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Schwab Leaves San Francisco for Texas

216 points| undefined1 | 6 years ago |wsj.com | reply

309 comments

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[+] jonas21|6 years ago|reply
This is part of Schwab's merger with TD Ameritrade. Relevant bits from Schwab's FAQ [1]:

Q: Where will the combined company be headquartered?

A: As part of the integration process, the corporate headquarters of the combined companies will eventually relocate to Schwab’s new campus in Westlake, Texas. Both companies have a sizable presence in the Dallas-Fort Worth area. This will allow the firm to take advantage of the central location of Schwab’s new campus as the hub of a network of Schwab branches and operations centers that span the entire U.S., and beyond.

Q: What does the headquarters move mean for the future of Schwab’s presence in San Francisco?

A: Schwab was founded in San Francisco and has maintained a longstanding commitment to the Bay Area, which will continue. A small percentage of roles may move to Westlake over time, either through relocation or attrition. The vast majority of San Francisco-based roles, however, are not anticipated to be impacted by this decision. Schwab expects to continue hiring in San Francisco and retain a sizable corporate footprint in the city. Any additional real estate decisions will be made as part of the integration process, over time.

[1] https://www.aboutschwab.com/announcement

[+] crwalker|6 years ago|reply
As a San Franciscan, I am so happy to see this. SF needs negative feedback on the poor choices it makes, and so far the tech boom has somewhat obscured the consequences.
[+] Reedx|6 years ago|reply
Yeah. The longer you live in SF and the Bay Area, the more apparent it becomes how much it skates on tech, history, and intrinsic advantages like the weather and beautiful geography. SF in particular has such incredible resources that it should be the most advanced city in the world.
[+] fourstar|6 years ago|reply
The negative feedback is all the people who moved from other states to SF over the years, voted for politicians that virtue signaled loudly enough to attract said transplants’ votes, and then moved to another (likely conservative) state after saving enough money to live comfortably with their new families. That’s ultimately one of the biggest issues in the Bay Area that no one ever talks about.
[+] seanmccann|6 years ago|reply
> The company said Monday that “a small percentage of roles may move from San Francisco to Westlake over time, either through relocation or attrition. The vast majority of San Francisco-based roles, however, are not anticipated to be impacted by this decision. Schwab expects to continue hiring in San Francisco and retain a sizable corporate footprint in the city.”

Doesn't sound like they are leaving San Francisco, just building a new office in Texas (suburb north of Fort Worth).

[+] hourislate|6 years ago|reply
From what I have read in the Local News, it is just the first phase. I am assuming they will eventually move entirely but don't want to spook their existing workforce in SF.
[+] hkmurakami|6 years ago|reply
They're moving HQ and refraining from growing headcount here in the future
[+] newguy1234|6 years ago|reply
That's what they always say but overtime they "integrate" more of the operations to the new headquarters and then eventually they want everyone under the same roof.
[+] skybrian|6 years ago|reply
This is better both for San Francisco and Texas, from a load-balancing perspective. Unless housing can catch up, large companies shouldn't be expanding in San Francisco.
[+] hourislate|6 years ago|reply
For anyone interested here is the build out of their HQ on the Circle T Ranch (Hunt Brothers owned it once) then Perot Jr bought it about 25 years ago and is turning into a financial hub. Fidelity is there along with Deloitte and TD Ameritrade just built a brand new complex about 1 mile away.

https://goo.gl/maps/whA2nM9YYGka55P5A

Schwab owns the whole corner there with plenty of room to expand, the Circle T Ranch is around 2500 acres.

[+] pjg|6 years ago|reply
Am I the only one who thinks nobody is talking about the elephant in the room ? i.e. the cause and effect. Fintech companies like Robinhood have popularized the concept of (a) zero fee trading and (b) better UI/UX and just better service/offering on highly scalable platforms that allow them to introduce new products/services, which are virtually impossible for legacy providers like Schwab. Seems like that is the single most important cause of Schwab and TDAmeritrade merger. Much like ~15 years ago when "Internet" based trading companies forced the traditional "phone calling" brokers to either merge with Internet upstarts or go out of business. Schwab survived the first wave of disruption as it aggressively embraced into Internet based trading. There was a wave of consolidation with other purely online trading companies e.g. Datek, Scottrade etc. merged into what is now TDAmeritrade.

