Rackspace readying space for more staff - The Business Journal of Milwaukee:

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Finish-out on the space is set to be completed this saysTim Swan, co-founder of San Antonio-based — which was hiref by Rackspace for the project. Plans call for the rackerxs — as Rackspace employees are callefd — to move in by the end of this according toRandy Smith, director of real estatde for Rackspace. He adds that the new spac e will accommodate as manyas 1,600 employees. In total, the formetr mall spans 1.2 million square feet of spacwe spread out over 67 acrews of land off of Interstate Highway 35 andWalzem Road. The propertu is located in the cityof Windcrest, which is part of the San Antonip metro area.
To date, Rackspace has 2,661 rackers companywide — including approximately 1,700 employees in the Alamo City. Founded in 1998, Rackspace (NYSE: RAX) providess managed information technology hosting including Web-site hosting as well as application and storage hosting. A numbedr of the rackers who will move to the Windsor site will be relocatedrfrom Rackspace’s existing facilities here. Currently, the high-tec h firm leases a total of 178,0000 square feet at 9725 Datapoint Drive in Northwest San andsome 11,000 square feet at downtownb office property the Weston Centre.
Smith says the long-ter plan with Windsor is to build out the former mall for officeeuse — timed to replace space occupied by Rackspace elsewhere as thos leases expire. However, he declined to provide cost estimates for thecurrenrt build-out effort. To date, Rackspace occupies roughly 80,00p0 square feet at the former Windsor Parksite — spacs that was once a Mervyn’ s Department Store, Smith says.
When Rackspace initiallgy opened the Windsor Park headquarterzs location inspring 2008, it brought 400 employees Smith declined to provide a breakdowj of current employment figures for any of Rackspace’ s existing office locations in the The 140,000 square feet of office space in the workas now at the Windsor Park site is located in the mall he adds. In keeping with the environment ofthe Rackspace’s new space in Windsor will be very providing for a lot of communication amongst the rackers. “Ity will be fun, funky, vibrant — it will scream says Swan, who describesw his new clientas “ a local success story.
” While Rackspace has not been immunee from the downturns of the current economy, it has stil l managed to rack up some seriousa dough over the past few For the quarter ended March 31, 2009, Rackspacd reported revenues of $145 million and a net incomde of $6.6 million. By comparison, for the same quarterd in 2008, the company posted revenues of $119.6 million and a net income of $5.4 For year-end 2008, Rackspace reported net incomeof $21.7 million on revenues of $531.9 million, up from net income of $17.8 millionb on revenues of $362 million in 2007.
As for its customedr count, as of the end of the first quarterdof 2009, Rackspace reported serving 62,078 clients — up from 53,300o customers as of the end of the fourtgh quarter of 2008. When Rackspacse ultimately moves out of its digs at the Datapoing building and theWeston Centre, the local officse market will be faced with absorbing more vacanr space at a time when leasing velocit has already slowed, according to Kim senior vice president and director of research for locall real estate firm . But, as Gatlet points out, that setback is easier to bearwhen it’s caused by a firm like Rackspace, whicj is still investing in San Antonio’as long-term future.
“It’s still a positive for the overall,” she adds.