To the folks who think this is some kind of rejection of remote work: even in a remote work era, having physical offices in cities makes a ton of sense so long as large numbers of people want to live there.
In a city like New York, living day to day life across many physical spaces is a core part the experience. In fact it's one of the major draws. The park is your front lawn, the cafe your breakfast nook, the theater your living room, and the office is... your office.
Remote work is great and all if that's not the lifestyle you want, and I think the pandemic has perhaps shown that many were living this lifestyle who didn't want it (especially if you were living the quasi-bedroom-city life of SFBay where you slept in SF but commuted out of the city daily for work), but Google embracing the deeply social and physically connected lifestyle of a functional city like New York isn't really a rejection of remote work being viable-- it's just accepting that to many, this type of city life is preferable and having a physical space to do your work provided by your employer is part of what makes that so.
Only some 7 years ago, this very area was targeted to be the heart of a new stadium development for the Major League Soccer. It was going to be the West Village home....for NYC FC soccer franchise
It made sense: Pier40 city park, across the street from 550 washington St, was basically a decreipt property stuck in time as was the rest of the neighborhood. Then hurricane Sandy hit. The damage closed the Pier40 building for almost half a year. Some support did arrive from Sandy hurricane aid, which ironically did more to help the building than any other city park initiative.
Post-Sandy, Pier 40 park seemed destined to stumble along.
Then came the MSL. They were convinced they could sell the idea to the site: redevelop moribund Pier40 and 550 Washington St next to it. Everyone seemed excited.
However, they did not count on a surprise rival: parents of the little league baseball kids that regularly play at Pier40 turf fields (as does DUSC soccer kids). They protested. Loudly. Some of them likely well connected.
The project then died and moved elsewhere.
Now, some of those parents live in the area. They are now looking to benefit enormously from this Google development.
And it's probably a good investment since cash is cheap right now and cities like NYC are depressed thanks to COVID-19.
I hate cities but have to think that they're good investments. Global warming will likely change the economics of suburbs and people are having a lot less kids, making cities less unattractive.
Makes sense. If you insist on living in NYC for any reason, then going into the office is probably more comfortable than living (and working) in a cramped NYC apartment.
Though it's pretty ironic that virtually all of the software Google uses and creates facilitates virtual work, yet they insist on an in-person setting.
In my experience, I know a load of people who live and work in NYC and they almost universally prefer working from home. One guy lives in a dump due to his own misfortune and he spends a lot of time in the office but everyone else is perfectly content at their personal desk. I used to have a ten minute walk to work and still wouldn't do it unless I absolutely had to.
For anyone unfamiliar, Google also bought another building in Manhattan for $2.4B five years ago.[0] Seems to have worked out for them so far. I would caution against reading too much into this move.
Edit: updated to clarify this was some building in Manhattan. My original post was confused with another purchase (probably their purchase of the Port Authority building).
Seems like a ballsy investment in office space considering we're at the height of a real estate bubble during a massive cultural shift towards remote work.
All my questions are about tech infrastructure. Does the location of this property have anything to do with proximity to NYC's internet exchange points? Will this building need that kind of access? If so, why? Is there infrastructure is already in place to build out high-volume connections? Are there maps and diagrams of that infrastructure; can we see them?
Companies like Google, MS, Apple, etc., make huge amounts of money, and they need to put some of that money in tax advantaged investments. Real estate for offices is one of the easiest ways to do this. They can also use this to say that they're investing billions in the US, when in fact the investment is just on existing buildings.
Respectfully, what is there not to understand? They’re expanding their footprint in NYC due to increased demand. I’ve heard here and there that headcount at Google NYC has always been tight, so this should alleviate some of that. Facebook and Amazon have also committed to massive leases in NYC within the past few years as well.
Besides that, these companies wield so much cash it seems like a safe bet to park a couple billion in. NYC real estate is arguably one of the safest bets in the modern era
Google is sitting on bags of cash and those bags are being devalued like we live in Venezuela (40% of all dollars printed in the last 2 years!).
So if you're a cashcow like Google, you want your bags in anything and everything except dollars.
And buying commercial real estate in New York in the midst of lockdowns and remote work while the city is going through a commercial real estate market crash.. is good.
What's not to understand? Presumably, Google's bean counters think the cost of capital necessary to purchase the building plus any real estate value appreciation will be lower than the cost to lease the building. That part seems pretty strait-forward.
Or are you not understanding why they don't "just" have everyone work remotely? If that's the case, then try to understand that despite what you may see online, it may be that many people don't want to work remote all the time. Moreover, working remotely will have deleterious effects on managerial promotion as that is heavily influenced by interpersonal relationships. And higher level managers are the ones that make such decisions. Even if remote work is better for the bottom line, remember that people make decisions to benefit themselves (across a variety of dimensions and timeframes), not their organization.
