HP's C-suite team is expected to discuss, but not dwell on thepending real estate decisions in the Sept. 15 conference call aboutthe integration of Plano, TX-based EDS, which has been pruning itsbricks and mortar since 2005. Hewlett-Packard Development Co. LP'spre-merger portfolio is roughly 61.9 million sf, spanning more than170 manufacturing locations and including its largest office,warehouse, data center and distribution sites, according to itswebsite.

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Exactly much HP leases and owns worldwide is anybody's guess,with its PR team unwilling to discuss the portfolio size and theinformation noticeably absent from SEC filings. But, it does havean active acquisitions and dispositions team standing guard overthe plans in the hopper.

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In contrast, EDS and its consolidated subsidiaries occupy 218locations in 42 US states and 408 locations in 45 countries outsidethe US. The SEC filing shows 2.7 million sf are owned and 22.6million sf are leased. In October 2005, EDSsold 2.75 million sf in the US and Europe to Dallas-based KollDevelopment Co., which has redeveloped the firm's fabled "fortress"into the Campus ofLegacy.

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[IMGCAP(2)]Just last March, EDS vacated the last of its 600,000sf on KDC's grounds and retreated to its neighboring700,000-sf-plus headquarters and data center complex at 5400 LegacyDr. on 91 acres. The best guess is EDS controls at least onemillion sf in Plano, Las Colinas and CentrePort Business Park nearDallas/Fort Worth International Airport.

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HP started to consolidate its locations in third quarter 2006,focusing on reduced greenhouse emissions. It consolidated 85 datacenters worldwide into six facilities in Atlanta, Houston andAustin. HP also eliminated hundreds of CRE locations to create asmaller core to reduce IT spending and real estate costs.

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The EDS takeover is the largest in the IT services industrysince HP bought Compaq Corp. in 2002, when it inherited the Houstoncampus at 20555 State Hwy. 249. In July 2007, HP sold487,591 sf on a 44-acre tract of the campus to Dallas-basedMacfarlan Capital Partners and Buchanan Street Partners of NewportBeach, Ca. Six months later, HP put more on the sales block andreserved the southern part of the campus for itself. HP'sfive-million-sf footprint is assessed at nearly $200 million.

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HP is holding a contract to sell 1.95 million sf in five class Aoffice buildings, four parking garages with 6,022 spaces, 128,998sf in common buildings, 19.8 acres of raw land and a 5.4-acreredevelopment tract. It's no secret in Houston that CapitalCommercial Investments Inc. of Austin is winding up due diligenceon the package developed between 1989 and 1999. The deal isexpected to close in mid- to late September.

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HP will vacate the buildings in stages through year's end,retreating to 2.5 million sf of office, data and tech space,according to Ken Gilbert of Liberty-Greenfield California Inc. inSan Bruno, CA. He and Stewart Robinson with Houston-based Hineswere leading the hunt for a buyer.

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The sales price is off limits, but Gilbert did say thefour-month marketing process ended in a best and final with fouroffers on the table. And, it definitely wasn't a play for atraditional deep-pocketed investment group. "The challenge is it'sa very large block of space that will very soon be empty," he tellsGlobeSt.com. "Even in a market that's robust like Houston, twomillion sf is a large block. It wasn't for the institutionalmarket."

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The HP-EDS merger creates a company with 210,000 employees in80-plus countries. The combined 2007 revenue totaled $38 billion.EDS is being branded as an HP company, which will remainheadquartered in Plano. EDS' chairman, president and CEO RonRittenmeyer is president and CEO of the new group. The plan callsfor HP's technology solutions group to shift outsourcing services'operations to EDS along with pieces of its consulting andintegration activities. How those plans will shake out with thereal estate is only privy to insiders at this stage of thegame.

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