In Defense of the Urban Freeway

[The North One]

Originally Posted by JManc

Google, Apple, Facebook also could have relocated to SF and/or SJ if they wanted to but they obviously prefer their current location(s). Amazon is really the only tech giant that I know of with an urban presence. Even Microsoft is in suburban Seattle.

Probably because there's absolutely no room in San Francisco for the office space they need. Apple has a cult-like loyalty to Cupertino, I don't think it's because they think it's a disadvantage to be downtown or a reflection of trends they would just never be anywhere else. Kind of like how Ford is loyal to Dearborn. San Jose is essentially just another suburb, it would be a zero sum move.

[JManc]

^ probably. I went to grad school with several people who wound up in Mountain View and it appears to me that the type of innovation and culture diverges somewhat between SV and SF.

Originally Posted by mhays

Really, what planet are you living on. In any city with a good downtown and transit, locating downtown is an advantage for staff recruitment and retainage as well as the need for proximity in some fields.

Further, every downtown has smaller buildings along its periphery.

Hold the snark. Apple, Google and so on may have offices in downtown Seattle but that's Seattle, those companies in turn have suburban campuses in Austin which has as much of a young educated and high tech work force as Seattle. Microsoft has an office building in suburban Houston next door to BMG Software and a handful of other tech companies. They go where the people are. In Seattle and Chicago, it's obviously right in town, in Houston and Austin, it's further out.

[Crawford]

Originally Posted by The North One

Probably because there's absolutely no room in San Francisco for the office space they need.

Of course there's room. If a company wants to move to a city, there's nothing stopping them. What would stop Apple or Google from moving to SF? Google has like 3 million square feet in two blocks in Manhattan; it can be done.

The fact that something like 19 of the 20 largest Bay Area tech firms are in traditional Silicon Valley rather than downtown SF indicates that, at least for now, tech generally still prefers sprawl.

[Crawford]

Originally Posted by Steely Dan

^ It sounds like metro houston and chicagoland are on radically divergent trajectories as far as the geography of white collar employment goes.

Chicagoland is quite an outlier. I don't think you can extrapolate Chicagoland trends nationally.

Chicago is the dominant Midwest city, which is filled with all kinds of blue-collar corporations in podunk places like Fort Wayne and Peoria. As the upper ranks of these firms has internationalized, these communities have become severe liabilities for recruiting. That's why basically every firm in the Midwest (excepting maybe Minneapolis and Detroit, which have decent corporate bases and sizable international communities) has put executives in Chicago.

The Midwest is not an appealing place for young and/or international talent. Chicago (and really only core Chicago) is the only place in the Midwest where you aren't going to be at a severe recruiting advantage. Other areas don't have this issue. Apple has no problems drawing people to Cupertino, Johnson&Johnson has no problems drawing people to Central NJ, but McDonalds probably has an issue in recruiting to Oakbrook, IL.

Chicago also had a ton of empty office space downtown, tends to have lots of newer, affordable office product, and tends to be very aggressive recruiters. I don't doubt they have repeatedly targeted every major manufacturer and food corporation within a 500 mile radius.

[M II A II R II K]

Perhaps the downtown tax base is too high to not appeal to more corporations moving there.

[mhays]

Originally Posted by Crawford

Of course there's room. If a company wants to move to a city, there's nothing stopping them. What would stop Apple or Google from moving to SF? Google has like 3 million square feet in two blocks in Manhattan; it can be done.

Wrong. San Francisco has caps on office space that would have to be repealed. The caps are really low. Additionally, the public can turn a project down by voter initiative.

[mhays]

Originally Posted by JManc

Hold the snark. Apple, Google and so on may have offices in downtown Seattle but that's Seattle, those companies in turn have suburban campuses in Austin which has as much of a young educated and high tech work force as Seattle. Microsoft has an office building in suburban Houston next door to BMG Software and a handful of other tech companies. They go where the people are. In Seattle and Chicago, it's obviously right in town, in Houston and Austin, it's further out.

Like I said, in the places with good downtowns and transit...

You keep making blanket statements that are wrong for a large percentage of urban America.

[Crawford]

Originally Posted by mhays

Wrong. San Francisco has caps on office space that would have to be repealed. The caps are really low. Additionally, the public can turn a project down by voter initiative.

Why was my statement "wrong"? Nothing you wrote contradicted what I wrote.

Again, why can't Apple move to SF? Why would a "cap on office space" stop Apple from moving there? You think they can't buy an existing building or lease existing space?

Prime SF generally has lower rents and more available space than prime Silicon Valley. I'm pretty sure Apple could afford to house their executives on the moon if they wanted to.

[prelude91]

Originally Posted by JManc

Amazon is really the only tech giant that I know of with an urban presence. Even Microsoft is in suburban Seattle.

Google has massive urban offices in Chicago and NYC
Salesforce has urban offices in San Fran, Chicago, NYC
LinkedIn has a huge presence in San Fran, Chicago, NYC
Oracle has a massive presence in Downtown Chicago and in NYC

There are tons of other examples, this is just off the top of my head....