Just look to Kmart? Somehow the entire company sold for less than their real estate was worth and the entire deal was paid for by the acquiring company taking out loans against their real estate.
Another example would be Sun, I think Oracle sold off their Boulder campus for nearly what they paid for the entire company.
I agree. Sounds like a terrible investment. For that price they could literally give over 2000 employees a million dollars or hire 5000 new employees in other remote locations.
I think this is Ruth shifting cost structures moreso than any indication about in office work culture. I believe they were already renting, so someone probably did the math and realized they'd come out ahead in the medium to long term. Google isn't leaving NYC anytime soon.
“We know that our employees, in order to really be happy and productive, need to collaborate,” said William Floyd, Google’s director of public policy and government affairs. “Because of that need to collaborate, we’ve been investing more and more in office space.
So the implication is that Google is having trouble with comms. As if they think people will meet in the office to plan and go home and code.
My guess is that big companies will run in a hybrid model while startups will be fully remote. But eventually all software development will be WFH only, that's for sure
I feel the same, this will result in a tide change. Companies that embrace wfh will be able to attract the most talented engineers, companies that try to force their employees to come into the office will stagnate
I guess in light of recent news, they decided they needed an East Coast Halloween Store to guarantee geographical redundancy if something should happen to the West Coast one.
It’s the pandemic likely causing the timing, but not as a statement of remote vs not remote work: it’s just cheaper now with the pandemic to buy rather then rent in the medium-long term. So if they decided they need the space for 20+ years then they certainly have the cash to buy if they want to.
You think Google will survive the next 20+ years? We had "status quo" in the last 20 years I don't want it in the next 20 years. Better internet search engine will emerge sooner or later. Google Search always feels the same; improvements are so minor I don't even notice them in the terms of everyday quality of search. We have one "Big Blue" I'm afraid Google will be the next.
Pandemic is great for the rich who are getting prime real estate for cut rate prices, and then will end work from home and make a huge windfall once they gentrify the area.
Big Tech: "We will continue promoting remote work."
Real estate prices plunge. Big Tech buys real estate on the cheap.
Big Tech: "In-person work is important."
Real estate prices surge. Big Tech profits.
[+] [-] neonate|4 years ago|reply
[+] [-] quartz|4 years ago|reply
In a city like New York, living day to day life across many physical spaces is a core part the experience. In fact it's one of the major draws. The park is your front lawn, the cafe your breakfast nook, the theater your living room, and the office is... your office.
Remote work is great and all if that's not the lifestyle you want, and I think the pandemic has perhaps shown that many were living this lifestyle who didn't want it (especially if you were living the quasi-bedroom-city life of SFBay where you slept in SF but commuted out of the city daily for work), but Google embracing the deeply social and physically connected lifestyle of a functional city like New York isn't really a rejection of remote work being viable-- it's just accepting that to many, this type of city life is preferable and having a physical space to do your work provided by your employer is part of what makes that so.
[+] [-] IG_Semmelweiss|4 years ago|reply
Only some 7 years ago, this very area was targeted to be the heart of a new stadium development for the Major League Soccer. It was going to be the West Village home....for NYC FC soccer franchise
It made sense: Pier40 city park, across the street from 550 washington St, was basically a decreipt property stuck in time as was the rest of the neighborhood. Then hurricane Sandy hit. The damage closed the Pier40 building for almost half a year. Some support did arrive from Sandy hurricane aid, which ironically did more to help the building than any other city park initiative.
Post-Sandy, Pier 40 park seemed destined to stumble along.
Then came the MSL. They were convinced they could sell the idea to the site: redevelop moribund Pier40 and 550 Washington St next to it. Everyone seemed excited.
However, they did not count on a surprise rival: parents of the little league baseball kids that regularly play at Pier40 turf fields (as does DUSC soccer kids). They protested. Loudly. Some of them likely well connected.
The project then died and moved elsewhere.
Now, some of those parents live in the area. They are now looking to benefit enormously from this Google development.
Kudos for them. They earned it
[+] [-] burkaman|4 years ago|reply
[+] [-] 01100011|4 years ago|reply
I hate cities but have to think that they're good investments. Global warming will likely change the economics of suburbs and people are having a lot less kids, making cities less unattractive.
[+] [-] throwaway1777|4 years ago|reply
[+] [-] tick_tock_tick|4 years ago|reply
[+] [-] msoad|4 years ago|reply
[+] [-] im3w1l|4 years ago|reply
[+] [-] endisneigh|4 years ago|reply
Though it's pretty ironic that virtually all of the software Google uses and creates facilitates virtual work, yet they insist on an in-person setting.
