27 replies to this topic

[orulz]

paletexan, on 02 February 2011 - 08:31 PM, said:

Maybe i am missing something obvious, but it seems uncommon for a software company to build a tower in a downtown area.  Most HQs are campuses in a suburban setting.  So why is Redhat different?

One exception that comes to mind is Adobe's office in downtown San Jose, CA (Silicon Valley).  But I can't really think of many other major software companies HQ'ed in a downtown core.

You hit the nail on the head as to why I'm skeptical that they would go downtown. I have to agree that it would be extremely unusual. However, they have stated that at least two sites downtown are in the running.

As ChiefJoJo said, since they currently lease from Craig Davis, it's somewhat likely they'll go with something else by Craig Davis to avoid a costly paydown of their current lease (expires in 2020). So yeah, that puts Charter Square in the running. But look at what Craig Davis is planning to build on Centennial Campus, right across the street from where RedHat is now: .

This is the first building of the planned Alliance Center. It is a 150,000 sf building. This combined with the 188,000 sf they currently lease at Centennial would more than meet their 300,000 sf needs. This would certainly be the easiest move for them, probably the least costly, and also the least risky for Craig Davis.

[DwnTwnRaleighGuy]

There is an article on Red Hat, located on TWC News 14 website. There is more talk on a possible relocation to downtown?

Sounds very positive! Not a slam dunk, but probably wanting to get the very best price? Red Hat is very hard to read…do we keep and expand our HQ’s on campus/very easy choice. Or do we go for the brass ring, cost will be more, but we will stand out more in the long run. Decisions, decisions! My other thought is that Red Hat is still working with the city for a downtown location with every possible incentive….and possible updated building site plan approval needed? Especially sense Red Hat says they will decide “in a few months”?

[Gard]

Red Hat confirms that they are focusing on downtown for a site:

http://www.newsobser...hat-snazzy.html

[Merboy]

Gard, on 17 February 2011 - 04:26 AM, said:

Red Hat confirms that they are focusing on downtown for a site:

http://www.newsobser...hat-snazzy.html

I think that's great. It looks like they're leaning towards Edison or Charter Square because of the parking issue. However it's a bit of a slap in the face for Red Hat to ask for more incentives after the city has already bent over backwards quite a bit to keep them here in the first place. I don't know if they were seriously considering moving to a different city or just teasing out some money (potentially 20 million apparently) but whatever, in the long run I'm sure it'll be better for Raleigh. At least they're here. I'd love for them to build a new tower.

[Subway Scoundrel]

Although I would hope for a DT tower, I just don't think it makes sense.   Per the few other comments,, why would a tech company move to a tower  (outside of Adobe which I have walked by multiple times).  Not sure of red hat's testing requirements, but the reason tech companies go to cheaper locales is first, the business model,  but more importantly, their companies require tons of test lab space. It just does not make sense to put that in an expensive tower.  Doing interoperability tests on every known hardware solution takes up a lot of space  Look at companies like Cisco or IBM in RTP.  Much of that space are secured labs.

Now, maybe Red hat is a different model but I have a hard time buying that they would go to a DT location.    I hope I am wrong.  And yes, I am a Tech Worker.

[Justin6882]

I thought Red Hat was more of a software company, not hardware?  Or am I wrong?-

Subway Scoundrel, on 18 February 2011 - 09:53 AM, said:

Although I would hope for a DT tower, I just don't think it makes sense.   Per the few other comments,, why would a tech company move to a tower  (outside of Adobe which I have walked by multiple times).  Not sure of red hat's testing requirements, but the reason tech companies go to cheaper locales is first, the business model,  but more importantly, their companies require tons of test lab space. It just does not make sense to put that in an expensive tower.  Doing interoperability tests on every known hardware solution takes up a lot of space  Look at companies like Cisco or IBM in RTP.  Much of that space are secured labs.

Now, maybe Red hat is a different model but I have a hard time buying that they would go to a DT location.    I hope I am wrong.  And yes, I am a Tech Worker.

[ChiefJoJo]

Subway Scoundrel, on 18 February 2011 - 09:53 AM, said:

Although I would hope for a DT tower, I just don't think it makes sense.   Per the few other comments,, why would a tech company move to a tower  (outside of Adobe which I have walked by multiple times).  Not sure of red hat's testing requirements, but the reason tech companies go to cheaper locales is first, the business model,  but more importantly, their companies require tons of test lab space. It just does not make sense to put that in an expensive tower.  Doing interoperability tests on every known hardware solution takes up a lot of space  Look at companies like Cisco or IBM in RTP.  Much of that space are secured labs.

Now, maybe Red hat is a different model but I have a hard time buying that they would go to a DT location.    I hope I am wrong.  And yes, I am a Tech Worker.

There are other factors that you did not mention, which I suspect are at play here.

I would guess that many of Red Hat's workers and potential talent is in the 22-35 age range, mostly made up of Gen X & Y.  There have been a number of polls out recently that show many in this age group would prefer to live and spend time in a walkable area.  This could be a downtown, or some other place that is not a traditional suburban setting (auto-oriented).  If Red Hat has done some assessment of their ability to attract this talent and found that they need to be in an urban location to remain competitive, this might explain the interest in the downtown location.

Also, the sites they are looking at downtown are all prominent sites, and a 20+ story tower would give them a boost in civic awareness that comes from building an office tower in the downtown area.  Just ask RBC about their move, and I'm sure they would point to advantages that result from an increased civic awareness of their brand.  Red Hat may be seeking the same thing... perhaps a big red hat logo perched on top of a 25 story tower?  How much is that worth?  I don't know, but I suspect the equation is changing as compared to where it was 10-15 years ago.  Just look at the vacancy rates in the region and you'll see downtown Raleigh office market is much stronger (about 9% vacant) than any other sub-market, especially the RTP/Morrisville area which is in the range of 30% vacant.

I'm still guessing Charter Square is #1 with Edison as my #2, especially given the timing issues Red Hat apparently has.  It's better for the city to have those long-planned proposals move ahead, rather than have a new site developed.  If Red Hat picks Charter and they need more space, I'm sure a redesign and a city council site plan approval would come in the blink of an eye, given the economic impact at stake.

[Gard]

Justin6882, on 18 February 2011 - 10:21 AM, said:

I thought Red Hat was more of a software company, not hardware?  Or am I wrong?-

What Subway is saying is that Red Hat, being a software company, typically needs to test its software on countless pieces of hardware and their configurations to work out interoperability issues.  Their business isn't hardware, but they need to make sure their software works with the hardware before it is released.  This means that they have to have adequate lab space to work this stuff out, in addition to any bugs that users discover later on.  In addition to that, Red Hat makes customized packages for companies with very specific hardware configurations, so they have to have room to replicate that configuration in a lab environment for design and testing of the custom package.