I don't get why Google and others are not going out of the valley to nearby cities like Sacramento? The difference in property acquisition is probably pocket change to the company, but I reckon the quality of life to the Googlers, Facebookers etc would be vastly different.
Why stop there though? Why not open up shop near a university town with a low cost of living? Steady supply of interns, new hires, R&D partnerships, etc. Culture in a university town, while not on par with a major city, is generally quite well too.
I'm an Xoogler, and before I quit last summer, our group had been slated to move from the main Mountain View campus to the new "Tech Corners" campus in Sunnyvale[1].
Before Google, I'd worked remote for 15 years, and am working remote again now. About the only thing that made working in the open-office environment tolerable was the feeling of being in the main campus where things were happening. Collaborating with other groups was a 5-10 minute walk or bike ride, rather than a hangout. I went nearly every week to TGIF in Charlies, and I went to a lot of the author talks, and to one off events (like internal job fairs, the MK fair before they got rid of it, GoogleWeen, etc), and use the urgent care clinic. Not to mention that we had zillions of cafes and food trucks to choose from, multiple gyms, multiple TechStops, etc.
Once you're all the way in Sunnyvale, in-person meetings become much more difficult, and the amenities like I mentioned above drop away. At that point, you might as well be in some lower-cost area with cheaper housing and a better commute. Or working remotely :)
[1]The new building was a new-style REWS abomination with impressive public spaces to walk through on the way to totally open offices with no cube walls (as opposed to the 4' walls around the 12 person cubes in the building I was in). So there was a lot of resistance in my group..
The opinions stated here are my own, not necessarily those of Google.
Google has offices all over the country, everyone just focuses on MTV as it's the biggest. In the US there are already large offices in Seattle, NYC, and Chicago. They are also expanding in other cities. Boulder CO is building a new building that can house up to 1500 people. In Austin, TX they are leasing 200,000sqft of office space downtown.
There are definite advantages to having all your people on the same project be in the same area. Remote offices are nice and all to attract talent that doesn't want to be in the Bay area, but there are downsides about distributed teams.
How many of their employees would like to move to Sacramento? While I'm sure the number is not zero, I doubt it's big enough to warrant doing such a thing.
Except that after those ten years, the value of the property will exceed $0. In fact it's rather likely to be worth more then than now, so it's actually an investment.
As Tony Soprano said, "buy real estate cus God ain't making any more". Demand is pretty certain to outstrip supply from here on out.
It is more typical (in the US) for real-estate to be amortized over 30 years. The real costs need to account for taxes and maintenance and depreciation: after 30 years the building but not the land is worth $zero and the "loss" can claimed as an expense.
To go even bigger, there's commonly a property tax abatement from local and state governments for large projects and often actual tax credits.
Just for comparison, that would cover PITI for a 15 year mortgage of around $330k. In cheaper parts of the country, like Dallas, that would net you a 4br 2000+ sq foot home on a 1/2 acre in an affluent suburb.
Sounds around London prices to me where things are just as ridiculous. My wife and I moved back to our hometown recently mostly to get away from that and now pay less than half that for a three bedroom house. Being able to do that makes me ludicrously thankful for us both being able to work remotely 90% of the time.
I don't understand why people do this. I'm paying $1000/month to own a 2 bedroom house with a huge garden. I built my own office at the end of the garden, which I can guarantee you is several times bigger and more comfortable than a work cube. I work remotely for a major US software company. (My commute is 1 minute if I'm carrying a cup of tea, slightly shorter if not).
Rent near Manhattan in the NYC area is quite bad as well. In Manhattan, a tiny one-bedroom will cost you $3500.In the parts of Queens, Brooklyn and Jersey City that are fairly close (commuting time-wise) to Manhattan, the rents are horrible as well.
