Red Hat to Build Downtown Tower?

[Justin6882]

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

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]

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]

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.