Seems like the traditionals haven't been able to survive the second wave of disruption. This is what is prompting the merger i.e. if you can't grow like the fintechs then cut costs using merger cost synergies. A side effect of this is move from extremely high cost locales to lower cost ones. It's PR couched in terms like "Any additional real estate decisions will be made as part of the integration process, over time."

Good for San Fran and the bay area, it seems. Some prime corporate space being vacated should take a little pressure off real-estate prices (I hope).

[+] aloknnikhil|6 years ago|reply
https://www.schwab.com/public/schwab/active_trader

I don't think Robinhood can even compare to the tools offered by Schwab's brokerage accounts. It's like r/wallstreetbets vs r/investing

I do agree that Robinhood was the first to make trading accessible to the masses and pushed for zero-fee trading.

[+] Areading314|6 years ago|reply
Will be interested to see robinhoods "financials" when they finally release them. It's likely their business model is of the "give free stuff away and raise more funding" variety.
[+] irq11|6 years ago|reply
Schwab has a great website, and has for a lot longer than Robinhood has been a thing. Also, they stopped charging commissions on trades as well.

Schwab is pretty great. If your only frame of reference is Robinhood, you should really look into it.

[+] JumpCrisscross|6 years ago|reply
> the traditionals haven't been able to survive the second wave of disruption

Pretty much all major American brokerages now offer zero-commission equities trading. It’s been a long time since retail equities traders depended on commissions to butter its bread.

This merger was driven, in part, by the greater fraction of revenues commissions represented ex ante for Ameritrade versus Schwab.

[+] droopyEyelids|6 years ago|reply
Keep in mind it's not a technological wave of disruption this time, but a round of venture backed growth companies that compete for users, but do not need to make a profit.
[+] spectramax|6 years ago|reply
I just moved to the Bay Area and I have no good opinions about living here. It’s a 3 trillion dollar neighborhood that has broken infrastructure, an abysmal housing situation, crime through the roof, homeless people everywhere, traffic, outrageous costs and just generally an awful place to live. I don’t know about the business side, but from an employee standpoint, fuck the Bay Area. Oh, and my car got broken into twice, and someone asshat stole my license plates.
[+] unlinked_dll|6 years ago|reply
I mean the peninsula is mostly a dump but even historically “bad” neighborhoods like Richmond and Oakland are miles away from where they were 10-20 years ago. The East Bay and Silicon Valley proper are downright decent places to live.
[+] hkmurakami|6 years ago|reply
Sounds like you live in SF rather than other areas of the bay. The bay has micro markets like its micro climates.

Also, the bay has good jobs, so there's that. I mean that's probably why you moved here?

[+] Mountain_Skies|6 years ago|reply
If the exodus goes from a trickle to a torrent, the city budget propped up by property taxes is going to crater. Whatever problems there are now with homelessness, imagine what it will be like when social services can no longer be provided for them. San Francisco is a ship that lost power to its engines while coasting towards an iceberg.
[+] demosthenes14|6 years ago|reply
Sometimes I wonder if there’s a funded campaign against the Bay Area online. Where do you live, and where did you come from? I just moved to SF and yes it has homeless people, traffic and is extremely expensive, but these are things that every other big city I’ve lived in has. The costs and homelessness are worse than Seattle or NYC but not to the point that it’s a reduction in my quality of life. To say you have “no good opinions” is so extreme. The area is beautiful, has a rich history, amazing culture, food and art, and if you work in technology has the best availability of jobs in the world.
[+] BooneJS|6 years ago|reply
I left the Bay Area a few months ago. We didn’t even last 2 years. Structure your rent accordingly. :)
[+] drivebycomment|6 years ago|reply
Then why are you here? For your own sake, please leave if you are so unhappy.
[+] driverdan|6 years ago|reply
Why did you move there? Tech exists outside the bay.
[+] scurvy|6 years ago|reply
Crime through the roof? People who live in actual high crime areas would like a word with you.

It sounds like you've experienced more than your fair share of crime since moving to the BA, but calling it high crime is beyond a stretch.

