Amazon is Selling Its 29-Acre Bay Area Property as Return to Office Stalls (msn.com) 69
Amazon is "selling a vacant Bay Area office complex purchased about 16 months ago," reports Bloomberg, "the company's latest effort to unwind a pandemic-era expansion that left it with a surfeit of warehouses and employees."
Amazon in October 2021 paid $123 million for the 29-acre property in Milpitas, California, part of a strategy to lock up real estate near big cities that could be used for new warehouses and facilitate future growth.... Amazon is expected to take a loss on the sale of the Metro Corporate Center, according to one person familiar with the terms of the deal, who spoke on condition of anonymity....
Amazon last year began its biggest-ever round of job cuts that will ultimately affect 18,000 workers around the globe. The world's largest e-commerce company, which is scheduled to report earnings on Feb. 2, warned investors that fourth-quarter sales growth would be the slowest in its history.
SFGate writes that the possible sale "is indicative of broader trends in Bay Area corporate real estate, which has struggled with remote work, tech layoffs and broader economic shifts."
"According to a report by commercial real estate firm Kidder Mathews, direct office vacancies in San Francisco rose to more than 18.4% in the fourth quarter of 2022, while a Kastle Systems report found that office occupancy rates rose to 41.8%, just 1% higher than the rates in September 2022."
Amazon last year began its biggest-ever round of job cuts that will ultimately affect 18,000 workers around the globe. The world's largest e-commerce company, which is scheduled to report earnings on Feb. 2, warned investors that fourth-quarter sales growth would be the slowest in its history.
SFGate writes that the possible sale "is indicative of broader trends in Bay Area corporate real estate, which has struggled with remote work, tech layoffs and broader economic shifts."
"According to a report by commercial real estate firm Kidder Mathews, direct office vacancies in San Francisco rose to more than 18.4% in the fourth quarter of 2022, while a Kastle Systems report found that office occupancy rates rose to 41.8%, just 1% higher than the rates in September 2022."
Definitly return to office stalling... (Score:1, Interesting)
...and nothing to do with recent layoffs.
Unloading an unneeded building is just like unloading unneeded employees...just more cost cutting.
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Amazon never really had anyone move in there though, it's not a lack of "return" to office in this case. Not a terrible location either - behind Great Mall so it's walking distance from light rail and BART. I don't think Amazon really wants to pay anyone enough to afford rent in the nearby new apartments though :-)
Housing conversion best option (Score:4, Interesting)
I really think the best way forward for the massive amount of office space going empty is converting to some form of housing.
A big problem in many communities has been, that no-one wants new buildings around them so they seek to block new houses. It's understandable and slow/impossible to work around.
Well office buildings are already there, and basically functional for living - they just need internal retrofits to become good places to really live instead of work, and will not even result in construction noise in the area around them since it would all be internal.
Zoning issues alone may make this a hard change for lots of cities, but I really don't see what an alternative is for so many buildings that companies no longer want or need.
Re:Housing conversion best option (Score:5, Informative)
This has been done to death before. Commercial office buildings are a terrible idea to convert to living accommodation for many reasons. It's like taking an aircraft and turning it into a submarine. It would be cheaper to knock down and rebuild housing.
Re:Housing conversion best option (Score:5, Interesting)
It would be cheaper to knock down and rebuild housing.
It would be cheaper but not allowed.
Reworking the insides of buildings IS palatable to cities, no matter if it is more difficult.
It has indeed been talked about a lot before, with people coming around to it now - there was another Slashdot story on it a few weeks ago I think. It is feasible.
If you think about it logically, converting an office to housing means even LESS demand on existing plumbing and electrical facilities because of how much more space each person living there would be taking up compared to many workers that use to work in that same space.
It's obviously not the best idea but when all other ideas are impossible you go with the idea that is possible...
And what is your alternative for all this empty office space? Why do you think it will ever be used again? It will not be, so what then, just let these places sit vacant forever as the building slowly crumbles without anyone to pay for maintenance?
