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Google pays $250M for Sunnyvale offices where 3,000 could work
- trm42 11y agoHeh, read first Sunnydale. Would've been awesome to have offices next to Hellmouth.
- DropbearRob 11y agoyou're not alone.. I read it as Sunnydale as well and looked at the comments expecting loads of Buffy jokes.. alas.. I cant read :(
- bravura 11y agoInteresting to note that this works out to roughly $700 per employee per month, over a ten month span. $250M / 10 yrs / 12 months / 3000 employees = $700 per employee-month
- Matthias247 11y ago10 month -> 10 years But in total it would be more, because that price won't Cover Runtime expenses
- rebelde 11y agoYou need to ask the rate that they can borrow the money at, because they can sell the building in the end. 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
- svantana 11y agoExcept 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.
- jessriedel 11y agoLand isn't valuable because there is a finite supply. Only certain land is valuable because there are buildings and people nearby, which is why land out in the wilderness is nearly free. The prediction is based on the fact that individual cities grow, not that the total fraction of land occupied by humans becomes nonnegligible.
- MichaelBurge 11y agoThat quote makes a lot of sense in a country with limited land like somewhere in Europe. It doesn't make sense in the United States where we have large swathes of completely undeveloped land. Even useful farmland is only a few multiples of $1000/acre. Your quote would force them to appreciate in price 100 years from now, but on timescales shorter than that I don't see it providing any real guarantee. Just look at Detroit.
- rrrrtttt 11y agoPresumably, Google's core business has better return on capital than real estate, or else Google would have become a real estate shop.
- brudgers 11y agoIt 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.
- alooPotato 11y agoAssuming no terminal value
- abbasmehdi 11y agoWhy not East Bay or South Bay, or anywhere but the peninsula?
- yes_or_gnome 11y agoI 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.
- cpeterso 11y agoGoogle already buses its employees from all corners of the Bay. So they know there is talent outside of the Peninsula.
- yes_or_gnome 11y agoRight. But, there's still the time cost of commuting. If you pay a premium to live in SF, then you're not going to want to commute 90-120 minutes so South Bay. Then another 90 minutes back at night. In that situation, you'd be paying a premium to live in cramped quarters, in a city with thousands of things to do, but have zero time to do any of it during the week. I meet people on Caltrain coming from Gilroy commuting to work all the way in SF. Commuting 3-4hrs a day. WTF? I guess there's nothing to do in Gilroy, or they hate their families. Joking aside, the honest answer is the only affordable, nuclear-family homes are in the far-south. (Back to joking. Can we even call Gilroy the Bay-area?) As it seems to me. When you make the decision to come to the Bay-area. * You have to decide, do I want to drastically overpay for where I live to be close to SF? * Do I want to commute 1-3 hours a day? * Or, do I want to have roommates when I am 30+ years old?
- bane 11y agoSo Google et al. should start putting offices in Gilroy, etc.
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- codezero 11y agoRecently my rent in Sunnyvale for a nice two bedroom went up to $2900* a month from $2100 Looks like the trend will continue. *not including trash and utilities.
- hkmurakami 11y agoYup pretty straightforward spillover from Palo Alto -> Mountain View -> Sunnyvale -> Santa Clara that we've been seeing over the last 20 years.
- jon-wood 11y agoSounds 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.
- perryh2 11y agoYou 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.
- epicureanideal 11y agoNot to beat a dead horse, but that's hard to do with a family. So by the time you're late 20s to mid 30s and have a stable long term relationship and possibly kids, you're looking at those $2900/mo prices.
- e12e 11y agoSo, same price? (2400 for two bedrooms, add a premium for not being 2 roms in a 4-rom flat)?
- ZanyProgrammer 11y agoI recently moved from the Bay Area to get rid of this-as you get older, interviewing with people (often for fucking culture fit) for the privilege of sharing a bedroom gets really, really old (I just want to pay rent and mind my own business). There's something to be said about living as an adult and having your own place.
- b212 11y agoI 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...
- roel_v 11y agoFirst, 250m for 3000 ppl is 100k/worker. 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.
- smitherfield 11y agoYes, and a company with as much cash as Google can finance at near-zero interest nowadays. (Not sure if they did, but they could).
- amelius 11y ago> when you buy a building, it maintains its value Historically, there have been lots of empty offices during economic crises.
- roel_v 11y agoStill doesn't make it a 'cost' of 100k / employee. And of course you depreciate etc. My point was that buying a building isn't a 'cost' in the way pencils are.
- cybette 11y agoWhile 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/ https://remote.co/10-stats-about-remote-work/
- yitchelle 11y agoI 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.
- raverbashing 11y agoThis You can have shuttle buses between campuses from when you really need to be in one place, for example
- robk 11y agoOr like Intel a corporate jet to go between Folsom and Santa Clara. Works really well actually.
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- st3v3r 11y agoWhat about for taking advantage of the perks of being on the main campus, though?
- yitchelle 11y agoDoes those perks add to your quality of life? For me, I would put perks lower than having a lower cost of living, less commute time, less stressful lifestyle. Horses for courses maybe.
- raverbashing 11y agoOnly if they save me more time and make me worry less than staying closer to home Most perks are only for show anyway. I'd rather not have a dog than bring it to work, or just have time to play with it by commuting a shorter distance
- mrfusion 11y agoThat's 83k per employee.
- xyzzy4 11y ago$250M when all those workers could be working from home with the same efficiency, and greater quality of life.
- sabalaba 11y agoIs there research that suggests working from home is equally efficient?
- xyzzy4 11y agoYes, here's one: https://hbr.org/2014/01/to-raise-productivity-let-more-employees-work-from-home https://hbr.org/2014/01/to-raise-productivity-let-more-emplo...
- ryandrake 11y agoCareful what you wish for. If your job can be done from home, it can be done from India.
- f0code 11y agoRicky and Bubbles are not going to like this.
- HemanHeartYou 11y agoUnderrated comment
- VikingCoder 11y ago569,000 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.
- iofj 11y agoFrom another post by a Xoogler: [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..
- Lind5 11y agoGreat...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?
- st3v3r 11y agoThat 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.
- Lind5 11y agoI hear you.. but I'm guessing there is actually a larger number of people that would benefit from the bay area being less congested than the number of folks riding a bullet train to LA