According to the Securities and Exchange Commission filing at the end of March, PeopleSoft's option to renew a seven-year-old synthetic lease agreement or acquire the properties for their cost of construction came due in February. Without providing details about the real estate, PeopleSoft says it exercised its option on Feb. 27 to acquire the properties for $70 million.

A similar decision will have to be made later this year, according to the SEC filing. PeopleSoft says it has a similar synthetic lease arrangement for other Pleasanton properties for which the same option comes due in September. The cost to acquire the properties under that arrangement is $105 million, according to the filing. Again, no specifics about the property were provided in the filing, and a PeopleSoft spokesperson declined GlobeSt.com's request for the information.

Regardless, the $105-million option may be exercised as early as June in response to a relatively new interpretation by the Financial Accounting Standards Board related to variable interest entities, which include synthetic leases. "We may be required to consolidate the financial position and operating results related to this synthetic lease if we do not exercise our purchase option before July 1, 2003," states PeopleSoft's annual report.