[austlar1]

Originally Posted by JManc

^ probably. I went to grad school with several people who wound up in Mountain View and it appears to me that the type of innovation and culture diverges somewhat between SV and SF.



Hold the snark. Apple, Google and so on may have offices in downtown Seattle but that's Seattle, those companies in turn have suburban campuses in Austin which has as much of a young educated and high tech work force as Seattle. Microsoft has an office building in suburban Houston next door to BMG Software and a handful of other tech companies. They go where the people are. In Seattle and Chicago, it's obviously right in town, in Houston and Austin, it's further out.

For what it's worth, Google/Austin is fixing to move into 200,000 sq. ft. of a new downtown Austin office building. The building is nearing completion and Google is making major changes to the space it has leased there. Locals are calling this building the Google Tower. It is not much of a tower (just under 400 feet), but it is a high rise in downtown Austin.

Nearby on Town Lake (aka Ladybird Lake) just east of downtown, Oracle is building a sprawling five or six story suburban style building replete with adjacent parking structures to house an estimated 3,000 workers. The surrounding area is rapidly being rebuilt with five or six story Texas doughnut (parking in the center) apartment structures. This development could be considered downtown adjacent and offers many of the same amenities that workers might find downtown. Apple, Samsung, Dell, IBM, Cisco, AMD, Intel, and other tech players mostly continue to operate in suburban office park or industrial park settings, while lots of smaller software developers like to operate from downtown.

[Crawford]

Originally Posted by prelude91

Google has massive urban offices in Chicago and NYC
Salesforce has urban offices in San Fran, Chicago, NYC
LinkedIn has a huge presence in San Fran, Chicago, NYC
Oracle has a massive presence in Downtown Chicago and in NYC

There are tons of other examples, this is just off the top of my head....

We're talking office HQ, no? There are very few major tech HQ in CBDs.

Yes, the satellite offices are often in urban areas, because they have different functions, usually. They're often very heavy ad sales, and need to be around buyers. Even Google's Detroit office is in a very urban, walkable CBD.

[prelude91]

Originally Posted by Crawford

We're talking office HQ, no? There are very few major tech HQ in CBDs.

Yes, the satellite offices are often in urban areas, because they have different functions, usually. They're often very heavy ad sales, and need to be around buyers. Even Google's Detroit office is in a very urban, walkable CBD.

I didn't pick up on the HQ piece, but how is that relevant? I work for Oracle out of Chicago and virtually none of the CHicago office is dependent on HQ. I know it's the same at Salesforce (where Chicago is their 2nd largest hub after SF). For major enterprise tech companies, the HQ doesn't really matter, leadership rarely is based in one hub, and each hub really runs as a sub company, at least in my experience.

[JManc]

Originally Posted by austlar1

For what it's worth, Google/Austin is fixing to move into 200,000 sq. ft. of a new downtown Austin office building. The building is nearing completion and Google is making major changes to the space it has leased there. Locals are calling this building the Google Tower. It is not much of a tower (just under 400 feet), but it is a high rise in downtown Austin.

Nearby on Town Lake (aka Ladybird Lake) just east of downtown, Oracle is building a sprawling five or six story suburban style building replete with adjacent parking structures to house an estimated 3,000 workers. The surrounding area is rapidly being rebuilt with five or six story Texas doughnut (parking in the center) apartment structures. This development could be considered downtown adjacent and offers many of the same amenities that workers might find downtown. Apple, Samsung, Dell, IBM, Cisco, AMD, Intel, and other tech players mostly continue to operate in suburban office park or industrial park settings, while lots of smaller software developers like to operate from downtown.

If that's the area where the Hyatt is (btwn 1st and Congress), I'd definitely consider it at least an extension of downtown.

EDIT: No, I just looked. Confused with ladybird park...that area does seem rather suburban.

[mhays]

Originally Posted by Crawford

Why was my statement "wrong"? Nothing you wrote contradicted what I wrote.

Again, why can't Apple move to SF? Why would a "cap on office space" stop Apple from moving there? You think they can't buy an existing building or lease existing space?

Prime SF generally has lower rents and more available space than prime Silicon Valley. I'm pretty sure Apple could afford to house their executives on the moon if they wanted to.

If the answer is that they could rent millions of square feet in a patchwork throughout a large area by vastly overpaying vs. market rents so landlords kick other tenants out, picking up leases as they become available over several years, then sure.

By the same logic, any zillionnaire can live in your house if they want, because you or your landlord have a price. They can also buy numerous houses so they can collectively have 30,000 square feet.

[mhays]

Originally Posted by Crawford

We're talking office HQ, no? There are very few major tech HQ in CBDs.

Yes, the satellite offices are often in urban areas, because they have different functions, usually. They're often very heavy ad sales, and need to be around buyers. Even Google's Detroit office is in a very urban, walkable CBD.

Most of Seattle's litany of tech firms is engineering offices. Generally the top downtowns get the high-value positions. The point is to attract the best and brightest.

[Crawford]

Originally Posted by prelude91

I didn't pick up on the HQ piece, but how is that relevant?