Maybe this is why SF looks the way it does in the Horizon: Forbidden West game - all of the overgrown buildings are not the passage of time but just how it will look in 30 years with 80% vacancy rate, and then it just kind of stayed the same after for thousands of years.
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I agree. Even if those conversions don't work great, it's still actually using the space. And cities, especially downtown where the tall office buildings are, badly need more housing.
If you think about it logically, converting an office to housing means even LESS demand on existing plumbing and electrical facilities because of how much more space each person living there would be taking up compared to many workers that use to work in that same space.
Offices use very little water; they pretty much just have toilets/sinks and sprinkler systems. Apartments have showers, washing machines, dishwashers, ... so you might have to either upgrade the plumbing (which if you're doing a major retrofit might not actually be that big a deal) or have larger apartments than you'd expect...
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Lots of homeless people living in the middle of downtown urban areas that could use the housing, no?
Re:Housing conversion best option (Score:5, Informative)
Of course, all the interior plumbing will have to be demolished and replaced (with the possible exception of storm drains). This would be needed for the conversion no matter what the capacities of the systems.
Office buildings take more electrical power per square foot than residential. But, of course, most of the electrical work in the building would still have to be demolished and replaced in order to accommodate the new layout and the changed loads.
This has been the biggest deal in my experience. We had to get a variance in a high rise conversion to allow occupancy with mechanical ventilation rather than operable windows, though the code has since been liberalized to allow what we did with the variance. And operable windows are a pain in a high rise, due to infiltration and exfiltration from the "stack effect" of warmer air rising. In a shorter building, though, replacing the windows to allow typical windows could be a more practical solution. However, in a building with a large footprint nobody would want to reside in an interior unit with no windows, and, in fact, it would often be against code if there were no windows at all.
Re:Housing conversion best option (Score:4, Insightful)
However, in a building with a large footprint nobody would want to reside in an interior unit with no windows, and, in fact, it would often be against code if there were no windows at all.
Plenty of the terminally online Slashdot/Reddit/Twitter regulars would. They have no use for sunlight, and usually cover their windows with blackout curtains they never open anyway. The space would even be code compliant as long as there was a secondary exit and adequate ventilation. People would gladly make this "sacrifice" especially if it meant cheaper rent and no need for window coverings.
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Do those people really exist? I mean, I've been reading Slashdot for decades, but I need natural light, and I go for a two hour run every day to get fresh air. There can't really be people who'd be happy in that situation.
Re: Housing conversion best option (Score:3)
In large, square buildings, could you break through the center of a few floors to make 3-4 story atriums or courtyards? These could have plants and trees to make them outdoorsy and LED lights overhead that mimic outdoor light (including dimming and changing color at dusk).
Then there'd be a ring of apartments around this on each floor, with some exterior windows and maybe some windows onto the courtyard. It would be synthetic, but would give some community space and some feeling of nature on both sides of th
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Former Bell Labs research facility: https://bell.works/new-jersey/... [bell.works]
Re: Housing conversion best option (Score:4, Informative)
Offices use very little water
Building systems requirements (and the underlying codes) usually allow for quite a bit of tennant flexibility. Building owners won't know in advance if one of their next tennants might be a restaurant or mrdical clinic. With all the added load that puts on water, sewer, air ventilation, etc. So the core systems are usually quite robust.
Re: Housing conversion best option (Score:2)
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The issue is the existing plumbing is limited, there are very restrooms in an office building, yet housing will need a lot of them at all points of the building. It is a complete plumbing overall. Still cheaper then demolishing and starting over but it is not an easy conversion.
External ("waste") plumbing also has to be considered. Additionally, "venting" of all additional water & waste systems has to be considered.
Modern day plumbing systems are based on the concept of "drain", "waste", "vent"...DWV. Do any part of that incorrectly and the entire system does not work right or work effectively.
Adding a lot of internal plumbing requires a lot of thought.
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Additionally, "venting" of all additional water & waste systems has to be considered.
