(Oregonian (Portland, OR) Via Acquire Media NewsEdge) March 05--Puppet Labs, among the biggest and fastest growing in Portland's new generation of software businesses, has leased two floors of a big downtown office building -- giving the young company the space to expand into a major enterprise.
The new site has room to accommodate as many as 500 employees, more than double the number working in Puppet's current headquarters in the Pearl District. And Puppet has an option to lease additional space in the building if it grows beyond that.
Puppet plans a November move to its new, 75,000-square foot offices in the Block 300 building, just north of the Morrison Bridge. This will be the company's fifth headquarters since founder and chief executive Luke Kanies moved the company here from Nashville in 2009.
Puppet, whose open source software facilitates data center management, quickly outgrew all its prior homes. With the new lease, Kanies said Puppet expects to shed its wanderlust.
"We've gotten to the point where we can get into a space to grow into," Kanies said.
Block 300, formerly the Robert Duncan Plaza, has housed a series of federal agencies since it opened in 1991. About half of those tenants have just moved to the overhauled Edith Green-Wendell Wyatt Federal Building, creating 175,000 square feet of space -- the largest contiguous block of space to open downtown in a year.
The building's owner, real estate investment firm Kaufman Jacobs, said Puppet's move represents a "vote of confidence" in Block 300's ongoing renovation.
Craig Reinhart of Cresa Portland, which represented Puppet in the deal, said that the building's owner has approved putting Puppet's logo atop Block 300 -- pending city approval.
The city has a rigorous permitting process for building logos, but other Portland tech companies -- Urban Airship and Elemental Technologies among them -- have overcome those hurdles.
Oregon's tech revival has sent landlords across the city scurrying to make their properties more attractive to young companies whose employees are after decidedly different workplaces than the government workers and professional services firms they're supplanting.
Puppet and other tech employers say their staffers are less interested in fine dining and parking spaces than proximity to food carts and public transit. Website analyst New Relic sealed its decision to move into the staid U.S. Bancorp Tower after the landlord gave its workers permission to bring their bikes up in the freight elevator.
Increasingly, Portland startups are outgrowing the Pearl District lofts and converted warehouses where they incubated. In January, Jama Software announced plans to move more than 100 employees spread across two offices in the Pearl into 35,000 square feet downtown, in the former Bally's Total Fitness site.
In Puppet's case, Kanies said, the company liked Block 300's proximity to the waterfront, just two blocks away, and that the landlords offered his company the ability to configure its space.
Puppet will have an interior stairway connecting the fifth and sixth floors, and is working with Thomas Hacker Architects to design an open floor that encourages collaboration but contains sound, with a central meeting area that matches the big dining room in Puppet's current offices.
"It's really kind of the beating heart of the company," Kanies said, "so that's going to be a major focus."
Puppet Labs is little known beyond the information technology industry, but within that sector it's rapidly becoming into an essential player. It enables individual technical managers, or large departments, to oversee data networks -- adding new tools and scaling up as the networks grow.
Puppet's investors include VMware, Google Ventures, Cisco Systems and blue-chip venture capital firm Kleiner Perkins Caufield & Byers. Clients include Bank of America, Intel, NASA, Rackspace, Salesforce.com and Starbucks. Last fall, the company hired veteran Microsoft executive Bill Koefoed to be its chief financial officer.
While Kanies wouldn't say how long Puppet's new lease runs -- "It's a long-term commitment" -- he said it reflects his ambition to turn the company into a major player in business software, and to keep Puppet and its employees in Portland.
Among Portland's half-dozen most promising entrepreneurial tech firms, Puppet has emerged in the past year as perhaps the brightest prospect -- judging by rapid growth that's continued unabated since last year's funding round. The market for data network management tools is exploding, and licenses for Puppet's commercial products grew 140 percent last year.
Still, all manner of events -- from a strategic stumble to a sudden takeover -- can interrupt the trajectory of a buoyant young company. And Kanies said every business decision, including the pending move, comes with risks and returns. The new office, though, is a step forward in a long-term plan.
"My goal is to build a great, independent company," he said.
Puppet Labs' locations (click on red markers icons)
Mark Graves, The Oregonian
Oregonian reporter Elliot Njus contributed to this article.
Correction: The identity of the architects working on Puppet's new office has been corrected.
-- Mike Rogoway; twitter: @rogoway; phone: 503-294-7699
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