Brocade to spend $250M for new San Jose HQ

Network-equipment maker Brocade Communications Systems Inc. said Tuesday it will spend up to $250 million to build a new headquarters campus on North First Street in San Jose.

The communications company (NASDAQ:BRCD) said it acquired three parcels approved for the construction of 562,000-square-feet of offices for $50.9 million.

That's enough square footage to house about 2,200 employees, based on a commercial real estate industry rule of thumb that estimates three to four employees for every 1,000 square feet of space.

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Brocade has retained MFP/Hunter@First Development Partners LLC, an affiliate of the land seller, to construct the buildings and a related parking garage for $173 million above the land purchase price. The property faces Calfornia Highway 237.

At the same time, Brocade said it has acquired a four-year option for 4 acres adjacent to the three parcels for possible future office development. The company agreed to pay $26 million for the additional land.

The company's lease for its existing headquarters at 1745 Technology Drive in San Jose expires in August 2010.