April 29, 2005
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About 50 employees of Lenovo, which is buying I.B.M.’s personal computer division, will move temporarily to this building in Purchase, N.Y. Permanent headquarters in Westchester County are planned.
April 27, 2005
REGIONAL MARKET / NEW YORK AREA
Chinese PC Giant Making Hurried Move to Westchester
By ELSA BRENNER
PURCHASE, N.Y., April 25 – Lenovo, the Chinese computer maker that is scheduled to complete its acquisition of I.B.M.’s personal computer division next month, has announced it will move its worldwide headquarters to Westchester County from Beijing this spring.
About 50 Lenovo employees are expected to move into temporary space in Purchase next month, with another 100 people working for the company in Westchester by 2008, said Steve Foley, a spokesman for the Chinese company.
Until Lenovo finds a permanent home in Westchester, it will sublease 40,000 square feet on the top floor of a four-story commercial office building in Purchase occupied until last year by R. H. Donnelley, the Yellow Pages publisher, which has moved to North Carolina.
“Lenovo needed something relatively quickly,” said Andrew D. Carney, an associate director for Grubb & Ellis in Stamford, Conn., the commercial real estate broker representing I.B.M., which is based in Armonk, and the Lenovo Group.
“Lenovo wanted to be close to I.B.M., but independent,” Mr. Carney said, explaining why the company is not moving into I.B.M. space, even though it will be working with I.B.M. offices in Yorktown and Armonk in Westchester and in Fishkill in Dutchess County.
Lenovo’s current headquarters in Beijing will be called Lenovo China after the transaction is completed, and the focus there will be on the personal computer market in Asia. Another division, Lenovo International, will be based in Raleigh, N.C., and will be responsible for marketing, research and development. I.B.M.’s research and development facilities in Yamato, Japan, and its design center in Raleigh will also become part of Lenovo.
Stephen M. Ward Jr., currently senior vice president and general manager for I.B.M.’s Personal Systems Group, will be chief executive of the Lenovo Group. Yuanqing Yang, currently vice chairman, president and chief executive of Lenovo, will be the chairman and will be based in Westchester.
Mr. Carney would not disclose how much Lenovo was paying for the 18-month lease at the Centre at Purchase, at 1 Manhattanville Road, but he said that comparable Class A office space in Westchester would rent for $28 to $30 a square foot a year.
Lenovo plans to spend about $5 million to equip the temporary quarters at the complex of four bluish-green glass buildings, according to information it filed with the Industrial Development Agency of Westchester.
In the long term, Lenovo will either build in Westchester or lease space in a large existing building, Mr. Carney said. He said that the company would consider moving into a building like the 523,000-square-foot office site formerly occupied by the Altria Group in Rye Brook, N.Y., which is being renovated for multiple tenants by the White Plains developer Robert P. Weisz.
Lenovo’s intention to move its headquarters to New York was announced when I.B.M. sold its personal computer business to the Chinese company last December. The factors influencing Lenovo’s decision to move to Westchester, Mr. Carney said, included its highway system and its airport, which has one of the largest fleets of corporate planes in the United States.
Competitive real estate prices were another factor. “Westchester tends to be less expensive than other places,” Mr. Carney said, noting that comparable Class A office space in Fairfield County, for example, sold for $40 to $75 a square foot a year.
Under its agreement with the Industrial Development Agency, Lenovo will receive several inducements, including exemptions from sales and use tax on the purchase, installation and maintenance of building materials, furniture, fixtures and equipment, as well as exemption from a mortgage recording tax on money borrowed for construction.
The value of the initial benefits for the temporary quarters was estimated at $40,000 by Teri Waivada, executive director of the agency. The agreement also says the incentives may be expanded to include the permanent headquarters site when that is selected.
The Lenovo transaction is one of several commercial real estate deals of about 50,000 square feet that are pending in Westchester, said Glenn P. Walsh, a senior director for Cushman & Wakefield. The office vacancy rate for the county, which has an inventory of more than 28.5 million square feet of commercial space, was 17 percent at the end of the first quarter of this year, up two percentage points in the last 15 months, according to figures compiled by the firm.
The acquisition agreement with I.B.M., which was announced in December, calls for Lenovo to pay $650 million in cash and $600 million in securities for the personal computer unit, as well as assuming $500 million in debt obligations.
Lenovo, which is listed on the Hong Kong stock exchange, was the first company to introduce home computers in China and since 1997 has been a leading brand of personal computers in Asia. It has annual revenue of about $3 billion.
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