[+] [-] pyrophane|4 years ago|reply
Believe it or not, there are people out there who find NYC to be a desirable place to live. Not everyone wants to live in a suburb.
[+] [-] tootie|4 years ago|reply
[+] [-] heavyset_go|4 years ago|reply
[+] [-] kyrra|4 years ago|reply
Google just bought another building in Boulder Colorado 4 days ago as well: https://www.dailycamera.com/2021/09/16/google-buys-the-reve-...
The price for it isn't listed yet, but my guess is in the $60m to $100m range.
Google bought the building I sit in now for $131m 4 years ago: https://www.denverpost.com/2017/09/21/google-buys-land-build...
[+] [-] UncleOxidant|4 years ago|reply
[+] [-] maxpert|4 years ago|reply
[+] [-] traceroute66|4 years ago|reply
Indeed. Google of all companies should have embraced the future that was exposed by the pandemic, i.e. remote working.
This is even more the case given 100% of their products are based around the internet and so inherently facilitating remote work:
I mean they pretty much don't have to license any third-party software, all they need to do is eat their own dogfood.[+] [-] beambot|4 years ago|reply
[+] [-] tobyjsullivan|4 years ago|reply
[0] https://blog.google/inside-google/company-announcements/furt...
Edit: updated to clarify this was some building in Manhattan. My original post was confused with another purchase (probably their purchase of the Port Authority building).
Edit 2: Better link
[+] [-] tamade|4 years ago|reply
[+] [-] Salgat|4 years ago|reply
[+] [-] WarOnPrivacy|4 years ago|reply
[+] [-] jdorfman|4 years ago|reply
[+] [-] coliveira|4 years ago|reply
[+] [-] ibn-python|4 years ago|reply
Besides that, these companies wield so much cash it seems like a safe bet to park a couple billion in. NYC real estate is arguably one of the safest bets in the modern era
[+] [-] edwnj|4 years ago|reply
So if you're a cashcow like Google, you want your bags in anything and everything except dollars.
And buying commercial real estate in New York in the midst of lockdowns and remote work while the city is going through a commercial real estate market crash.. is good.
[+] [-] dudus|4 years ago|reply
I imagined that with the pandemic and prospects of less employees in the office things would slow down.
But someone at Google is betting on a rebound after covid of office space demand, company growth or just real estate appreciation.
1: https://www.nytimes.com/2010/12/03/nyregion/03building.html
[+] [-] lbotos|4 years ago|reply
1. They think that in-person work still has value.
2. They want a physical presence in a world-class city.
3. They think the property will appreciate in value to sell later
4. They intend to rent it out and generate income that way.
[+] [-] rmah|4 years ago|reply
Or are you not understanding why they don't "just" have everyone work remotely? If that's the case, then try to understand that despite what you may see online, it may be that many people don't want to work remote all the time. Moreover, working remotely will have deleterious effects on managerial promotion as that is heavily influenced by interpersonal relationships. And higher level managers are the ones that make such decisions. Even if remote work is better for the bottom line, remember that people make decisions to benefit themselves (across a variety of dimensions and timeframes), not their organization.
[+] [-] tw04|4 years ago|reply
Another example would be Sun, I think Oracle sold off their Boulder campus for nearly what they paid for the entire company.
[+] [-] davey48016|4 years ago|reply
If they plan on continuing to use the space long term, then the total cost of renting it might be higher than owning it.
To the extent that investors use EBITDA to evaluate stocks, getting rent off the books is probably good, too.
[+] [-] vmception|4 years ago|reply
[+] [-] t0mbstone|4 years ago|reply
[+] [-] encryptluks2|4 years ago|reply
[+] [-] Wonnk13|4 years ago|reply
[+] [-] ulisesrmzroche|4 years ago|reply
So the implication is that Google is having trouble with comms. As if they think people will meet in the office to plan and go home and code.
My guess is that big companies will run in a hybrid model while startups will be fully remote. But eventually all software development will be WFH only, that's for sure
[+] [-] spaceywilly|4 years ago|reply
[+] [-] microtherion|4 years ago|reply
[+] [-] evanmoran|4 years ago|reply
[+] [-] mrkramer|4 years ago|reply
[+] [-] diebeforei485|4 years ago|reply
[+] [-] literallyaduck|4 years ago|reply
[+] [-] francisofascii|4 years ago|reply
Big Tech: "We will continue promoting remote work." Real estate prices plunge. Big Tech buys real estate on the cheap. Big Tech: "In-person work is important." Real estate prices surge. Big Tech profits.
[+] [-] brightball|4 years ago|reply
[+] [-] unknown|4 years ago|reply
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