The Idaho Department of Administration has signed a letter of intent to enter into talks to acquire HP Inc.'s Boise, Idaho, campus for $110 million.
As part of the proposed purchase and sale agreement, HP would lease back over half the office space in the 200-acre complex with eight buildings for an initial seven-year term.
A top executive for one of HP Inc.'s top partners, who did not want to be identified, applauded HP for moving to take the real estate off its books and using the cash to invest in its core business.
"This would provide HP with $110 million that is now liquid," said the executive. "There's a reason companies decide not to own real estate. It's because it is not a good use of resources. It is often cheaper and better to lease than to buy. HP has been buying and selling real estate for as long as I can remember."
The state of Idaho would assume third-party leases with all of the businesses located on the campus. The state said it initially will use 152,000 square feet of office space, increasing to 366,000 square feet in 2020 as those other third-party leases expire.
“This opportunity for an agreement with a valued business leader will benefit both parties and addresses a pressing need for the state of Idaho,” said Gov. Butch Otter in a prepared statement. “We’ve been looking hard for the right place at the right price for our agencies, and the HP campus really fits the bill. A great employer is reinforcing its commitment to Idaho and the state is saving money, so it’s a win-win.”
HP aims to eliminate 1,500 to 2,500 positions in the current fiscal year. That is part of an overall $1 billion in productivity savings that the company is targeting for the current fiscal year.