[+] gojomo|6 years ago|reply
Once upon a time, "Go West, young man" was advice for "growing with the country": https://en.wikipedia.org/wiki/Go_West,_young_man

Now with California's anti-housing, anti-commerce policies & government deeply captured by incumbent interests, better advice may be:

"Go East, growing company."

[+] jakozaur|6 years ago|reply
SF Bay Area gets so expensive that even financial giants gets gentrified.
[+] nthomas|6 years ago|reply
Welcome to the Lone Star State! Cheap real estate and friendly folks. And BBQ, metric tons of BBQ...
[+] CydeWeys|6 years ago|reply
And traffic out the wazoo, and few good alternatives to driving.
[+] driverdan|6 years ago|reply
Westlake does not have cheap real estate.
[+] aphextron|6 years ago|reply
>"Cheap real estate"

And the highest property tax rate in the nation.

[+] jimmaswell|6 years ago|reply
Friendly if you're the right political party and orientation, I hear.
[+] dmode|6 years ago|reply
Companies move. HQ move all the time. This is a leverage that corporations employ to maximize tax gains all the time. Don't know why it always makes some sort of headline. Schwab and its leadership has been saying how they hate California for a long time. So not surprising. And any HQ move out of CA is often dressed as a political success story of a low tax state. Weirdly, I would never see a story that says "$1 trillion worth of new wealth created in CA, zero in Texas". I mean, this last year alone, with IPOs of Uber, Lyft, Pinterest, Slack etc. we probably had $200bn worth of wealth generated. Now taking into account the stock price inflation of Google, Apple, Facebook over the last decade, and not to forget Tesla, Netflix, Nvidia etc. Nobody ever uses those gains to comment on why a high tax state was able to generate this much new business and wealth. Over the last decade, CA companies have generated 50% of all VC capital in the US and Texas companies have generated <5%.
[+] austincheney|6 years ago|reply
For some added perspective. Schwab already had several buildings in Westlake before building the new campus, which is still under construction. TD Ameritrade used to have a building in Westlake as well, but I think they gave that up when they built their new campus in Southlake, about 3-5 miles away, a couple years ago.

That is a huge finance footprint in one area. Consider also that one of Fidelity's largest corporate campus is also located in Westlake. Westlake is a tiny dot on the map with less than a 1000 people.

https://en.wikipedia.org/wiki/Westlake%2C_Texas

New Headquarters: https://www.google.com/maps/@32.9933674,-97.2120872,724m/dat...

Ameritrade campus: https://www.google.com/maps/@32.9774174,-97.1618883,512m/dat...

Fidelity campus: https://www.google.com/maps/@32.9828451,-97.1885764,609m/dat...

Also, the Deloitte campsus right new door is amazing. Its a 5 star hotel only available for visiting Deloitte employees under going management training and the food there is chef prepared and free to employees. I used to have a subordinate in my part-time side job that worked there as a corporate purchasing analyst.

For extreme shits and giggles look at the houses in Westlake either on a map or in something like Zillow. While I understand a $3 million house around San Fransisco is about 200sqft its quite a bit of purchasing power in Texas.

[+] mikece|6 years ago|reply
To where in Texas are they moving? The non-paid version of the WSJ article doesn’t say. I keep hearing that in massive influx of tech companies to the Austin area has driven up housing rates and congestion to absurd levels. Probably won’t be long before tech companies skip Austin for cities like Dallas, Houston, and San Antonio.
[+] xyst|6 years ago|reply
Companies won’t skip out on Austin. They would be missing out on top tier talent from UT and surrounding schools.

Reason why Schwab is moving to Dallas (specifically Westlake) is because this is determined to be the next financial district (a majority of financial companies have satellite corporate offices in this specific area)

FYI: Schwab has had an existence in the 512 for some years now and in the recent years expanded/consolidated to a new office

[+] slater|6 years ago|reply
"The brokerage giant heads for a state that doesn’t punish finance"

opinion, indeed!

[+] scurvy|6 years ago|reply
Square is still in SF.....for now.

Stripe left/is leaving.

[+] dbrowne|6 years ago|reply
And who would want to live in some podunk town? Top talent live and work in destination cities.
[+] rb808|6 years ago|reply
I heard they have water and electricity out there.