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Schwab Leaves San Francisco for Texas
- jakozaur 7y agoSF Bay Area gets so expensive that even financial giants gets gentrified.
- toomuchtodo 7y agoRational economic actors going to act. Why be in SF just for the novelty if you can go somewhere cheaper. Disclaimer: Schwab customer
- api 7y agoNovelty? Quite a lot of that has been driven out already.
- deleted 7y ago[deleted]
- zer00eyz 7y agoIf you are a broker you go to NYC, banking is London, commodities is Chicago, electronics is Shenzhen.... You come to the bay FOR tech, and for A-team tech at that. There simply isn't any other place on the planet for you to go if you want to be with, and work with the best.
- toomuchtodo 7y agoTurns out a lot of businesses don't need A-team tech though.
- lykr0n 7y agoI would be curious to see the ROI for someone like Schwab for staying in the Bay Area. Does the reduce capital costs of people, taxes, and buildings outweigh the talent pool in the area? Makes me wonder what the numbers look like.
- undefined3840 7y agoSchwab isn’t exactly competing for the “tech” talent pool so there isn’t anything particularly special about staying in SF vs elsewhere for them.
- lykr0n 7y agoWhy not? Billions in assets. Automated investment and market prediction projects. Extremely well built Web UI- you can tell they're hiring industry UI/UX people by the interface they are beta-ing- upgrade in functionality but major downgrade in usability.
- undefined3840 7y agoA middle of the road developer can make all of those things. You don’t need a 10x ninja in SF who demands 500k/year to do that. Highly doubt Schwab has really been competing on salary in SF for tech roles as is.
- lykr0n 7y agoDoes anyone?
- atombender 7y agoWhat beta products are you referring to?
- lykr0n 7y agoThey're working on a new research UI. So you plugin a symbol like SPY and you get a bunch of information on the stock. There is a banner for a beta redesign
- atombender 7y agoOh, that. I've used it, and didn't find it very impressive, certainly not what I'd expect from top UI/UX talent. Schwab's site isn't terrible, just very old-fashioned (and a little buggy).
- spectramax 7y agoI 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.
- scurvy 7y agoCrime 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.
- driverdan 7y agoProperty crime is high in the bay.
- scurvy 7y agoYes, SF does rank #1 nationally for property crimes. It stinks, but most people value life more than property. Violent crime in the Bay Area is still much lower than national averages, and that's what most people concentrate on. Also, San Francisco isn't the entire Bay Area.
- FireBeyond 7y agoYou go from saying "people who live in actual high crime areas would like a word with you" to acknowledging that SF has the highest property crime rates in the country. And then wave it all away as, I guess, it's only really non-violent crime. Odd logic.
- scurvy 7y agoI also said, that SF isn't the entire Bay Area. If you gave weightings to crime categories (we all do this internally), property crime would probably be the lowest weighted next to white collar crime. Violent crime would get exponentially higher weightings. It's one thing to have $200 worth of stuff stolen in a car break-in. It's another to be violently mugged for $200 in cash on your person. I've lived in bad areas and the Bay isn't one of them. I'll trade property crime for knowing my family isn't likely to end up the victim of a horrendous violent crime. Manhattan also has high property crime rates but low violent crime. Even has high real estate costs, but you don't see anyone knocking it as a hell hole. There are people with some weird agenda/vendetta against the Bay Area, and they're obviously pouncing here.
- rahimnathwani 7y agoThe largest US drug distributor said it's doing the same thing: https://www.sfchronicle.com/business/article/McKesson-biggest-U-S-drug-distributor-to-move-13435748.php https://www.sfchronicle.com/business/article/McKesson-bigges...
- nthomas 7y agoWelcome to the Lone Star State! Cheap real estate and friendly folks. And BBQ, metric tons of BBQ...
- driverdan 7y agoWestlake does not have cheap real estate.
- smohnot 7y agoRelative to Dallas, yes - relative to SF it's quite a bit cheaper. Westlake's median price per square foot is $392, SF is $1068. The surroundings of SF don't get much cheaper. Dallas is $204/sf. https://www.zillow.com/westlake-tx/home-values/ https://www.zillow.com/westlake-tx/home-values/ https://www.zillow.com/san-francisco-ca/home-values/ https://www.zillow.com/san-francisco-ca/home-values/ https://www.zillow.com/dallas-tx/home-values/ https://www.zillow.com/dallas-tx/home-values/
- shuckles 7y agoI think the appropriate measure is median sales price, not price per square foot. Cities show that most people can consume much smaller homes than the median new construction in America, but small homes isn’t as much of an option in this part of Texas.
- hindsightbias 7y agoAnd no Prop 13. Takes 1 or 2 reassessments before the screeching begins.
- ummonk 7y agoUnless you're a retiree, the lack of a state income tax makes up for it. Texas' policies are pro-worker and anti-landowner.
- sdnlafkjh34rw 7y agoAustin is the least affordable of the Texas metros. The affordable ones are Houston, San Antonio, and Dallas/Fort Worth (basically any major metro outside of Austin).