One of my friends pays circa $2,600/mo for a one-bedroom in Carrol Gardens. An acquaintance in Long Island City had to move out of a two bedroom apartment in Long Island City, because the landlord increased the rent to $4000/month! Exchange Place (Jersey City), Brooklyn Heights, and Downtown Brooklyn are similarly super-expensive.
You can easily rent a bedroom in an older house or multi-room apartment for around $1000-1200 in Palo Alto, Mountain View, and Sunnyvale though. A few of my coworkers do this.
Great...so our south bay becomes even more ridiculously congested. We need so much better mass transit to accommodate all this growth. Instead of spending billions on a bullet train to Los Angeles, can't we invest that money in better mass transit in the bay area?
That money is (presumably) benefitting the whole state, whereas you're looking to take all that money and just benefitting the small part where you live. Not really fair.
Isn't the real WTF why a cloud company needs to invest a quarter of a billion dollars just to inconvenience 3000 workers with a commute, and narrow their talent pool to the people they can hustle up work-permits for in the US? (Yeah, I know, Google has offices outside the US, too).
I agree, but I feel that I already know the answer. That is the assumption being the best talent is on the peninsula. If you open an office too far south or across the bay, then people from Mountain View upto San Francisco will not come to work for you.
"A second Apple spaceship will be landing in Sunnyvale", October 2015, maybe it has something to do with it, somehow. http://fortune.com/2015/10/02/apple-spaceship-sunnyvale/
"The transaction is another sign—as if you need any more—of Apple’s tremendous expansion, potentially providing enough room for more than 3,000 workers. "
569,000 square feet... 3,000 employees. That's 190 square feet per employee. I know there's waste with hallways, bathrooms, utility closets, etc... But doesn't Google also pack their employees in like sardines?
Isn't a (small) cubicle more like 80 square feet? That'd mean more than half of the space is not-cubicle, right?
Now that I think about it, I'm pretty sure I've worked in 64 square foot cubicles...?
And I had to share a cubicle for a short time when I think I had 80 square feet.
[1]The new building was a new-style REWS abomination with impressive public spaces to walk through on the way to totally open offices with no cube walls (as opposed to the 4' walls around the 12 person cubes in the building I was in). So there was a lot of resistance in my group..
I find it crazy how the big IT companies are still willing to pay almost a million a worker per office (most likely much more if you count running costs), any idea why Google is not hiring more people remotely? I mean, if that's a modern IT company that cares for employees it would be the case, I'd rather make $100k in different state or even country, than pay $5k for rent in the bay...
Secondly, buying a building is (save some closing and renovation costs) a neutral operation on your balance sheet, especially if you're flush with cash. In other words, when you buy a building, it maintains its value.
While it's not a million a worker, I think providing and even promoting remote working can be beneficial overall. I work remotely and it saves money for both me and my company. There's also less stress associated with commuting. Remote work is not for everyone (nor possible for all job functions), but companies and employees should give it more consideration. https://remote.co/10-stats-about-remote-work/
[+] [-] yitchelle|10 years ago|reply
[+] [-] mtbcoder|10 years ago|reply
[+] [-] drewg123|10 years ago|reply
I'm an Xoogler, and before I quit last summer, our group had been slated to move from the main Mountain View campus to the new "Tech Corners" campus in Sunnyvale[1].
Before Google, I'd worked remote for 15 years, and am working remote again now. About the only thing that made working in the open-office environment tolerable was the feeling of being in the main campus where things were happening. Collaborating with other groups was a 5-10 minute walk or bike ride, rather than a hangout. I went nearly every week to TGIF in Charlies, and I went to a lot of the author talks, and to one off events (like internal job fairs, the MK fair before they got rid of it, GoogleWeen, etc), and use the urgent care clinic. Not to mention that we had zillions of cafes and food trucks to choose from, multiple gyms, multiple TechStops, etc.
