Less was not more in this case for Ross Stores Inc., the discount retail chain whose slogan is “Dress For Less.”
Having outgrown its long-time home in Newark, CA, the discount retailer said Tuesday that it plans to move its corporate headquarters into a larger 150,000-square-foot space in Pleasanton, CA next year.
Financial terms were not disclosed. But the asking rate for comparable office space in Pleasanton averaged $2 per square foot, according to a recent quarterly report by CB Richard Ellis, a commercial real estate services company. A quarterly report by Cornish & Carey Commercial estimated the rate at $1.50 to $2.25 per square foot.
The 10-year deal is a bright spot in the region’s depressed commercial real estate market. It marks the largest lease signed this year in Pleasanton’s Hacienda Business Park, said general manager James Paxson. The office vacancy rate there, once less than 1 percent during the high-tech boom, is now more than 11 percent.
“This is a pretty significant lease,” Paxson said. “Were extremely pleased.”
Ross, which in the past year has generally defied weak retail spending, is in the process of nearly doubling its retail stores from 500 to 900 by 2007.
It is constructing a new distribution center in Southern California, which is scheduled to open later this year. The company has offered the 800 workers in its Newark distribution center jobs in the new distribution center.
Spread out among four buildings in Newark, Ross also plans to consolidate its 500 corporate employees in Pleasanton. They will occupy four stories in a five-story building at the CarrAmerica Corporate Center, sharing a 1.1 million-square-foot campus with Pleasanton-based grocer Safeway, AT&T and SBC. Ross plans to renovate the space in early 2004 and move its workers there by the summer.
Ross will take over the space from Pleasanton-based software firm Commerce One, which is subleasing it from PeopleSoft Inc., another Pleasanton-based software maker. PeopleSoft’s five-year lease ends December 2004 and Ross will take over its lease for one year.
Katie Loughnot, vice president of media and investor relations, said that the company has not decided what it will do with its 500,000-square-foot Newark headquarters and distribution center, which it owns.
“Were evaluating our options right now,” she said.