It's not additional; it's a lower amount than it was designed for workers. So venting should already be far in excess of what is needed for apartments, where two people living are in the space formerly occupied by 10 workers.
Not as many people living as working. (Score:2)
That was already covered by my last response; converting plumbing to family units means that FEWER people will be using plumbing compared to the number of office workers it was designed for, because people living take up much more space per person than office workers. You can easily re-work plumbing in a floor, as long as water and draining capacity is there.
Worst case you limit the number of dwellings per floor to capacity of plumbing.
Also, there's no reason the units cannot simply continued to use shared
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I live in one of the most liberal cities in the US and old buildings are demolished, quite regularly.
Ok, but that's not San Francisco.
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Re: Housing conversion best option (Score:2)
Ok, but that's not San Francisco.
SF is full of faux liberals. Liberal until some homeless person parks a beater schoolbus/camper in front of their painted lady.
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Yeah but there are enough people who care about homelessness in SF that they are making real efforts to solve the problem.
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It would be cheaper to knock down and rebuild housing.
It would be cheaper but not allowed.
That's a political problem. Like the artificial scarcity caused by restrictive zoning regulations, this can be changed.
Re: Housing conversion best option (Score:2)
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If you think about it logically, converting an office to housing means even LESS demand on existing plumbing and electrical facilities
How do you figure? Take the office in which I work, for example. There are 150 people, and 2 bathrooms. For the purposes of easy math, let's say they converted that to 10 apartments. Unless you're planning some hellish communal bathroom setup, that's 10 new sets of water and sewer lines that that need to be run, and 10 new electrical runs, panels, etc.
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How is that possible? (Score:1)
Take the office in which I work, for example. There are 150 people, and 2 bathrooms.
I'm not sure where you are at, but in California for 150 people the building would need six bathrooms [ca.gov] - per sex!
And those bathrooms would get used WAY more frequently than any residential bathrooms.
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All the same arguments against converting office buildings could be made against converting old mill buildings, but mill conversion has been a successful business for decades now.
It's a bit like consulting; to be really profitable you figure out how to sell the same project to new customers over and over. The first mill conversion ever done must have been complicated and risky; but after a half dozen or so you'd be able to make that much more money on any given project because you'd have a playbook, and yo
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Depends on the buildings. Many offices are just in converted warehouses already. If they're not multistory it's not too bad to start over. But a 4+ story building without decent plumbing will need major rework. Most office buildings really are just shells - everything inside is convertible without too much effort; but a single heating/cooling system, a single water/electricity/sewage connection, etc. Trying to divide that into a dozen separate units is difficult or impractical. Also, will you have an
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I'm not so sure about that. Commercial buildings are generally set up so that the space can be easily re-configured. Demolition is amazingly expensive for large buildings in an urban setting. What is the point in tearing down the outer walls and frame just to build new outer walls and frame?
It's more like re-fitting a cargo plane for passenger service.
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It's hard to build good houses in many countries. Every developer just wants to ram in as many dwellings as possible into as small a space as possible. Office building conversions happen because they are cheap and the market is too overheated to care much about quality.
Re: Housing conversion best option (Score:2)
Re:Housing conversion best option (Score:4, Insightful)
I've been involved in the conversion of a couple of office buildings, one into condominiums and one into a hotel.
The interior spaces were basically gutted and all mechanical, electrical, and plumbing systems were replaced, in addition to a lot of the other trades' work. (well, actually, in the case of the hotel, the contractor suggested some "Value Engineering", i.e. cost-cutting, after the design was complete and we reused some of the mechanical systems, resulting in an unusual design for a hotel) It was expensive, but worth it in the downtown market at the time, and slightly cheaper than building from scratch in an area that is already fully built up.
It would not be cheaper in a place where land is available for building new, or for smaller existing buildings that could be easily demolished and replaced with larger buildings. In fact, though, in the case of the condominium, historical preservation requirements would not have allowed demolishing the building.