Once you're all the way in Sunnyvale, in-person meetings become much more difficult, and the amenities like I mentioned above drop away. At that point, you might as well be in some lower-cost area with cheaper housing and a better commute. Or working remotely :)
[1]The new building was a new-style REWS abomination with impressive public spaces to walk through on the way to totally open offices with no cube walls (as opposed to the 4' walls around the 12 person cubes in the building I was in). So there was a lot of resistance in my group..
[+] [-] kyrra|10 years ago|reply
Google has offices all over the country, everyone just focuses on MTV as it's the biggest. In the US there are already large offices in Seattle, NYC, and Chicago. They are also expanding in other cities. Boulder CO is building a new building that can house up to 1500 people. In Austin, TX they are leasing 200,000sqft of office space downtown.
There are definite advantages to having all your people on the same project be in the same area. Remote offices are nice and all to attract talent that doesn't want to be in the Bay area, but there are downsides about distributed teams.
[+] [-] financedfuture|10 years ago|reply
I'm not convinced going out of the Valley would be vital for them.
https://www.google.com/finance?q=NASDAQ:GOOG&fstype=ii
[+] [-] st3v3r|10 years ago|reply
[+] [-] raverbashing|10 years ago|reply
You can have shuttle buses between campuses from when you really need to be in one place, for example
[+] [-] bravura|10 years ago|reply
$250M / 10 yrs / 12 months / 3000 employees = $700 per employee-month
[+] [-] svantana|10 years ago|reply
As Tony Soprano said, "buy real estate cus God ain't making any more". Demand is pretty certain to outstrip supply from here on out.
[+] [-] rebelde|10 years ago|reply
Given that the building can be sold for the same price that they paid:
$250M x 2.3% per year (the going rate for one of Google's bonds) /12 months / 3000 employees == $159.72/month
[+] [-] Matthias247|10 years ago|reply
But in total it would be more, because that price won't Cover Runtime expenses
[+] [-] brudgers|10 years ago|reply
To go even bigger, there's commonly a property tax abatement from local and state governments for large projects and often actual tax credits.
[+] [-] alooPotato|10 years ago|reply
[+] [-] codezero|10 years ago|reply
*not including trash and utilities.
[+] [-] tyingq|10 years ago|reply
[+] [-] jon-wood|10 years ago|reply
[+] [-] rwmj|10 years ago|reply
Edit: picture of the office: http://oirase.annexia.org/office.jpg
[+] [-] winter_blue|10 years ago|reply
One of my friends pays circa $2,600/mo for a one-bedroom in Carrol Gardens. An acquaintance in Long Island City had to move out of a two bedroom apartment in Long Island City, because the landlord increased the rent to $4000/month! Exchange Place (Jersey City), Brooklyn Heights, and Downtown Brooklyn are similarly super-expensive.
[+] [-] perryh2|10 years ago|reply
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[+] [-] yes_or_gnome|10 years ago|reply
[+] [-] kqr2|10 years ago|reply
https://en.wikipedia.org/wiki/San_Francisco_Peninsula
[+] [-] ycosynot|10 years ago|reply
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[+] [-] VikingCoder|10 years ago|reply
Isn't a (small) cubicle more like 80 square feet? That'd mean more than half of the space is not-cubicle, right?
Now that I think about it, I'm pretty sure I've worked in 64 square foot cubicles...?
And I had to share a cubicle for a short time when I think I had 80 square feet.
[+] [-] iofj|10 years ago|reply
[1]The new building was a new-style REWS abomination with impressive public spaces to walk through on the way to totally open offices with no cube walls (as opposed to the 4' walls around the 12 person cubes in the building I was in). So there was a lot of resistance in my group..
[+] [-] xyzzy4|10 years ago|reply
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[+] [-] trm42|10 years ago|reply
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[+] [-] mrfusion|10 years ago|reply
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[+] [-] roel_v|10 years ago|reply
Secondly, buying a building is (save some closing and renovation costs) a neutral operation on your balance sheet, especially if you're flush with cash. In other words, when you buy a building, it maintains its value.
[+] [-] cybette|10 years ago|reply