Not only is it relevant, it's basically all that matters. We're talking about where tech companies put the head office. Why does it matter where Tech Company X puts its Milwaukee ad sales team?

Originally Posted by prelude91

I work for Oracle out of Chicago and virtually none of the CHicago office is dependent on HQ. I know it's the same at Salesforce (where Chicago is their 2nd largest hub after SF). For major enterprise tech companies, the HQ doesn't really matter, leadership rarely is based in one hub, and each hub really runs as a sub company, at least in my experience.

Sorry, don't buy it. This is probably the first time on SSP I've heard anyone claim that HQ location decisionmaking is irrelevant to executive location preferences.

[Crawford]

Originally Posted by mhays

If the answer is that they could rent millions of square feet in a patchwork throughout a large area by vastly overpaying vs. market rents so landlords kick other tenants out, picking up leases as they become available over several years, then sure.

By the same logic, any zillionnaire can live in your house if they want, because you or your landlord have a price. They can also buy numerous houses so they can collectively have 30,000 square feet.

Absolutely. Nothing is stopping Apple from moving to downtown SF.

It wouldn't be difficult to buy buildings or lease space over time, especially for a firm with Apple's vast, almost obscene, cash reserves.

[austlar1]

Originally Posted by JManc

If that's the area where the Hyatt is (btwn 1st and Congress), I'd definitely consider it at least an extension of downtown.

EDIT: No, I just looked. Confused with ladybird park...that area does seem rather suburban.

The new Oracle campus in Austin is suburban in appearance, albeit compact in terms of acreage. It is linked directly to the existing city street grid and directly adjacent to Austin's most popular outdoor recreation venue, the hike, bike, and jogging trail around Town Lake. The new apartment buildings nearby tend to have ground floor retail. Downtown is about one mile by car, bike, or bus. It is an interesting (and probably one off) development for Austin that certainly will help to densify the lakefront area east of 35. I expect some highrise apartment towers to start to pop up in that area in the next decade. Also, it is directly between downtown and the airport, so a miracle might come to pass and light rail or a street car may show up in that area sooner than later. Oracle wanted this location because they felt it would appeal to the type of employee they hope to attract here in Austin. Not surprisingly there was some NIMBY opposition mostly from affordable housing advocates who bemoaned the demolition of hundreds of cheap 1960s era two story apartment units to make way for construction. The city council rolled over for Oracle. It was probably a very wise choice.

[cabasse]

Originally Posted by Crawford

We're talking office HQ, no? There are very few major tech HQ in CBDs.

Yes, the satellite offices are often in urban areas, because they have different functions, usually. They're often very heavy ad sales, and need to be around buyers. Even Google's Detroit office is in a very urban, walkable CBD.

in midtown atl, all in the past year or two:

NCR is moving their hq to 485k+240k sq ft buildings under construction - consolidating all employees from the burbs and other offices out of state - 6-7k employees

honeywell opening up software dev center in midtown, taking 62k in existing building

equifax adding 100k square feet/650 employees in existing building (4 floors in one atlantic center) - fintech related jobs

GE picked midtown atlanta for IT hq - 400 employees

sage (british biz mgmt software company) moving 400 employees to midtown

salesloft moving from tech village in buckhead to midtown - 300 jobs

this one's from 3 years ago - worldpay moves 671 employees/HQ to atlantic station

ga tech is currently constructing a 750k sq ft collaborative office building oriented around tech, with a massive datacenter at its base. coda

i'm being brief, but i think that's a fairly decent bit of evidence showing where the trends are going here. hell, there's discussion around my own company of relocating to midtown when the lease on our current building ends...

[prelude91]

Originally Posted by Crawford

Not only is it relevant, it's basically all that matters. We're talking about where tech companies put the head office. Why does it matter where Tech Company X puts its Milwaukee ad sales team?


Sorry, don't buy it. This is probably the first time on SSP I've heard anyone claim that HQ location decisionmaking is irrelevant to executive location preferences.

Your lack of how enterprise technology companies are run is glaring (Ad Sales?! come on...). I'll give you examples of 3 companies i'm intimately familiar with:

Salesforce: Yes, Marc Benioff is the CEO and is based in SF, but the people there who are really running the day to day of that business, Keith Block, President/COO (based in Boston) and Tony Fernicola, Head of Global Sales (Based in NYC) are not based at HQ, and business decisions are not coming from someone physically sitting in their corporate office.

Oracle: Again, Mark Hurd may be based in the Bay Area, but most of the business is run by the different vertical leads, only a handful of which are based in the Bay Area. The SVP of my org (who leads 7000 employees) is based in Reston, VA. Of the 7 or so orgs within Oracle NA, only 1 is based in Redwood City.

LinkedIn: While HQ'd in Mountain View, the guy running the day to day (Mike Gamson) is based in Chicago, 3 of his direct reports are in Chicago as well. Their San Fran office (NOT Mountain View) has much of their other leadership.

These are just 3 examples; it's 2017 many people don't need to be geographically located in a specific office, even those leading multi billion dollar companies.