eBay Denies Search for Space has Ended at Novell's Doorstep

SAN JOSE, CA-Eschewing rumblings in the brokerage community, the online auctioneer eBay is denying that its search for expansion space has ended at Novell’s doorstep.

Kevin Pursglove, the spokesman for eBay, tells GlobeSt.com the company is indeed talking with Novell about its five-building 511,000-sf campus on North First Street near Mineta San Jose International Airport. Then again, says Pursglove, they are talking to a couple of others as well, and, in the long run, could end up staying at its current headquarters on Hamilton Avenue.

eBay is three years into a five-year synthetic lease for the Hamilton Avenue space. The lease totals 460,000 sf. eBay occupies 314,000 sf and has subleased a portion of the remainder. According to terms of the agreement, it must either purchase the facility prior to March 1, 2004 for $126.4 million–the lessor’s cost to develop the property–or sell it to a third party, in which case eBay has guaranteed the lessor no less than $111.2 million, which equates to 88% of the development cost. The rumored purchase price for Novell’s complex is roughly $100 million.