100 Salesforce employees work in its 61-story HQ(sfexaminer.com)
sfexaminer.com
100 Salesforce employees work in its 61-story HQ
https://www.sfexaminer.com/news/how-sf-tech-giants-are-navigating-a-successful-return-to-the-office/
33 comments
I hate clickbait tiles, but I hate it more when a perfectly good title (How SF tech giants are navigating a successful return to the office) is replaced by a clickbait title for posterity (and looking at the URL, it was definitely not A/B testing).
I constantly think about how at the same time we have a housing shortage there a millions of square feet of empty office and retail spaces. Will we ever reuse these spaces the way we turn small scale manufacturing spaces into trendy lofts?
No, because there is too much money to be made in the living space supply squeeze.
That's assuming the people who own commercial real estate also own a lot of residential real estate, which is not the case.
The actual problem is that it costs an enormous amount of money to retrofit commercial properties as residential.
Source: currently have dozens of commercial RE clients
The actual problem is that it costs an enormous amount of money to retrofit commercial properties as residential.
Source: currently have dozens of commercial RE clients
I'm thinking kitchens, showers, walls... fire safety (windows, exits). Are those the big items?
Edit: from the SFChron article mentioned above:
> “Finding the deal for us is almost like the needle in the haystack,” he said. “We had to basically build a brand-new building within a building. It’s not for the faint of heart.” > > Each apartment at 229 Ellis St., ranging from 180 to 300 square feet, cost around $400,000 to build out, less than ground-up construction.
Seems expensive for that tiny of a space.
Edit: from the SFChron article mentioned above:
> “Finding the deal for us is almost like the needle in the haystack,” he said. “We had to basically build a brand-new building within a building. It’s not for the faint of heart.” > > Each apartment at 229 Ellis St., ranging from 180 to 300 square feet, cost around $400,000 to build out, less than ground-up construction.
Seems expensive for that tiny of a space.
As far as I know, the biggest problems are converting plumbing, heating/cooling, and electrical from a communal (often open-office) setup to individual units.
Office buildings are often concrete with drop ceilings to make it easy to access sprinklers, wiring, and pipes, but you would still need to run all of those things across every floor of the building.
A single, modern condo likely has 2+ full baths, so if you're trying to get 10 units per floor, you're going to do that work 20+ times.
Kitchens are also difficult, yes. You need to be able to vent heat and smoke, and you need different electrical wiring in most cases.
Then think about ceilings. Drop ceilings are not appealing to most people, so you need a solution for that. Even if you keep the drop ceiling and just use a nicer tile, you're still spending $5-$30/sqft.
Walls aren't that expensive, but you need a lot of them to convert back from the trendy open-office plans that most buildings have.
There's also a lot of legal work to convert to condos (assuming you don't want to do rentals, which most of these office owners absolutely don't want to do).
There's just a much bigger difference between office and residential space than people realize, I think.
Office buildings are often concrete with drop ceilings to make it easy to access sprinklers, wiring, and pipes, but you would still need to run all of those things across every floor of the building.
A single, modern condo likely has 2+ full baths, so if you're trying to get 10 units per floor, you're going to do that work 20+ times.
Kitchens are also difficult, yes. You need to be able to vent heat and smoke, and you need different electrical wiring in most cases.
Then think about ceilings. Drop ceilings are not appealing to most people, so you need a solution for that. Even if you keep the drop ceiling and just use a nicer tile, you're still spending $5-$30/sqft.
Walls aren't that expensive, but you need a lot of them to convert back from the trendy open-office plans that most buildings have.
There's also a lot of legal work to convert to condos (assuming you don't want to do rentals, which most of these office owners absolutely don't want to do).
There's just a much bigger difference between office and residential space than people realize, I think.
[deleted]
No, the point is home owners turn residential zoning into hell but leave commercial zoning alone. The reason is that more commercial zoning leads to more jobs which strengthens the monopoly power of the home owner.
People who aren't already in the housing industry want a piece of that pie though. Supply vs demand solves the problem.
I don't think supply and demand works at all. At all.
