Vizio Inc. has bought a three-story office building near its Irvine headquarters for $7.5 million.
The 36,000-square-foot building at 35 Tesla Drive could come to house employees as the company expands, according to a source familiar with Vizio.
One of the top sellers of flat-screen TVs, Vizio bought the building from Irvine-based Owen Group, which got the property for $6.3 million in a January foreclosure sale.
Vizio paid $208 per square foot for the building, which is 25% full with a furniture company leasing the top floor as a showroom.
Vizio had been interested in the building for months and was close to buying it earlier this year but lost out to Owen Group, according to Voit Real Estate Services’ Trent Walker, who represented the seller.
“It was more of a strategic move for Vizio than anything else,” he said. “The building is one of the nicest in that area.”
The purchase is a big move for Vizio, known for a low-frills business model.
The company designs and markets liquid-crystal display TVs and relies on Taiwanese contract electronics maker and investor AmTran Technology Co. and others for production.
“They’ve had a really lean operation,” said Riddhi Patel, director of television research at the Santa Clara office of El Segundo-based market researcher iSuppli Corp., part of Colorado’s IHS Inc.
Employees
• Headquarters: Irvine
• Founded: 2002
• Business: flat-screen TVs
• Yearly revenue: $3 billion
• Notable: Building buy brings Irvine space to 63,000 square feet
Vizio has been growing local employment and now has about 195 people in Irvine, up 66% from a year ago. It employs 370 worldwide, up 89%.
The new space could serve as a base for design and marketing teams focused on consumer electronics accessories. Among Vizio’s offerings beyond TVs are soundbar speakers, subwoofers, Blu-ray players, headphones, cables and wireless routers.
Tablet
The company also has jumped into the market for tablet computers. Its first model, dubbed the Vizio Tablet, debuted at January’s International Consumer Electronics Show in Las Vegas.
“They are on a growth path,” Patel said.
Vizio will have to add some office operations to support new products, according to Paul Gagnon, director of North America TV research at Santa Clara’s DisplaySearch, part of Port Washington, N.Y.-based NPD Group Inc.
The company now gets 80% to 90% of its sales in the U.S., where the market for flat-screen TVs is maturing after several years of hot sales.
“They could be eying some additional space,” Gagnon said. “That makes sense if the company wants to expand internationally.”
Vizio will have to make headway in emerging markets such as Russia, India and Latin America to keep up its fast pace of growth, according to Gagnon.
A lot of Vizio’s growth came in the past three years as it steadily picked up market share and became the top seller of LCD sets in the U.S.
The company sold 6.9 million TVs in 2010 for a total North America market share of 18%, according to DisplaySearch.
That’s up from 2009, when Vizio sold nearly 6 million sets and had 17% market share.
Vizio started in 2002 amid the flat-screen boom. It has yearly sales of about $3 billion and has taken away business from big-name rivals, including Samsung Group, Sony Corp. and Funai Electric Corp., which sells sets under the Philips brand in the U.S.
The company started sales of soundbars last year and now has roughly half the U.S. market, according to data from the Arlington, Va.-based Consumer Electronics Association. Its Blu-ray DVD business, while still small, is up roughly 400% since 2009, cofounder and Vice President of Marketing Communications Laynie Newsome told the Business Journal last year.
Vizio counts on discount retailers Target Corp., Costco Wholesale Corp., Wal-Mart Stores Inc. and others for big chunks of its sales.
It doesn’t compete in higher-end plasma TVs, leaving that niche to Samsung and others.
Marketing
The company has ramped up its marketing, signing on as a sponsor of the Rose Bowl, a premier college football game that draws millions of viewers around the world.
Rapid growth prompted Vizio to move from Costa Mesa in 2007 to its current Irvine headquarters, a 27,000-square-foot building that tripled the size of its former space.
The company wanted to stay in Orange County, where founder William Wang has long ties dating back to his days selling computer monitors.
