Why Tech Companies Love The City So Much

Google now has more than 4,000 employees and over 3.5 million square feet of office space in New York City alone – and it’s looking to expand even more.

According to The Wall Street Journal, Google plans to rent space in what used to be a marine terminal on the shore of the Hudson River. It didn’t say when exactly Google’s new office will open, as it’s still in early discussions.

The move is a clear sign of tech companies aggressively expanding in to the city.

In the past, tech companies built their office “campuses” in suburban areas, where rent was relatively cheaper. Now, they are now flocking to densely-populated metropolises. 

Take Dropbox, Twitter, Pinterest, and Salesforce, for example, which have all built their headquarters in downtown San Francisco. Samsung, too, is reported to have plans to open a 1 million square foot office space in New York City. In the Boston area, only 13% of open positions for software engineers were in suburban areas, while Cambridge and Boston accounted for 63% of the jobs.

Plus, there are thousands of new startups in San Francisco that’s driving up the rent like crazy.

The reason is quite simple: to attract more younger talent. The WSJ says more young workers in their 20s and early 30s live in cities these days compared to the past, making it a more desirable place to hire the highly-coveted millennial generation.

Also, companies believe the city environment creates more interactions and opportunities to exchange new ideas for its employees.

That doesn’t mean tech companies are totally abandoning the suburbs, the article points out. But there’s no denying that more and more tech companies are seeing the city as a more viable option for office space and for luring talent. 

In fact, for Salesforce founder and CEO Marc Benioff, having the head office in downtown San Francisco proved to be one of the deciding factors in convincing cofounder Parker Harris — 31 at the time — to join his venture back in 1999.

In his book, “Behind the Cloud,” Benioff writes Harris was sold on his idea only after learning about the office location:

“I also had a trump card: Parker wanted to be in San Francisco. Every day, he endured a long commute from his house in the city to the Saba offices in Redwood Shores. ‘I have the same problem,’ I told him. ‘Salesforce.com will be in the city.’ Parker was sold.”

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