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HP readying move to Nautilus site?

Parking lot expansion, SEH America's plans fuel speculation

By Cami Joner
Published: October 19, 2010, 12:00am

Hewlett-Packard Co. is preparing to vacate the sprawling east Vancouver campus it sold to SEH America in 2009, paving the way for a long-planned expansion by SEH.

Meanwhile, HP could by mid-2011 move back to its original north campus, a massive, 480,000-square-foot structure off Southeast 164th Avenue that is now occupied by Nautilus Inc. Nautilus, the struggling fitness company, scaled back in 2009 and now occupies only 70,000 square feet of that building, leaving ample space for both companies.

SEH, a subsidiary of Japan’s Shin-Etsu Handotai Group, purchased HP’s 174-acre campus at 18110 S.E. 34th St. for $55 million in June 2009. The silicon-wafer maker plans to use the site to explore emerging fields, such as solar energy.

HP has been leasing the site from SEH, which does not have immediate plans to begin production there, said Tatsuo Ito, executive vice president of SEH.

“We have a plan long term, but not materialized yet at this moment,” Ito said.

SEH has been notified that HP is ready to move out of the 34th Street site within a year.

Palo Alto, Calif.-based HP stuck to its usual policy and declined to comment.

However, plans to enlarge the parking lot at the Southeast 164th Avenue building by more than 500 stalls have fueled more speculation that HP will move into its former north campus.

Building owner Pac-Trust started looking for tenants after Nautilus scaled back. Pac-Trust did not respond to requests for comment.

But HP employees have been hearing for months that they would be transferred to the site, according a family member of an HP worker.

Real estate insiders say HP is the most likely tenant behind the parking-lot expansion, which will pave over private basketball courts, a softball diamond and a walking track installed by Nautilus. A private football field will remain.

If it didn’t have a tenant in mind, the building owner, Portland-based Pac-Trust, probably would not invest in the parking-lot expansion, said Brian Sullivan, a commercial real estate agent with Coldwell Banker Commercial Bob Bernhardt in Vancouver.

“You wouldn’t do it on a whim. You would only do that if you had the demand,” Sullivan said.

Other local experts also suspect the site is being readied for HP, one of the few companies searching for a large, contiguous space, said Byron Roselli, a vice president with Vancouver-based Eric Fuller & Associates Inc. commercial real estate firm.

“That would be my expectation: The (Nautilus) building is where HP is going,” Roselli said.

He estimated that HP would need space for about 300 employees in between 50,000 and 70,000 square feet.

“There’s not really any other place that makes sense for the amount of space,” he said.

Other real estate experts speculated that HP’s move fits into a broader pattern of changes at SEH America. In August, the company hired Vancouver city manager Pat McDonnell, who will leave his city post on Nov. 1 to become SEH’s senior director of site services in Vancouver.

“I think it’s clear that SEH is going to make a move onto their property based on the fact that they’re hiring people,” said Roger Qualman, a Vancouver-based executive vice president of NAI Norris Beggs & Simpson commercial real estate firm.

With 174 acres, four buildings and 694,000 square feet of space, the former HP campus has the potential for as much as $1 billion of industrial development in coming years, experts say of the site, where HP engineers invented and developed the company’s hot-selling line of inkjet printers.

Inkjets boosted HP sales throughout the 1980s and 1990s. The company’s Vancouver work force peaked in 1996 at 3,500. HP gradually began to reduce its Vancouver work force beginning in 1999, when printer manufacturing ended here and was moved to Malaysia.

Libby Tucker, Columbian staff writer, contributed to this story.

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