Center Partners grows into Avago space

In a sign of the times, 32,000 square feet that used to house employees of high-tech firm Avago has been filled by Fort Collins-based call center outsourcing company Center Partners.

Avago first listed the space over two years ago. The company inherited 800,000 square feet and about 70 acres of land at the Hewlett Packard Co. campus on Harmony Road in Fort Collins as part of its 2005 spinoff from Agilent Technologies.

For Avago, the Fort Collins site is a bit of an anomaly. It is one of the few sites the company owns, and the largest. It is also one of two company-owned manufacturing facilities. The company employs around 650 in Fort Collins; about 450 in manufacturing and 200 in chip design.

Travis Ackerman, the listing broker with Sperry Van Ness/The Group Commercial, said the space was out of the ordinary for most potential leases, especially in the area of security. Avago has unique security needs, as do the facility’s other tenants – Hewlett Packard Co. and Addison Avenue Credit Union. A lot of call centers looked into leasing it, Ackerman said, adding that he received three to four calls a month but either the companies didn’t want to be part of a campus setting or they weren’t able to work with the security requirements.

For Center Partners, the space was ideal, offering a large, open facility with ample parking.

“Both sides came together to make it work,” Ackerman said. “Avago turned away a lot of people they didn’t think would work.”

He feels that the fact that Center Partners is based locally helped the deal move forward. The lease started in November and the call center was in the process of moving in during the first few weeks of the month.

For now, Center Partners will occupy 16,000 square feet. In April, it will expand into a total of 32,000 square feet with Avago retaining the rest of about 59,000 square feet originally listed for possible future expansion. David Geiger, CEO of Center Partners, explained that the company would be consolidating another of its Fort Collins sites at that time for a total net addition of about 20,000 square feet.

Growth requires expansion

The expansion was necessitated by growth within the company. While there has been some increase in new client accounts, most of Center Partners’ growth is related to existing customers.

“We have had growth in all of our accounts,” Geiger said. “We’re seeing tremendous growth right now as we enter the fourth quarter.”

Center Partners started looking for additional space about a year ago. The company’s employment has grown to about 1,275 employees with another 100 or so being added this month. In 2008, Center Partners had around 700 local employees.

Geiger couldn’t comment on whether it is the norm for businesses such as Center Partners to run countercyclical to the rest of the economy. The firm, founded in 1997, survived one other downturn but only by completely changing its business model.

“When the tech bubble burst, we found ourselves needing to change the type of service we offer,” he said.

The company expanded beyond basic technical support to include high-end sales and retention, customer lifecycle support and higher levels of technical and customer care. Geiger explained that the company doesn’t focus on commodity services such as change of address and simple transactional work but instead goes for the value-add of conversation between consumer and caller.

“Each of our calls has to lead to a positive ROI,” he said.

Other outsourced service businesses appear to be thriving in this market, too. Constant Contact, which settled into its permanent facility at Centerra in Loveland in May, saw a 47 percent year-over-year increase in revenue for the third quarter. The company provides outsourced services for e-mail marketing, online surveys and event marking.

For the quarter ending on Sept. 30, Constant Contact reported total revenue of $33.5 million and a net income of $1.47 million. That’s compared to revenue of $22.9 million and a net loss of $399,000 for the third quarter of 2008.

For Constant Contact, the growth is attributed more to new customers than to expansion of existing client relationships. The company saw a 44 percent increase in the number of average monthly e-mail marketing clients – from 217,495 in the third quarter of 2008 to 314,028 this year. The average revenue per customer, on the other hand, was only up slightly – from $35.03 in 2008 to $35.59 this year.

Constant Contact currently employs 117 employees in Loveland. It has five open positions through the remainder of the year and plans to continue hiring sales and support staff in 2010.

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