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Comment by Someone1234 | Hacker News Reader

- Letting employees work from home: -$0 (savings on building ownership, HVAC, security, extra staffing, power, etc).

- Opening a NYC office: $2.1B + upkeep.

Even ignoring the environmental impacts directly and for commuting, at what point are we allowed to suggest that senior management at these large companies acts in an irrationally impulsive way? Why aren't the shareholders flagging this?

It feels like Google are spending $2.1B here for an ego trip to contrast Apple's open plan "Apple Park." Microsoft almost looks modest by comparison for their boring looking Seattle offices (land value not withstanding). But why any tech company is opening new offices now is mind-boggling.

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They are not opening anything

"Google is already leasing the 1.3 million-square-foot waterfront building, a former freight terminal dubbed St. John’s Terminal, in the Hudson Square neighborhood. The company has an option to buy, which it said it plans to exercise in the first quarter of 2022."

> Why aren't the shareholders flagging this?

They probably agree that it's better to own the building you are currently leasing (as per the article) to reduce costs and get an additional gain from any appreciation. It's not really any different than if you were to purchase the house that you've been living in and renting for the last 10 years, saving a couple hundred bucks a month in the form of a low interest rate mortgage coupled with no property management company/expenses, and then being able to sell it later, capturing any gain in the process. It's a solid business move. Essentially free money and adding a nice big chunk of additional revenue when/if they sell with essentially no change in business. Something they wouldn't be able to do if they continued leasing.

> Letting employees work from home: -$0 (savings on building ownership, HVAC, security, extra staffing, power, etc).

I don't believe the article said anything about not letting employees work from home or forcing people to go to this office building or others in NYC. Yes, some employees will inevitably have to go into the office some of the time, but extrapolating an entire policy from a building purchase is a big leap.

> Even ignoring the environmental impacts directly and for commuting, at what point are we allowed to suggest that senior management at these large companies acts in an irrationally impulsive way? Why aren't the shareholders flagging this?

As other commenters have said, this is a rounding error on Alphabet's business, and real estate is relatively inconsequential in priority to managing its core businesses.

$2 billion for google is a rounding error

>Why aren't the shareholders flagging this?

Look how well the stock has done since IPO. I think management knows what it is doing

> Letting employees work from home: -$0

Are we sure this is true? It's easy to put $0 on a balance sheet under the real estate column. But there are certainly other costs (including opportunity costs).

It's certainly not, since Google employees receive(d?) a home office budget to buy office furniture and supplies. It's still probably cheaper than running an office, but far from $0.

Look at $GOOG's one-year performance versus its peers and I think you'll have the answer why shareholder aren't complaining.

Google is letting people work from home (in most orgs). But this isn't the majority of the company and Google is still hiring like crazy.

This is the thing. WFH at Google is an option now, but the uptake hasn't been as huge as people here might expect.

Even if most of your folks work from home you need a lot of square footage for gathering spaces, conference rooms, and phone booths when people do get together. (Which, they should when rates of infection get under control, because it’s key to remote productivity).

It’s also an asset on their books at this point and probably cheaper to own than to rent in the long run.

Most of us can't fathom how many employees companies like Google and Apple have.

Even if 70% (made up number) of Apple or Google or Microsoft employees work from home 100% of the time, they'd still all need multiple $2.1 Billion office spaces.

If you consider a typical Manhattan condo to cost $500,000 (in reality, probably higher), multiply that price by 2,000 employees and you've got a $1 billion space. I know it's flawed napkin math, but if that's anywhere near the ballpark, 2,000 is not a lot of employees in a single office for a company like Google.

Don't forget that real estate is also an investment vehicle. Even with upkeep and expenses (which are tax-advantaged for any business), large companies like Google have no problem becoming a landlord, and a company with a long-term strategy is going to consider NYC real estate to be a safe investment.

There are even some tech projects that require specialized hardware which are easier to do in the office/lab. Offices will never totally go away and you’re right that this space may seem big but it’s not that big in the scheme of google.

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