For example, universities and hospital bills have shot up way more than inflation, just huge.
You'd think that would lead to more competition and lower prices, but no way.
Where are this inexpensive accredited universities that charge half the price? Where are the new hospitals that charge half the price?
The only thing that actually goes down are real wages. Companies will gladly pay a lot for real estate, inventory, whatever, but not the employees. Minimum wage in 1979 was $2.35, which is $8.84 in today's dollars. The minimum federal wage now is $7.25.
From the 1930's to 1985, the top tax bracket was 70-90% taxes. The rich get richer. Bill Gates, Jeff Bezos, Sergy Brinn and Larry Page, Tim Cook, Larry Ellison, and the rest of the immoral patrol.
For example, universities and hospital bills have shot up way more than inflation, just huge.
You'd think that would lead to more competition and lower prices, but no way.
Where are this inexpensive accredited universities that charge half the price? Where are the new hospitals that charge half the price?
The only thing that actually goes down are real wages. Companies will gladly pay a lot for real estate, inventory, whatever, but not the employees. Minimum wage in 1979 was $2.35, which is $8.84 in today's dollars. The minimum federal wage now is $7.25.
From the 1930's to 1985, the top tax bracket was 70-90% taxes. The rich get richer. Bill Gates, Jeff Bezos, Sergy Brinn and Larry Page, Tim Cook, Larry Ellison, and the rest of the immoral patrol.
> Where are this inexpensive accredited universities that charge half the price?
Utah Valley University. It's less than half the price and if you're from a midwestern state they have sweetheart scholarship deals.
Utah Valley University. It's less than half the price and if you're from a midwestern state they have sweetheart scholarship deals.
Prices can't go down when the government drops football fields full of money into paying for them. Zero incentive to cut costs.
>Where are this inexpensive accredited universities that charge half the price?
Community college? To be fair, the underlying problem is that everyone is competing for whole "jobs". Since it is a discrete unit you cannot be 95% as good as the best competitor, you have to be 101% as good to get the job. Assuming perfect structural unemployment, it would still make more sense to just let you and the best guy work 50% of the time rather than let the best guy work and let you stay unemployed. Of course the best guy wants moral superiority so he redefines success to be hard work and thus his ability to push you out of the labor market becomes his success.
Health care is a special circumstance. The free market maximalist assumption that the free market and the law of the jungle are the same is actually wrong. The free market is created by denying the law of the jungle (by delegating all violence to the state). With health care the law of the jungle is quite strong. It's easy to extort an unhealthy patient. Whatever benefits the free market is supposed to offer is swamped by our fear of death and the ability to abuse it.
Community college? To be fair, the underlying problem is that everyone is competing for whole "jobs". Since it is a discrete unit you cannot be 95% as good as the best competitor, you have to be 101% as good to get the job. Assuming perfect structural unemployment, it would still make more sense to just let you and the best guy work 50% of the time rather than let the best guy work and let you stay unemployed. Of course the best guy wants moral superiority so he redefines success to be hard work and thus his ability to push you out of the labor market becomes his success.
Health care is a special circumstance. The free market maximalist assumption that the free market and the law of the jungle are the same is actually wrong. The free market is created by denying the law of the jungle (by delegating all violence to the state). With health care the law of the jungle is quite strong. It's easy to extort an unhealthy patient. Whatever benefits the free market is supposed to offer is swamped by our fear of death and the ability to abuse it.
> For example, universities and hospital bills have shot up way more than inflation, just huge.
It is not a coincidence that you picked two industries that thrive on the magic of regulatory capture.
Student loans, which follow a person even if they go bankrupt, removed all incentives for banks to lend intelligently. In fact, they are incentivized to lend larger sums to as many people as they can. And health care is a 9,000 layered beast of corruption across local, state, and federal levels.
It is not a coincidence that you picked two industries that thrive on the magic of regulatory capture.
Student loans, which follow a person even if they go bankrupt, removed all incentives for banks to lend intelligently. In fact, they are incentivized to lend larger sums to as many people as they can. And health care is a 9,000 layered beast of corruption across local, state, and federal levels.
