which makes software that does accounting, tracks customers and manages payroll and other functions for small and midsized companies, has been focused on tightening up operations and consolidating redundant positions after expanding through nearly a dozen acquisitions in recent years.
Sage cut about 650 jobs across North America last year and in 2008. About 400 of Sage’s roughly 4,000 North American workers are in Irvine.
Local operations previously included about 20,000 square feet of warehouse space, which the company doesn’t use anymore.
The dropping of the industrial space, along with a much more efficient use of space at the new offices, are the reasons behind the downsizing, according to brokers.
The bulk of the Discovery Business Center office space being leased is at 6561 Irvine Center Drive, where the company will be based and taking up the entire 64,000-square-foot building. The 10-year lease is slated to begin in September.
Terms of the lease weren’t disclosed. Space at the two buildings Sage is moving to had been listed on the Irvine Co.’s Web site at monthly rents of $1.45 per square foot.
Sage isn’t moving too far. It’s now in Irvine Co. space a couple miles away.
Landlord Irvine Co. made “a heroic” effort to retain Sage, according to Jeff Manley, chief executive for the Newport Beach office of tenant brokerage Cresa Partners LLC.
The company had explored other options outside Irvine before opting to remain in the same area, according to Steven Case, executive vice president for Newport Beach-based Irvine Co.’s office division.
Irvine Co.’s Michael Santley and Jeff Shaw represented their company in the lease, while Cresa’s Manley, Wes Hunnicutt, Rick Martin and Angelica Johnson represented Sage.
Sage is the second big-name software company represented by Cresa that’s opted to relocate its area operations in the past month. Redwood City-based Oracle Corp. recently signed a lease to consolidate its local operations in Irvine in a high-rise that previously served as the headquarters for Taco Bell Corp.
Sage currently operates out of a pair of buildings, with its local headquarters at 56 Technology Drive, a 71,000-square-foot building in the Lakeview Business Center, an office complex located just west of the Santa Ana (I-5) Freeway.
That space is being marketed at monthly rents of $1.15 per square foot and is available as of November, according to the Irvine Co.’s marketing material.
Looking for Rebound
The news of the relocation comes as Sage is looking to capitalize on a rebounding economy this year.
Sage was hit hard during the downturn as many of its small business customers opted to hold on to their cash and defer payments and purchasing decisions.
In 2008, Irvine’s Blizzard Entertainment Inc., the top maker of online video games, surpassed Sage as Orange County’s biggest software company by sales.
Sage reported earlier this month that its North American sales for the six months through March were $429 million, down 6% from a year earlier. The North America business unit didn’t report profits.
Sage’s British parent saw sales of $1.14 billion, down 3% from the same period a year earlier. It reported earnings before interest, taxes and amortization of $289 million.
Chief Executive Swenson, who came on board in 2007, has cut hundreds of jobs across Sage’s disparate business units the past few years. She’s also hired a handful of executives in Irvine.
The company’s goal for this year is slow, steady growth, she told the Business Journal in February.
