That’s one way to alienate your work force.
Plan to IPO in 2019? Why announce 2 years ahead? This is cheap advertising.
That, or he simply can’t find the talent that he so dearly needs…
Every company that bitches about hiring is not paying enough. Simple as that. Do I want to invest in 2nd rate companies that are too cheap to pay compelling wages? No.
I actually agree that this is appropriate - someone who has no money and gets a traffic fine is basically out their income for that week / it’s more than just a slap on the wrist to someone who has more money - John Oliver did a really good segment on this that really made me view the situation differently.
Nice speech man!
His examples are not consistent with his conclusion. Beginning of construction is not the same as completion of construction. Stock and economy crashes at the start of the construction of those buildings but construction of Apple Park has already completed. In fact, upon SJ presentation of the Apple Park plan to city council in 2011, the RE in SV bottomed. RE price appreciation accelerated in 2013 upon groundbreaking of Apple Park.
The construction of large corporate headquarters and skyscrapers often turns out to be a sign of an economic peak. The Empire State Building was planned, and construction began, at the onset of the Great Depression. The Willis Tower, originally known as the Sears Tower, began construction right before the stock market crash of 1973-74. (Soon after, Wal-Mart, which eventually disrupted Sears’s business model, began trading as a public company.) The Burj Khalifa in Dubai, currently the tallest building in the world, was under construction as the global financial crisis began in 2008.
I agree the construction timing comparison is wrong. However, the work force numbers are troubling. Shrinking labor force would explain rents leveling off. If Bay Area RE is going to appreciate faster than national average, then it needs a growing work force.
Yup, that explain nicely why rent are softening… renters all knew it, negotiate low and hard… asking rents are now at 3 years ago rent… and could drop further. Was thinking about buying more rentals, now has to hold my horse. Is happening in Austin too but luckily mine are all renewed before Jun… next renewal would be bad
I’m about to show the quote below from the article:
While wage growth in the region remains strong, and unemployment hovers at a low level of 3.5 percent, the labor force has begun to shrink, indicating that one of the strongest labor markets in the country is no longer bringing people in.
Finally completed reading the article. The journalist added Apple to increase its readership. His main points have little to do with Apple Park. His main points are what I have said a few days ago somewhere in this forum… can’t remember which thread… can’t build any more new houses, expensive hi-tech labor cost, job hopping culture, etc… tech companies need a lower labor cost, lower housing cost and overall cheaper cost of conducting business.
Not only is it not bringing people in, but people are leaving. People who are from the rest of the country think Seattle is expensive. Can you imagine what they’d say about the bay area?
Worrisome. Few years ago, was just mostly talking and net still inflow. This year, net outflow… if house prices have not peaked, it would be soon… I guess rent always lead house prices… well, so far, ptiemann’s Santa Cruz RE experience bore that out, my experience in Singapore bore that out, …
This makes sense with the casual observation that more companies are settling up offices outside of SV too. There was just the article about Apple in Austin. Most companies are growing their presence outside of SV.
These days you can’t just look at San Jose metro to gauge the health of “Silicon Valley”. The Valley now stretches from SF, down to SJ, and spans east including Fremont, Pleasanton and Oakland/Berkeley. Also 3 months don’t make a trend.
SV housing is expensive. But it has always been expensive. At least in the last 30 years our housing cost has always been head and shoulders above most other regions, except NYC perhaps. In the ideal world we should have built more. On the other hand I am not sure it has hurt us as much as the alarmists would have us believe.
In the last 10 years we are seeing companies move to the most expensive bit of Bay Area: San Francisco. Nationally we are seeing a hollowing out of the cheap Midwest towards the expensive coasts, from cheap rural areas towards expensive cities. Human talents are more important than cheap rent, and we win on that front hands down.
This report is interesting.
“More than half (53%) of Silicon
Valley’s 11th grade students
failed to meet state standards in
mathematics and a third (33%)
failed to meet standards in English
No wonder SF dropped algebra. It seems not many kids would be able to take it.
57% of SV stem professionals are foreign born and only 18% were born in California. Native Californians haven’t benefited much from SV. I guess that explains a lot of the hostility towards the tech industry.
Hewlett Packard Enterprise Plans About 5,000 Job Cuts
Big companies always have the problems of having too high overheads (too many high paying personnel, buildings that are expensive to upkeep, too many projects going on and many time-wasting meetings). If it is a government agency, just increase tax and no need to change (throw the law to those who don’t comply) but for a private company, these overheads make it hard to be profitable and move in a new direction.
Exactly. It’s why most turn-around attempts fail. Just another reason to respect the genius of Steve Jobs. He built 3 profitable companies and turned Apple around.