- mikece 7y agoTo 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.
- deleted 7y ago[deleted]
- xyst 7y agoCompanies 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
- samfisher83 7y agoA large chunk of the kids who go to UT are from houston and dallas. Austin is a really small city if you have been there. It would fit like in a quarter of Houston.
- fred_is_fred 7y agoWestlake - which is in the DFW metro area.
- seanmccann 7y ago> 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).
- hkmurakami 7y agoThey're moving HQ and refraining from growing headcount here in the future
- repsilat 7y agoYeah. Also from TFA: > Schwab says it plans to retain a “sizeable corporate footprint” in San Francisco, but the brokerage firm has slashed its workforce in the city by 90% since 2000 while expanding branches around the country. It sounds like this is just a good opportunity to cross another bridge.
- hourislate 7y agoFrom 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 7y agoThey'll keep outside facing functions here for the local markets, clients, partners, etc. Corporate back office operations will move entirely
- newguy1234 7y agoThat'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.
- deleted 7y ago[deleted]
- jonas21 7y agoThis 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 https://www.aboutschwab.com/announcement
- hkmurakami 7y agoTD Ameritrade is headquartered in Omaha. The HQ location choice is not driven by existing Ameritrafe footprint, or by the merger itself. The FAQ is simply addressing what will be, not starting that there was a cause and effect because of the proposed merger. Also, Schwab was already reducing SF headcount for years. Also, afaik the merger is still in the prices of regulatory review. All this being said, the merger likely gives a tactical opportunity to move HQ out of state without triggering a governmental review of some kind by pairing it with the merger event.
- cortesoft 7y agoWhy would the government review a headquarters move?
- hailwren 7y agoStates and cities often give large corporations preferential treatment to maintain a footprint there. I'm not sure if this is the case for Schwab/SF, but if they are getting a break then announcing a move might be a time for SF/California to start clawing back benefits.
- hourislate 7y agoFor 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 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.
- deleted 7y ago[deleted]
- Havoc 7y agoWhy were they even in SF at all? I mean unless you're in the tech scene & need the valley synergies the trade off seems straight up bad
- 0xffff2 7y agoApparently they were founded in SF in 1971. I wasn't around back then, but presumably it was not the complicated expensive mess that the area is today, so there was no particular reason not to be in SF.
- bsagdiyev 7y agoBecause that's where they were founded in 1971, SF has a history before the most recent tech bubble.
- newguy1234 7y agoSF used to be a big financial center that started during the gold rush era.
- skybrian 7y agoThis 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.
- zer00eyz 7y agoHousing and taxes in CA are close to oppressive. The housing situation will not change unless CA voters agree to a change in property taxes and they won't. I would also bet that the move will come at the expense of Texas tax payers and to the benefit of Schwabb.
- skybrian 7y agoWhile California taxes are high, this doesn't seem to be the main reason that building more housing is difficult? For that you can blame zoning restrictions and political opposition.
- zer00eyz 7y agoThat is a piece of it. But the housing market lacks liquidity due to prop 13. When your tax basis doesn't reflect the value of your property and doesn't keep up with inflation it makes NO sense for you to move in response to market conditions. Not building housing increases the value of what I already own, and the tax policy means I don't face the economic pressure to change any of it. The two are deeply linked and going to be nearly impossible to change.
- TulliusCicero 7y agoPart of the problem with housing prices in California is that property taxes are too low. Prop 13 means existing homeowners are shielded from higher property taxes, so growing property values are only good for them, no matter how high. Thus, there's no incentive to increase housing supply, which could lower prices.
- justinzollars 7y ago
- slater 7y ago"The brokerage giant heads for a state that doesn’t punish finance" opinion, indeed!
- scurvy 7y agoSquare is still in SF.....for now. Stripe left/is leaving.
- pasttense01 7y agoSome others articles which may not have a paywall: https://www.dallasnews.com/business/2019/11/30/schwab-is-the-latest-company-leaving-california-for-texas-and-it-wont-be-the-last-expert-says/ https://www.dallasnews.com/business/2019/11/30/schwab-is-the... https://www.sfchronicle.com/business/article/Charles-Schwab-to-lose-SF-headquarters-in-26-14860683.php https://www.sfchronicle.com/business/article/Charles-Schwab-... https://www.bizjournals.com/sanfrancisco/news/2019/11/25/schwabs-moving-its-headquarters-will-other-s-f.html https://www.bizjournals.com/sanfrancisco/news/2019/11/25/sch... https://riabiz.com/a/2019/11/28/schwabs-headquarters-shift-to-texas-amid-td-ameritrade-merger-seems-to-please-nobody-outside-the-dallas-chamber-of-commerce-omaha-feels-especially-omitted https://riabiz.com/a/2019/11/28/schwabs-headquarters-shift-t...
- pjg 7y agoAm 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).
- droopyEyelids 7y agoKeep 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.
