Macy’s Shuttering Dot-Com HQ in SF, Expanding in AtlantaFebruary 4, 2020
While Macy’s is shuttering its 243,000-square-foot dot-com space at 680 Folsom Street in San Francisco, which is currently home to around 1,000 macys.com employees and contractors, the company isn’t reducing its ongoing investment in technology or focus on digital growth.
In fact, the company is actually planning to expand its tech presence in the Atlanta area, including the opening of a new office in Atlanta proper, “which will [now] serve as the primary technology hub for the company,” while consolidating and relocating the corporate functions of macys.com to New York City.
On a related note, keep in mind that Bay Area employment has really slowed its roll; more people left the greater Bay Area and San Francisco than migrated in last year, representing the first net negative migration in a decade; and the absorption of office space has slowed in San Francisco with office rents having hit a record high.
Comments from Plugged-In Readers
That space will be snapped up immediately.
I remember when that building was converted from the old modular brutalist facade. They did a nice job!
There are so many awful buildings that could use a upgrade like that.
Looks better for sure and I agree on the others… needing love
But the design here it still pretty dull .
Definitely. I think that old AAA headquarters was the worst one.
A few weeks back the Business Times had an article on a small start-up on Market Street that is relocating out of the SF. They need to increase their workforce significantly and can’t attract employees to SF for all the obvious reasons. Zuckerberg said last week he would not begin a start-up in the San Francisco Bay Area. Stripe is moving more than a thousand workers out of SF to SSF. And Macy’s almost a 1000 to Atlanta. Two things are going on – companies leaving SF for other Bay Area locations and, more problematic for the region’s future, companies leaving the Bay Area for other states. SF office rents are prohibitively expensive – even for tech companies. And building office space for 70K workers in SSF as two developments there are doing with no new housing to house those workers will compound the problem and send more companies out of the Bay Area as the housing situation worsens and people continue to leave the region or refuse to move to the region for a job opportunity.
Won’t building more office space for 70K workers lower the price of office space?
It depends. If more companies move out of SF as Stripe is doing to either Oyster Pointe or Baylands then office rents may actually go up some in SSF. They are much less in the SSF area than SF ($49 per sq ft or so compared to $79 in SF) that a drop, given everything, is not a given. Despite the massive amount of office space approved – more than 10 million feet..
Do you think there’s any relationship between the supply of office space and the price for office space?
The minute I saw this headline I knew Dave would be here talking about the end of the world for SF!
Cycles go up and down….SF Bay Area continues to thrive over the long bar.
So true about Dave.
Macy’s have been retrenching for years. This move is not a surprise. Yes, Atlanta is cheaper than SF and the Bay Area as a whole. Why pay an Engineer in SF 200k when you can get the same employee in Atlanta for 100k and do the same work.
It is actually a good thing that companies and people are moving out. It will take the pressure off commercial and housing rents/prices and they may move downward. Isn’t that what we want?
That’s kind of heartless. 1000 macys.com employees who call SF home now face a choice of losing their jobs or uprooting their families to move to Atlanta.
They’re only getting the opportunity to interview for their job in NYC or ATL…that’s how it reads in the statement made in the media.
I thought the same thing. Never mind that home sales are increasing YOY again and population is actually still increasing in the Bay Area albeit at a slower pace. He’s dead silent on posts with that type of info.
Macy’s has been declining for a long time. Its disappearance from SF won’t even make a blip in the Bay Area’s economy. Let know when Google closes up shop and we can talk about end of times around here.
While the pace of sales started ticking up at the end of last year on a year-over-year basis, having dropped in 2019 overall, keep in mind that December sales in 2018 were at 10 and 11-year lows in San Francisco and the Bay Area, as were sales in January of 2019. In addition, the relative pace of new contract activity in the city has already started to slow.
And while the Bay Area population has ticked up to a record high of 7,796,235, driven by more babies having been born than residents that died, net migration just turned negative for the first time in a decade, representing a significant change in the trend.
Which is why the congressional seat California will lose after the 2020 census is expected to be a Bay Area seat. The state is barely growing and the Bay Area is growing even slower than the state as a whole.
Except, of course, this statement is an absolute falsehood, and the Bay Area has OUTpaced the rest of the state by about 40%. Or maybe you mean more recently – say b/w 2PM yesterday and 4PM today? Doesn’t matter: 2020 vs. 2010 is all that counts.
That is not how Congressional apportionment works. A state can gain population and still lose a seat. It’s all relativistic. And in a state like California with a redistricting commission, the potentially lost district doesn’t just get magically pulled out a specific area.
Why should San Francisco and the greater Bay Area hoard all of the of the technology investment? Yes, the employment and tax revenue is good to have, but these considerations also need to be balanced with the demands placed on our housing stock, infrastructure, and social fabric. There are plenty of other regions in the country that could use the kind of investment that these companies bring. We can afford to lose a few major employers – the fact that a few of them are choosing to set up shop elsewhere is not a sign that we are on the path to becoming Detroit.
Stripe is leaving because of Prop C. A gross receipts tax disproportionately impacts low margin businesses (payment processors like Stripe) and rewards high margin businesses (enterprise software like Salesforce). A charitable interpretation of Marc Benioff’s support for Prop C was that he cares about homelessness. An more realistic interpretation was that he knew it would push out some of the bigger startups, which would ultimately benefit Salesforce (less competition for employees, primarily).
I think that is a bit of a stretch. Companies that are so concerned about Prop. C. can do what Stripe is doing and move just a hairsbreadth away to Oakland or South San Francisco if they still want to very easily accessible by public transit (BART, etc.) and have access to talented employees and high quality and cheaper (than SF) office space. So, SalesForce still has to compete with these companies to recruit talent, etc. I know many talented individuals who live in SF and commute to high-paying jobs in the surrounding area (in fact, sometimes it is faster to commute out of the city than to simply go across town). If Stripe were truly were concerned with the issues of competition for employees and the high cost of doing business, they would follow Macy’s lead and move to Atlanta (or another less expensive tech center).
Simply underscores the fact that The City needs to add tens of thousands of housing units ASAP. As-of-right residential development similar to that in NYC would go a long way towards making this happen. SF has to accept the reality that it’s an economic powerhouse now – a major world city – and continuing to frustrate reasonable develpment will only lead to higher housing costs and the departure of more employers.
Agreed. Very happy to see Mayor Breed introduce a ballot prop to do just that (albeit for developments that include more than the required affordable %).
I wonder how much Macy’s market share in SF and the West Coast has diminished since online shopping became the norm? Also, since I moved here almost 25 years ago, the average income of SF households has increased a lot to the point that it no longer fits in Macy’s target range. I think it makes sense for Macy’s to move to where its buyers live. Tastes change.
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