Not if constraining supply inflates asset values more than increasing it does.
And in the case of land, this appears to be the case.
Even if that's only an illusory belief, it's still a determinative one in constraining supply.
Though that may be starting to change:
"After Years of Failure, California Lawmakers Pave the Way for More Housing"
To ease an affordability crisis, the Legislature voted to open suburbs to development, allowing two-units on lots long reserved for single-family homes.
https://www.nytimes.com/2021/08/26/business/california-duple... (https://news.ycombinator.com/item?id=28319169)
I'm still skeptical the roadblock's been cleared. But the noise about fixing the problem's getting louder, at least.
And in the case of land, this appears to be the case.
Even if that's only an illusory belief, it's still a determinative one in constraining supply.
Though that may be starting to change:
"After Years of Failure, California Lawmakers Pave the Way for More Housing"
To ease an affordability crisis, the Legislature voted to open suburbs to development, allowing two-units on lots long reserved for single-family homes.
https://www.nytimes.com/2021/08/26/business/california-duple... (https://news.ycombinator.com/item?id=28319169)
I'm still skeptical the roadblock's been cleared. But the noise about fixing the problem's getting louder, at least.
This just shows that all the finger pointing of developed countries about corruption in developing nations is misguided.
The only difference between them and us is that our development phase happened sooner than theirs. Our developed nation governments are often just as corrupt but the negative impact of their corruption is waning as individuals get wealthier. Those with newly found wealth then commit their own small time corruption (land is a pretty good example).
Zoning limits supply much more than demand.
I've wondered the same and what my limited research has said is that the amount of plumbing and other re-structuring that needs to be done to convert an office space into a living space is current cost-prohibitive.
We may repurpose them as residential, but it won't be soon. Most industries are still expecting a return to near normal.
Even if a lot of people go fully remote, owners of these buildings assume the drop in demand will kill new projects rather than permanently empty out existing properties.
Even if a lot of people go fully remote, owners of these buildings assume the drop in demand will kill new projects rather than permanently empty out existing properties.
The plumbing is all set up for centralized bathrooms. Doubt most people in trendy lofts want to a public bathroom down the hall.
Commercial real estate is very lucrative to local governments and it causes all kinds of problems with housing. We need some sort of a hard ratio limit on how many offices can be built fir a given amount of houses in commutable distance. It is sad to see all the baristas and workers commute crazy distances to get to their work. This is not good for employee well being nor traffic.
Commercial real estate is almost pure “profit” for a City - pays taxes with little demands on services beyond some streets and basic policing.
Arguably property tax on office buildings should be lower to discourage cities from dedicate too much space to it.
Arguably property tax on office buildings should be lower to discourage cities from dedicate too much space to it.
These buildings would require enormous retrofit to bring to residential standards - and then - they're not even zoned for it.
The same problem that's driving the empty space, i.e. 'remote' should 'solve' the housing problem for those remoting, in that there's unlimited inexpensive places to live in the US. It's just expensive to live in specific places, i.e. near that tower.
Other than maybe some industrial buildings retrofitted to lofts + civic issues around that i.e. sidewalks, buses, zoning yada yada it's unlikely you'll ever see these kinds of things retrofitted.
Give it another 2 years, this space will get used one way or another.
The same problem that's driving the empty space, i.e. 'remote' should 'solve' the housing problem for those remoting, in that there's unlimited inexpensive places to live in the US. It's just expensive to live in specific places, i.e. near that tower.
Other than maybe some industrial buildings retrofitted to lofts + civic issues around that i.e. sidewalks, buses, zoning yada yada it's unlikely you'll ever see these kinds of things retrofitted.
Give it another 2 years, this space will get used one way or another.
They converted an fairly tall office tower into condos not far from me.
In short, it wasn't a very profitable venture due to costs of retrofiting it and folks who live there...still feel like they live in an office building.
In short, it wasn't a very profitable venture due to costs of retrofiting it and folks who live there...still feel like they live in an office building.