You can just tear it down (Score:2)
The problem isn't conversion, it's that housing is much, much less profitable than commercial real estate. So whoever buys the property is gonna want i
Re: You can just tear it down (Score:2)
the property owners are more likely going to sit on it until they can sell it as commercial property
Or until they go bankrupt and are forced to liquidate it. There is a much smaller market for commercial real estate now, and eventually some property owners will run out of money to pay the mortgage.
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Yes great point (Score:1)
It's a good idea. And the fact it undermines zoning is a feature, not a bug. Fuck zoning.
I was actually thinking along these same lines, but I figured my original post was already controversial enough. :-)
There isn't much choice thus far (Score:3)
As a side note for p
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This is not correct. Adaptive Reuse of buildings is done all the time. Downtown LA used to be all commercial up through the mid 2000s. Adaptive reuse of old garment industry buildings revitilized downtown, keeping in mind the california seizmic requirements. There just has to be a motivating factor (see profit). I know in California the main issue has just been strict beurocracy that just makes things close to impossible.
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Re: Housing conversion best option (Score:2)
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That would be a very San Francisco "solution".
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Zoning issues alone may make this a hard change for lots of cities, but I really don't see what an alternative is for so many buildings that companies no longer want or need.
The reason cities zone the land this way is because commercial real estate tends to be a source of revenue, while housing tends to be a drain of revenue (for sewer, power, roads, police, etc).
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Low density housing yes. But is the same true of apartment buildings?
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A big problem in many communities has been, that no-one wants new buildings around them so they seek to block new houses. It's understandable and slow/impossible to work around.
It's not about noise. They don't want new housing built because scarcity of housing raises the value of their homes. They can't rent out their second homes or even spare rooms for as much when there are move living spaces for people the shop around with. It's a classic case of "I have mine -- fuck you."
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Well, you don't want large multi-unit dense apartments coming in, or section 8 type housing brought into nice, safe single family dwelling areas...as that it usually increases crime and kills property values
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It's a nice idea but usually these buildings are laid out completely the wrong way for people to live in them. Think plumbing, ventilation, electrical, access, windows, etc etc. Usually totally wrong for a residential structure.
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It's better than living in the tent cities on the streets in those large urban cities....and it's right there where they currently are residing.
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Houston has had an excess of empty commercial space since way before corona, and since there are no zoning laws to speak of, I don't believe it is the main factor.
But at least we get to have some fun when the acetylene tank next door explodes and knocks your home off its foundation [abc13.com]. I was about 8 miles away (in a mostly empty office building) when that one blew. It wasn't storming, so I thought a drunk driver had ran into the ground floor.
Office *Stalls* ? (Score:5, Funny)
With ergonomic chairs and hay on the floor ?
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Freakin' ideal for Tesla, so if they don't ... (Score:1)
My townhouse is single-digit miles from that site and it is on one of my pre-retirement commutes and adjacent to several places where I do business, so I'm quite aware of it.
Given the configuration of the buildings (brand new industrial/warehouse, multi-story ceilings and wide-open space, giant parking lots with wide access to freeways) and the roads (fat road right past it and down to freeway, one turn, across overpass, and right past Tesla plant 1), it would be ideal if Tesla wanted to double the size of
Cancel that. I had it swapped with another site. (Score:3)
Oops. I had it confused with another site. This one is several miles away and kiddy-corner through the city. Might still be a bargain for Tesla, but nowhere as big or ideally located as the one I thought it was. B-b
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"Kitty-corner" :)
Thanks. I've had that wrong in my head since I was a kiddy, oh so many decades ago.
Yay! (Score:2)
Hopefully this is the start of more remote work... (Score:2, Interesting)
Traffic is painful here in the bay area, and unnecessary. The majority of these tech jobs can be, and should be done remotely. Of course management needs to be less lazy, if all management knows is, "The floggings will continue until moral improves" then remote work doesn't work.
Ipso Facto and to the point, Federal labor laws need to be changed to empower companies more in dealing with remote workers. At my company what I found was the majority of people were brought back only because their performance to
I'll take it if you can get it here in 2 days (Score:2)
Bid $2