Tech Companies Grow Node by Node; Campus May Be Thing of Past

Apple campus The Registry real estate Cupertino

| By Sharon Simonson |

Apple Inc. may rue the day it spent an estimated $3 billion to build its new mothership headquarters in Cupertino. Because, according to a globe-hopping futurist, big, bossy corporate headquarters are just so yesterday.

The successful global companies of the 21st century will no longer perceive and manifest their operations as a central office with much smaller, less powerful satellites scattered about. Instead, the headquarters will be “another node on the network” of global operations, said Mike Walsh, chief executive of Tomorrow, a global business consultancy.

“The future of the office is not a building; it is an ecosystem,” Walsh said.

Managers will be expected to move seamlessly from one office node to the next, working for several months in one location, their records and work materials secure in the cloud, then moving to the next country or timezone over.

Apple’s new Cupertino campus, an enormous ring with more than three million square feet under one roof plus various additional buildings and parking, is actually the product of corporate “hubris,” Walsh said. “They are saying, ‘Let’s get all of the smartest people in the world and put them at a stone’s throw from each other and have more collaborative collision,’” he said. “But it’s an old way of looking at things because innovation happens everywhere.”

If China is indeed expected to be Apple’s largest market long term, as Chief Executive Tim Cook said in early January, it begs the question, then, why the company is not building its flagship new campus there, Walsh said.

The traditional corporate headquarters built around hierarchy and notions of upper management and line workers is giving way in a global world. Nowhere is the trend more obvious than among the international technology companies for which the Bay Area is most famous.

It is common knowledge among commercial real estate professionals that the technology industry from smartphones and mobile gaming to social media and software has driven leasing markets nationwide. What is less understood is that across many of these markets, it is often the same companies at work, not to mention the same landlords and tenant preferences for funky real estate in quirky (some might say “authentic”) 24-hour neighborhoods and communities.

Driven by the search for tech talent and the specific flavor of that talent in each tech market, companies including Google Inc., Facebook Inc., Oracle Corp., Autodesk Inc. and Adobe Inc. may be headquartered in the Bay Area, but they are establishing company roots in diverse locations nationwide and internationally far beyond the traditional small sales offices.

Google epitomizes the trend. In 2010, Google paid $1.78 billion to buy a 2.9 million-square-foot building in New York’s former meatpacking district in the city’s tech-centric Midtown South submarket. They are occupying the building as tenants leave. The following year, the search-engine company spent more than $130 million “on grand 19th century digs in Paris,” according to The Economist magazine. All this even as it works to build a new headquarters in Mountain View and a second campus at NASA’s Moffett Research Park next door.

A best-selling author and citizen of the world, Walsh appeared as the keynote speaker Jan. 22 for the Cassidy Turley 2013 annual forecast event at the Hyatt Regency Embarcadero in San Francisco. Rather than focus on Bay Area real estate—standard fare for such events—besides Walsh the program included a panel with the real estate company’s top-ranking executives from New York and Boston, both major technology industry centers. Steve Hermann, Cassidy Turley’s executive managing director in Northern California, offered local perspective.

Walsh travels the globe unearthing emerging technologies and studying consumer behavior and fast-growth markets. His process includes basing himself serially in emerging countries. Currently, that locale is Turkey, a historic crossroads between East and West, the secular and religious, now considered a rising commercial market for its young and expanding population and emerging middle class.

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