Blog Post

Catering to employee demand: Tech companies relocate downtown

The tech industry places a high premium on recruiting, and for good reason. It can cost $30,000 in fees to attract and engage a software developer, and large Seattle-area firms – like Amazon and Microsoft – hire hundreds of IT professionals each month. High stakes, high volume activity has helped create a $35 billion recruiting market in the U.S.

Tech firms are finding that the “built environment” – which includes everything from office layout to the surrounding parks, neighborhoods and public transportation systems – is one of the keys to attracting employees. For example, Twitter’s new headquarters on Market Street in San Francisco features a yoga studio, a rooftop garden and an arcade. And, pedestrians walking through Seattle’s South Lake Union neighborhood don’t even realize they are passing through Amazon’s corporate headquarters, which is surrounded by restaurants and open courtyards.

Photo by Troy Holden
Photo by Troy Holden

To remain competitive, tech firms are relocating their offices back to urban and transit-connected districts. Those that don’t keep up risk losing the talent base that they’ve worked so hard to acquire. Given that dynamic, here’s what works and what matters to the tech industry:

  • Proximity to Amenities: Concur, a leading provider of business travel and expense management solutions, recently moved from the exurbs to downtown Bellevue, Wash. — paying three times more per square foot. The company’s rationale was specific: To help recruit and retain the best employees who actively seek urban experiences, transit and a variety of casual dining options.

  • Open Offices: Google conducted extensive time and motion studies to identify how to foster serendipitous interactions among their many bright employees. Today, Google and other tech firms prefer 30,000 square foot floors (or larger) to enable more than 200 workers to occupy and interact closely. Companies also want column-free spaces to enable line-of-site interaction, and high ceilings to provide more daylight and to enable the use of indirect lighting.

  • Focus on Outdoor Activities: HR managers at Microsoft say that new employees negotiate to work in buildings with showers, lockers and bike storage to accommodate active lifestyles. While foosball and ping-pong tables were common during the dot-com boom, the focus has moved to urban parks, trails, off-leash areas and active recreation spaces.

  • Classic, Efficient Design: The most successful urban neighborhoods follow centuries-old design principles. Walkable grids with transit at the center and nothing more than a 5 minute walk from the train station. Green spaces, gathering places, diverse local retail and casual dining, not national chains, help spur civic engagement and street culture. These design principles are the basis of new neighborhoods like The Pearl District in Portland, The Mission District in San Francisco and LoDo in Denver.

Twenty five years ago, the common design philosophy was to appeal to tech professionals’ familiarity with college campuses by recreating a similar environment. This worked well when employees were tethered to their desktop computers, but that is no longer the case. Employees today, on average, want to live and work downtown near an assortment of urban amenities.

Greg Johnson is president of Wright Runstad & Co., an urban development company that is building the Spring District in Seattle.

7 Responses to “Catering to employee demand: Tech companies relocate downtown”

  1. The suburbs are dead and so are their schools. The 30 somethings are staying in the cities and putting massive pressure on urban school districts to improve facilities. As the wave of “urban decay” families decamp for the suburbs or simply disappear from the urban landscape, the schools improve exponentially. You can track the improvement in school testing results which directly track the number of “non-subsidized lunch subsidized student” counts.

    The only thing that matters with schools is that the 30 somethings stay (they are) and that they enroll their kids. The test scores follow. The teacher quality follows the good students as well.

    Good luck suburbs. You’ll need it.

  2. Nicholas Paredes

    A post like this sure brings out the fear! After the real estate bubble, this must be like a second slap. The third slap will be the implosion as the boomers retire, and suburban property values really tank.

  3. This seems shortsighted. The 20 somethings will eventually become 30 somethings with kids. They will go onto become 60 somethings still with kids. Priorities change to schooling and best school districts. Good transit connected suburbs with top notch schools is where the real talent eventually accumulates.

  4. I am a top notch coder and I don’t want to go to any goddamn downtown specially not SFO where bums just lie in the sidewalks, I would rather live and work in the suburbs where it’s safe for my family and me.

  5. Anonymous Coward

    Or, to put it another way, let’s align our location with the lifestyle of 20-something hipsters who’ll work long hours for low pay and while making it more inconvenient for older workers with families who live in the suburbs where the good schools are.

    • Nicholas Paredes

      I work at Grainger designing mobile apps, and previous launched all of Walgreens apps before moving on. Both companies placed e-commerce labs in downtown Chicago because there was no way on earth people with these skills were taking a train and a bus each way to work. I did for special projects.

      At 47, I don’t want to die in the burbs having spent much if my life commuting. I don’t own a car, and ride a bike until its nasty here in Chicago. My son who is 27 has a standing agreement not to move further than Evanston to raise kids.

      The older workers you are referring to are frankly the past, as the city was the past for you. Get used to it, and watch those suburban property values when the boomers retire.

  6. Glenn Fleishman

    “passing through Amazon’s corporate headquarters, which is surrounded by restaurants and open courtyards.”

    Greg, to clarify in Seattle, where we both live, South Lake Union is an interesting mix of private and public property. So it’s not strictly accurate to say we’re walking through Amazon’s “corporate headquarters.” Rather, Amazon and its landlords and property managers, have done a rather spectacular job of interweaving public and private space in a way that doesn’t feel like it detracts from public access or ownership, nor the utility of adjacent private businesses, as you mention.

    The original plan for that area was the Seattle Commons, floated nearly 20 years ago, which would have put a Central Park style park in the middle of the last major light-industrial area in Seattle. I opposed it, because I felt it would reduce city density and cut the heart out of mixed-use. It failed to get the votes.

    This turned out to be true. The Eastlake and South Lake Union neighborhoods, all the way to downtown, went through remarkable transformation because as Seattle went through its incredible growth and the restoration of our decrepit downtown, the pressure pushed north, and light industrial transitioned into a very neat array of light industrial, retail, office, and housing. Now, this is among the most densely used part of Seattle, and increasing in density.

    We got the new park and the new location of the Museum of History and Industry, and so many businesses relocated or expanded to the area. It’s a huge win.

    I’m only quibbling, because you’re understating how well this all worked as a strategy. A lot of the time, a large privately held site is monolithic and grudgingly allows public access, if at all. By cooperating with the city, the business community, including Paul Allen’s massive Vulcan holdings and a number of other landlords and business owners, created a new part of town that seems great to live in, and which I visit (from my neighborhood a couple of miles away) all the time. And it’s become the anchor and soon hub for a new set of multimodal/intermodal transit options.