- pjg 7y agoSooner or later they will need to make profit. I posit they are on a good trajectory to do so: Square and Stripe will make profit in payments (they almost are) Coinbase will make a profit in crypto (it's already break even) Affirm, Lendup, Sofi etc. will make a profit in lending Robinhood and the likes of it will make a profit in trading The reason is simple: The traditional companies that they are displacing had an order of magnitude higher cost structure and weren't able to transform their backend legacy systems quickly enough (yes, they did transform their front-end UI/UX somewhat to match the newer ones, but the core is not scalable to be able to offer newer products). If the older companies were able to make a profit the newer ones will make greater profit. Again, to take Robinhood as an example: Free trading a great lure for users, however most of the money is made on other services e.g. float. Thus giving away a small part of revenue i.e. trading cost and recoup more from other services is huge.
- nickthemagicman 7y agoWhy does Schwab still exist when there's free trading nowdays?
- 0xffff2 7y agoSchwab offers commission free trades now.
- nickthemagicman 7y agoWhat does it offer then if it's no longer a brokerage?
- mixmastamyk 7y agoWhy do you think it’s no longer a brokerage?
- crwalker 7y agoAs 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.
- fourstar 7y agoThe 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.
- wpasc 7y agoWhat about all the longtime existing homeowners who make it very difficult to build new/denser housing?
- fourstar 7y agoWhat about them? Those longtime existing homeowners are trying to maintain the current landscape and don’t want new construction obstructing their million dollar views. Yes many are NIMBYs, but so would most people if they grew up in a place that saw an influx of new people wanting to change the landscape with ugly high-rise all glass condos that blind you when the sun sets or change the feel of what they’re familiar with. In a way, I don’t blame them. The majority of newer construction in the past 20-30 years in SF particularly is horrid.
- Reedx 7y agoYeah. 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.
- 7y ago
- ausjke 7y agoIt's said Texas vs California is like Capitalism vs Socialism. Clearly Texas has won landslide and CA is on its way to hell, just thinking about breaking into your car and stealing from store for under $900 will not be deemed as crime makes me sick. So many CA residents are moving to TX, in the hope of what? Their first to-do item is to turn TX into CA, all those socialism and liberal bullshit. They did the same to Oregon, Colorado, etc. It's epidemic. I wonder why they stopped the initiatives to separate from US? I can't wait to support their efforts. Please go away and leave us alone. At least stop coming to TX please, we're doing fine, just don't come here and ruin what we had.
- AnimalMuppet 7y agoWhy do people leave CA? Because they don't like what it's becoming. So they move somewhere else. But it's not really what they want, either. What they want is maybe 75% Texas, 25% California. So they try to move Texas, not all the way to California, but in that direction. To the people in Texas, that feels like "trying to turn Texas into California".
- ausjke 7y agoPeople make the state as it is today, so those people are exactly the reason what made CA is becoming. No they don't want to do just 25%, they want to own it and do 100+% their way wherever they migrate to, it's called Stockholm Syndrome. After they destroy a new place, they will move on to yet another state, which is why I call epidemic.
- AnimalMuppet 7y agoYou're assuming that, in bulk, the people who leave are the same as the people who stay. That's possible, but I suspect that it is not actually true.
- ausjke 7y agoI deduced it based on all the people I know who moved from CA to TX, I can tell you there are quite a lot of them. The pattern is quite obvious to me. Over time I adapted to it somehow by reminding myself to stay absolutely politically correct when I communicate with them, which also means, there is no way to develop any friendship at all when you have to act like a politician.
- big_chungus 7y agoPosted four days ago when it was announced: https://news.ycombinator.com/item?id=21633593 https://news.ycombinator.com/item?id=21633593
- rb808 7y agoI heard they have water and electricity out there.
- gojomo 7y agoOnce upon a time, "Go West, young man" was advice for "growing with the country": https://en.wikipedia.org/wiki/Go_West,_young_man 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."
- dmode 7y agoCalifornia companies capture >50% of VC investment. So, there are big headline moves, but the underlying truth is California destroys every other state when it comes to growth
- guelo 7y agoYou probably didn't hear a few weeks ago that Visa will vastly expand it's SF headquarters. Since San Francisco is despised by conservatives we get this constant schadenfreude highlighting of any SF bad news by people who need their partisan views reinforced.
- austincheney 7y agoFor 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 https://en.wikipedia.org/wiki/Westlake%2C_Texas New Headquarters: https://www.google.com/maps/@32.9933674,-97.2120872,724m/data=!3m1!1e3 https://www.google.com/maps/@32.9933674,-97.2120872,724m/dat... Ameritrade campus: https://www.google.com/maps/@32.9774174,-97.1618883,512m/data=!3m1!1e3 https://www.google.com/maps/@32.9774174,-97.1618883,512m/dat... Fidelity campus: https://www.google.com/maps/@32.9828451,-97.1885764,609m/data=!3m1!1e3 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.
- iamleppert 7y agoYesss!! Kick them out of their SF office and put in a WeWork in its place!
- dang 7y agoPlease don't post unsubstantive comments here.
- dmode 7y agoCompanies 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%.
- dbrowne 7y agoAnd who would want to live in some podunk town? Top talent live and work in destination cities.