Even with skyscrapers it’s often more cost effective to level it and start anew. For the standard office park setup even Moreso.
It's not uncommon, actually, including in San Francisco, where there are many examples. As others elsethread have said, though, it's just not as easy or affordable as you'd expect. Here's a recent SF Chronicle article discussing it: "S.F. has nearly 16 million square feet of vacant office space. Why can't it become housing?", https://www.sfchronicle.com/business/article/S-F-has-nearly-...
In the UK we have house developers converting offices located in busy industrial estates into residential flats.
There's been a number of deaths of residents and countless accidents recently because of some of these locations are absolutely terrible for residents to live in.
One area on my way to work has no green space for about a mile, access is through a single busy road used by skips and big vehicles and the noise starts early in the morning, and air pollution is very high. Where do families and children go when they want to play?
I think it's criminal councils are approving some areas for residential use. I think councils are liable for deaths in these unsuitable areas.
There's been a number of deaths of residents and countless accidents recently because of some of these locations are absolutely terrible for residents to live in.
One area on my way to work has no green space for about a mile, access is through a single busy road used by skips and big vehicles and the noise starts early in the morning, and air pollution is very high. Where do families and children go when they want to play?
I think it's criminal councils are approving some areas for residential use. I think councils are liable for deaths in these unsuitable areas.
I worked in a four story building with maybe 100 people in it at one time, but in the past held about 600 people comfortably (dude to an acquisition we were what was left).
It still received regular cleaning services and etc to all floors. Only a few bothered to leave our corner of our floor.
Using the executive suite bathrooms was a real treat.
It still received regular cleaning services and etc to all floors. Only a few bothered to leave our corner of our floor.
Using the executive suite bathrooms was a real treat.
I worked as an intern at IBM’s Boca Raton campus just before they shut it for a move to Austin. It was crazy deserted and eery. Not the same, I guess, since it was more sprawling with little multistory buildings.
I worked in an office meant for 80 that only ever had 35. Room to grow! It was great. Then 30 people quit.
Later I worked in a scyscraper. Our floor was never exactly full, then like 80% on the floor were laid off. Entire teams gone.
Eerie is a good way to describe it. Being more or less alone with so much space, especially when you remember better days, is not fun.
I had the same experience - facilities dutifully kept doing their thing. They also worked through one week business shutdowns. First time, food kept coming too.
Now I work from home, which can be a different kind of isolating. If people left (one way or the other) I'd hardly notice unless they're on my team. (Still prefer the homeoffice overall, but eager to see my coworkers again occasionally.)
Later I worked in a scyscraper. Our floor was never exactly full, then like 80% on the floor were laid off. Entire teams gone.
Eerie is a good way to describe it. Being more or less alone with so much space, especially when you remember better days, is not fun.
I had the same experience - facilities dutifully kept doing their thing. They also worked through one week business shutdowns. First time, food kept coming too.
Now I work from home, which can be a different kind of isolating. If people left (one way or the other) I'd hardly notice unless they're on my team. (Still prefer the homeoffice overall, but eager to see my coworkers again occasionally.)
It should be remembered that until quite recently there was an extreme lack of office space in San Francisco. Construction of new office space in the city is rationed because of the perception of an imbalance with residential space. On top of that Salesforce was infamous for having an insatiable appetite for office space exhibited by leasing whole buildings before construction was finished. Even a fractional return to normal could quickly use up all of the available space. The idea that it is time to convert office space to residential is not solid and ignores the laws against converting anything into new office space again if the balance changes.
San Francisco has a history of converting office buildings into residential space with some notable examples within blocks of the Salesforce building. The Palms on Fourth between Bryant and Brannan is an example of this. Compared to the cost of housing in the area the complications involved with remodeling are actually rather minor, especially for new modern construction like this recently finished building.
San Francisco has a history of converting office buildings into residential space with some notable examples within blocks of the Salesforce building. The Palms on Fourth between Bryant and Brannan is an example of this. Compared to the cost of housing in the area the complications involved with remodeling are actually rather minor, especially for new modern construction like this recently finished building.