Redwood City is Growing Up.
It seems as if you can’t drive anywhere through downtown Redwood City these days without bumping into some sort of major commercial development project that’s in process. With no fewer than four different construction cranes that are towering over the horizon and cavernous underground garages being carved out, downtown Redwood City is on a development tear unlike anything we’ve seen in recent history. Between new upscale apartment complexes, high-end condominium/retail buildings, and simply commercial office space, downtown Redwood City is rapidly growing “up” right before our eyes.
And this development is not going unnoticed by Silicon Valley.
Redwood City is no stranger to hosting technology companies. One of the biggest tech giants in the world has its iconic glass towered headquarters in Redwood Shores, and a whole slew of start-ups are filling the office towers all around the Oracle mothership. Also, the Seaport Office Park is home to a number of tech companies including Dreamworks, and it’s looking very likely that one of the biggest tech companies on the planet will swallow up the majority of that office park very soon (more on that below.) As the tech-based economy continues to grow at a breakneck pace, companies are simply running out of office space in the traditional Silicon Valley locations and are starting to look at the mid-Peninsula as the next frontier.
Downtown is Hot.
Up until just recently, there has been no real magnet to draw tech companies to the west side of 101 in Redwood City. The integration of relatively large technology companies into urban downtown areas is far from commonplace in Silicon Valley. Anyone who works in technology knows what I’m talking about — with the exception of San Francisco, the vast majority of tech companies are located in business parks that are usually devoid of restaurants, bars, dry cleaners, and coffee shops. It’s the primary reason why companies such as Google and Facebook have pulled these amenities back onto their campuses and offer them for free (or heavily subsidize them.) Sure, it’s a hiring perk, but the real reason behind these benefits is w0rker productivity. Google in particular figured out that employees are at their working desks working for far more hours every week if they don’t have to drive all the way to downtown Mountain View to get lunch every day. Now, employee subsidized cafeterias are almost commonplace in larger tech firms.
Redwood City has spent the better part of the last decade painstakingly revitalizing its downtown area. The theater complex was genesis of the downtown rebirth, and now the remainder Broadway and the Courthouse Square is teeming with new restaurants, bars and specialty shops. It’s anything but the “Deadwood City” that I grew up in. Until just recently there has been only one ingredient from the formula that was missing from attracting technology companies to the Redwood City downtown — office space. And thanks to the brilliant foresight of the Redwood City planners, that missing ingredient will soon be filled.
Several tech start-ups have already “seen the light” with respect to what downtown Redwood City can offer. Evernote (one of my favorite apps) has their corporate headquarters toward the end of Walnut Street, and tech start-ups Turn Inc., and YuMe Inc. have also chosen downtown Redwood City as their headquarters for the reasons cited above.
Those developments alone are quite newsworthy for this part of the Peninsula. But two recent announcements have thrust Redwood City into the “big leagues” as an aspiring technology hub.
Box and Google…Coming Soon.
The only thing more eye-popping than the mere physical presence of the Crossing/900 building project that looms over the corner of Jefferson Avenue and Middlefield Road was the announcement that pre-IPO cloud storage company Box signed a lease to occupy all of both buildings. That would effectively bring all 1,100 employees under one roof, with room for ample expansion in the future. It was an aggressive move, but one that was lauded by those who understand what downtown Redwood City has to offer.
In another stunning development, it was recently announced that Google closed on the purchase of 6 of the towers in the Pacific Shores office complex at the end of Seaport Boulevard. While this doesn’t count as a “downtown” development, it exponentially raises Redwood City’s credibility as a technology hub, and will bring thousands of Google employees to the mid-Peninsula.
The Impact.
Will all of this development in Redwood City have an impact on the real estate market in San Carlos? Absolutely. First of all, it’s important to note that a significant chunk of the development that’s going on in downtown Redwood City is indeed housing – mostly in the form of mid-rise condos and apartments. For example, the old Mel’s Bowl on El Camino will soon be the home to The Lane on the Boulevard, an upscale 141-unit lease-only living facility. So clearly, developers have thought this through and are working to provide attractive housing for this incoming wave of tech workers who would like to shorten or avoid the unmanageable commutes that are now the norm in the valley. These options will certainly be attractive to the Millenials who want to live in a vibrant community that’s very close to their work, but who are perhaps not ready to commit to the responsibility of owning a single-family home just yet.
For all the rest, the net effect of this explosive growth is that it will bring many more well-educated and well-compensated professionals that much closer to San Carlos. The very qualities that have made San Carlos such an attractive zip code for technology professionals — great schools, vibrant downtown, and neighborly feel — will become even that much more attractive because of its close proximity to their new work address. Just look at what Google’s presence has done to real estate prices in Mountain View and Los Altos, and how Facebook blew apart the housing market in Menlo Park. It’s not a stretch to see the same thing happening to San Carlos in the near future, especially if the perceived discrepancy in the quality of their respective schools continues to cause buyers to eschew Redwood City in favor of San Carlos.
That’s obviously great news for people who already own a home in San Carlos, because this will simply push the demand for their homes and subsequent prices higher. But this should serve as a shot across the bow for buyers that are still hoping to land a 94070 address in the coming years. Their competition is about to get much stronger.
It’s already happening.
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