Tech Company Fishes for Talent in Less Crowded Pond

By Sharon Simonson

The search for talent is pushing a Menlo Park maker of commercial-grade touch screens and touch monitors to move its headquarters south to the state Highway 237 corridor in Milpitas and to expand.

Elo Touch Solutions Inc., a former business unit of Tyco Electronics Corp. that generated sales of $413 million in fiscal 2011, has leased nearly 75,000 square feet from Spear Street Capital for its new global headquarters and center for innovation at 1033 McCarthy Blvd. in the five-building Murphy Crossing campus.

Elo executives believe the move better positions the company to capture East Bay and South Bay engineering talent while keeping links to the Peninsula via state Highway 237. The company expects to grow and to hire.

“Moving further south puts us closer to a lot of our OEM [original equipment manufacturer] customers and partners that are more traditional Silicon Valley-based companies but not that far where we can still draw [talent] from the Peninsula and the East Bay and pick up the communities in the South Bay and Silicon Valley,” said Trent Waterhouse, Elo’s chief marketing officer.

The company, whose customers include Amazon.com Inc., Walt Disney Co., Walgreen Co. and Harley Davidson Inc. is expanding its real estate footprint while consolidating employees now in 60,000 square feet across three buildings. Terms of the deal were not released.

“When you are in the area of technology we are in, our most important asset is the innovation and experience in the engineering minds that are working for us,” Waterhouse said. “As companies like Apple and Microsoft educate the whole world on the value of touch, we have been on the commercial side of the applications of touch. But, all of the consumer applications are teaching us about it, and we see more scenarios being presented to us by our end-user customers, and we will need more talent.”

Demand for engineers is motivating lots of his clients’real estate planning, said Elo broker Mike Saign, a vice president with Cornish & Carey Commercial Newmark Knight Frank. The East Bay is perceived as a relatively untapped resource pool even as companies seek to outdo one another with pay and other perks to recruit top talent elsewhere. “I have had different clients tell me that while incredible competition on the Peninsula, in San Francisco and in Silicon Valley is obvious, the East Bay talent is plentiful and under-recruited,” he said.

The campus that Elo has selected is amenity rich. It has a full-service cafeteria, sport courts and plentiful outdoor green space. The building is in shell condition, meaning the company can do tenant improvements tailored to its needs. The location also is on light rail and close to both U.S. 880 and U.S. 101, he said.

Elo makes touch screens, touch monitors, all-in-one touch computers and interactive display signage. The products are used in the gaming, hospitality, retail, industrial automation, medical, and transportation sectors. The company sold in June to Los Angeles investor The Gores Group. Gores paid $380 million all cash.

The overall touch market is estimated at $3 billion and is growing at an 8 percent annual clip, Waterhouse said. The company has 12,000 customers in 60 countries. Its original-equipment manufacturers include General Electric Co.

Elo’s touch technology works not only on glass but also on materials such as plastic and wood, he said, nor does it react solely to one kind of touch. “The touch on the Android, or Apple or Microsoft tablet is projective touch. There is resistive touch. There is acoustic and optic touch. And most people recognize that if you are wearing gloves, it doesn’t work or if you don’t have enough moisture in your fingers. We get around those challenges,” he said.

The Highway 237 corridor has gained sharply higher stature as an attractive location in the latest technology industry recovery. Video conferencing equipment maker Polycom Inc. moved its headquarters there earlier this year. Amazon is opening a nearly 600,000-square-foot office for Lab126, a research and development arm that designs and engineers portable consumer electronics such as the Kindle. In the third quarter, Dell Inc. and Arista Networks Inc. each signed 149,000-square-foot leases for office space at the The Irvine Cos. Santa Clara Gateway project, nearly a million square feet that the Newport Beach behemoth is developing. Dell already had committed to occupying 240,000 square feet across the street at its Silicon Valley Research and Development Center.

Elo’s 150 local employees will move to the Milpitas location in March, where Elo will do both engineering and prototype manufacturing. “It is always good to have your engineers and production teams under the same roof. It helps you work out kinks before it goes overseas,” Waterhouse said. The company hires mechanical, electrical and field-application engineers, he said.

Based on membership in the professional association known as the Institute of Electrical and Electronic Engineers, Santa Clara County is home to more than a third of the electrical engineers in California, approximately 8,600, according to Sedway Consulting. California has 15 percent of all electrical engineers in the United States, an estimated 200,000 people.

Jeff Arrillaga, Kurt Heinrich and Chris Shaffer, senior vice presidents with Cornish, represented the landlord.

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