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Google pays $250M for Sunnyvale offices where 3,000 could work

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Re: Google pays $250M for Sunnyvale offices where 3,000 could work

#51

Post by ethanbond »

tallanvor wrote: post #45
mtbcoder wrote: post #26

Earlier quoted context omitted.

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.

It can be hard to find people who actually want to live there. It's one thing to have a stream of new interns and even fresh college grads, but what do you do when they constantly want to move somewhere else after a year or two?

It'll be more and more difficult to convince people to move to Mtn View, though.

It's a delicate balance.

Re: Google pays $250M for Sunnyvale offices where 3,000 could work

#52

Post by rebelde »

bravura wrote: post #3

Interesting 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

You 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

Re: Google pays $250M for Sunnyvale offices where 3,000 could work

#53

Post by mgkimsal »

tyingq wrote: post #42
bane wrote: post #39

Earlier quoted context omitted.

Mortgages also don't go up once you're in, so they decrease as a percentage of living cost over time (assuming no change in income), while rents go up roughly with inflation.

Agreed, although property taxes and insurance typically do go up. How much that matters varies greatly by location.

We had property taxes go down (based on declining home value, of course). When renting, I never had my rent go down, even if the building values went down :)

You're right, though, on tax/ins. They tend to be a much smaller portion of the outgoing. Currently combined, we're at ~$3000/year for tax/ins. Even if that went up by 20%, it's an extra $50/month (wouldn't be happy about that, but it wouldn't break the bank). Rent of $2100 going up 20% is a much huger issue.

Re: Google pays $250M for Sunnyvale offices where 3,000 could work

#54

Post by svantana »

bravura wrote: post #3

Interesting 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

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.

Re: Google pays $250M for Sunnyvale offices where 3,000 could work

#55

Post by tallanvor »

ethanbond wrote: post #51
tallanvor wrote: post #45

Earlier quoted context omitted.

It can be hard to find people who actually want to live there. It's one thing to have a stream of new interns and even fresh college grads, but what do you do when they constantly want to move somewhere else after a year or two?

It'll be more and more difficult to convince people to move to Mtn View, though. It's a delicate balance.

Certainly cost of living in the area is becoming a major issue for companies. But it's the startups who are already being priced out of the area. Companies like Google and Apple can afford to offer higher wages (even if they don't necessarily want to.)

But before you see these companies trying to start a major hub in a university town, there are other large cities that would be more palatable: Chicago, Pittsburgh, Boston, and Portland are places I would expect to be considered. Even Raleigh/Durham and Charlotte since there's already a fair bit of momentum there, although I suspect them to be a more difficult sell for the same reasons I think Atlanta will have trouble attracting talent.

Atlanta would be somewhat attractive, except that Georgia has just passed their "Religious Freedom" law (i.e. the "We Support Discrimination" law). Tech companies tend to be more liberal and don't like limiting their applicant pool, and setting up shop there would certainly do so.

Re: Google pays $250M for Sunnyvale offices where 3,000 could work

#56

Post by cmrdporcupine »

mtbcoder wrote: post #26
yitchelle wrote: post #21

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.

Right, you mean like Google Waterloo

Re: Google pays $250M for Sunnyvale offices where 3,000 could work

#57

Post by ones_and_zeros »

perryh2 wrote: post #14
codezero wrote: post #8

Recently 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.

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.

Ah yes, the worlds best and brightest, in the worlds technology hot bed, blamed for gentrification, told we are over paid, told our skills are in such demand that special worker visa systems are in place to supplement the supply but not only can they not afford a home, they can't afford rent by themselves.

Someone is making money in SV to live alone and buy homes but it isn't the engineers.

Re: Google pays $250M for Sunnyvale offices where 3,000 could work

#59

Post by Inthenameofmine »

e12e wrote: post #19
abbasmehdi wrote: post #4

Why not East Bay or South Bay, or anywhere but the peninsula?

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 think the answer is a combination of culture and sunk cost. The people hiring do so locally for personal cultural reasons; hiring globally means changing almost all busines processes. They already have thousands of co-located employees, so switching to a global model would entail drastically changing the nature of their company.
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