07 Nov What Silicon Valley Real Estate Boom Means for Global Mobility Managers
Silicon Valley has always been prime real estate, thanks to the sterling tech giants that have set up shop there. Yet it might be experiencing a new and perhaps more elevated resurgence, given the current real estate boom.
Global mobility managers and their assignees living in the Northern California area would do well to notice. The prices are rising, as both land that can be converted into office space, furnished apartments, and homes is intensifying its demand.
While the costs may appear daunting at first glance, any investment made by this time is estimated to pay off big time in the long run. The so-called bull market is expected to continue for at least a decade.
As Seeking Alpha cheekily phrases its forecast, “Anything you purchase now is going to make you look like a genius ten years down the road.”
The aforementioned tech giants are certainly not taking any chances, despite their formidable financial position.
As reported by Mercury News, Google recently made news when it bought the 267,000-square-feet Chesapeake Commons office complex in Sunnyvale. Once renovated and redesigned, the new office can accommodate about 1,300 new workers. Should the internet leader acquire more properties in the area, that number could double.
In their bid for more office space, some of these Silicon Valley stars are willing to make their investment not just in existing spaces, but in ones that are still being constructed. The East Bay Times labels this particular trend pre-leasing.
For example, Facebook secured a deal with commercial realty firm Newman Knight Frank, allowing it to rent one million square feet in the Moffett Towers 2 complex in Sunnyvale — two years before any of its employees could even move in. The reason for the apparent delay: the complex is still being built.
This arrangement is far from unique. The pre-leasing trend emerged because demand for space is outstripping supply, and all parties, from property developer to client companies, have to be more creative in meeting their respective requirements. To date, Silicon Valley has seen 11.6 million square feet of office space leased. This is a significant increase compared to the 8.5 million square feet in 2017 and 2016.
More office space can mean more workers, and global mobility managers based near Silicon Valley or Northern California should leverage on this momentum to sharpen their research. They need to know which companies in the area are expanding, and how many employees they intend to hire in alignment with said expansion.
At the same time, they have to be able to craft a timeline that would enable them to anticipate the growing manpower needs of the area. Business growth as seen through this boom might also mean the growth of related industries.
Global mobility managers can make their future recruitment easier by putting in the loop their partners such as relocation companies, housing companies like California Corporate Housing, universities, and health centers.
One does not have to wait another 10 years to enjoy the benefits of this real estate boom. With careful planning, global mobility managers can anticipate the more positive consequences of the expansion and build a network or a supply chain that can make their assignees, present and potential, happy and productive.