
Silicon Valley Offices Are Stunningly Pricey - e15ctr0n
http://www.wired.com/2014/09/silicon-valley-offices-are-stunningly-priceyjust-like-the-workers-inside-them/
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jasondc
For pricey real estate and offices, I think it comes back to the restrictive
zoning policies in SV and SF. Ideally, developers would build very dense
buildings next to public transportation, but this is more a dream than the
reality here.

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ed209
Caltrain is already over capacity at peak times. I agree that there needs to
be more accommodation near public transport, but I think they'd be better off
building more public transport first!

~~~
Domenic_S
The south bay (south of Diridon) is poorly-served by Caltrain - 3 trains each
way per day, weekdays only, no bullets. I think it'd make a great SV extension
with its cheap(er) real estate and easy access to SF. I know a lot of SV types
with families who are in Morgan Hill/Gilroy because they can actually afford
decent family housing without spending 50%+ of their income on it.

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michaelvkpdx
I just spent a few days down in the area, where I grew up and used to live,
and came back to my home. And I can tell you all with certainty- the only
reason people are paying this is that they're all in a shared
hallucination/brainwashing.

I'll keep my home city a secret for now- it's easy enough to find- but let's
see- I make a Valley-sized salary, live in a house with a yard less than 5
miles from downtown that costs about 25% of the equivalent in the Bay Area, my
office is about 10% of what Google pays, I never sit in traffic, I work on
challenging problems, I can indeed barbecue 12 months out of the year (with
the best beer, wine, and meat in the world) and I know a thousand other
engineers all doing the same.

Any engineer or entrepreneur staying in the Valley or even SF right now should
lose credibility immediately for poor business and lifestyle choice.

And what's happening to SF right now is interesting. It's becoming a suburb-
but the poets are still there. Always.

~~~
revelation
Given the ecosystem can give you a tremendous upside, it would take truly
ridiculous prices to make people stop coming.

But I think it is obvious to everyone that the exploding prices for very, very
basic things you need to run a business are unhealthy and slowly suffocating
the ecosystem. It's a lot of money going to all the wrong people.

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HockeyPlayer
Those rents are insane. I run a HFT firm in the suburbs of Denver, and we have
a beautiful office on a golf course for $20/square foot. For a 10 person firm
using 4,000 square feet, that is an extra $20k per month, which could hire you
2 extra people. Wow!

~~~
ritchiea
Your cost per employee at an HFT firm is $10k per month? Sounds like not much
of a salary & benefits for the employee, especially given the industry.

~~~
hawkice
I think the math here is:

4000 square feet for 10 people -> 400 square feet per person. $20/sq ft. ->
$8000 -> $20k hires 2.5 people worth of office space.

He describes it as a lavish expense, and obviously 400 square feet per person
is more than I've ever seen at a normal tech company. All in all I'd wager
this guy is paying above-market for engineering talent, as most in the finance
space do.

~~~
HockeyPlayer
You are correct on all counts. a) we have more than 10 people in our 4,000
square feet. b) we have lots of extra space. c) we pay well, most people make
more than $10k/month.

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rayiner
> In Mountain View, for example, the home of Google, the price of office space
> is more than two-and-a-half-times the national average: nearly $97 per
> square foot

Almost $100/square foot in Mountain View? I used to work in a high-rise in
Midtown Manhattan (very desirable location: adjacent to Grand Central, and
convenient to the 4/5/6, the 7, and Metro North). Rent was in the $70-80
neighborhood.

~~~
rdl
Last time I was looking, plenty of offices in Mountain View were on the order
of $40 to $80. For the areas away from Caltrain, it got down to $30-40. This
was 2012-2013, though, so it's entirely possible prices have gone up since
then.

The real problem is everyone wants proximity to both 101 and Caltrain, which
limits you to an exceptionally small area and small number of commercial
buildings.

(I went in with some friends on warehouse space on Treasure Island last month,
for about $12/ft with free 3ph power...finally going to have a decent hardware
lab.)

~~~
toby
This is interesting to me... how did you go about finding the space?

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rdl
One of my friends asked me if I wanted in. I wasn't really involved in finding
the space.

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silentscope
This is when the really scrappy innovators, the lifeblood of the valley, head
elsewhere.

~~~
hawkice
Every time I see stories like this on HN I am very tempted to scream about how
my burn rate is $700/mo living a very good life without too many distractions
from my work. I cannot imagine why people would lace up with lead boots on
their first venture by trying it in SF.

~~~
valarauca1
"We all like to believe great works are made like the book Ulysses. James
Joyce locking himself literally in a hotel room for 2 years straight and doing
nothing but working. But reality most great works take as much from what
surrounds them as give back to it." -John Green (Slightly Paraphrased).

~~~
silentscope
"all of us go a little mad: whether from great personal success, or just an
all-night drive, we are the sole survivors of a world no one else has ever
seen." \- John le Carre

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Balgair
The OP is about office rents, but like all other property in California, Prop
13 distorts the market.

[https://en.wikipedia.org/wiki/California_Proposition_13_%281...](https://en.wikipedia.org/wiki/California_Proposition_13_%281978%29)

"The proposition decreased property taxes by assessing property values at
their 1975 value and restricted annual increases of assessed value of real
property to an inflation factor, not to exceed 2% per year. It also prohibited
reassessment of a new base year value except for in cases of (a) change in
ownership, or (b) completion of new construction."

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arbuge
One contradiction:

"The tech talent is in Northern California, centered at Stanford University."
... "Despite Silicon Valley’s ongoing dominance, however, JLL uncovered a
counter-trend. Tech is growing all over the place, the firm found, especially
in cities that are able to find a particular niche within the industry.
Atlanta and Charlotte are growing hubs for financial tech, for example.
Detroit, not surprisingly, is attracting automotive innovation."

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BrianEatWorld
Having just got back from the bay, I recall walking around downtown San Jose
wondering why nobody is making use of open spaces there.

The talent pool isn't much different, as Stanford is just a 20 min train ride,
yet real estate is a good amount cheaper and would provide more reasonable
commutes for areas with even cheaper real estate like Gilroy.

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w1ntermute
A good article on a related topic is _The secretive billionaire who built
Silicon Valley_ : [http://fortune.com/2014/07/07/arrillaga-silicon-
valley/](http://fortune.com/2014/07/07/arrillaga-silicon-valley/)

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Sindrome
Why are people still surprised that the Bay Area is expensive? This is the
standard now. It's only going to get worse.

~~~
johan_larson
What I can't figure out is why major companies, big enough to hire across the
country and even the world, don't make more of a point of hiring staff
virtually anywhere _other_ than the Valley.

If you're in software, you need a presence in the Valley. The Valley attracts
the exceptionally talented and ambitious, you want to hire some of them, and
most of them won't leave. Even Microsoft eventually caved and opened an office
there. OK, I get that.

But surely those who aren't wild talents -- and really, even at elite shops,
most aren't -- are cheaper elsewhere?

