(BN) With $2,000 Bikes, Tech Firms Flee Suburbs for City Homes

Aug. 6 (Bloomberg) -- The artfully disheveled office of architect Primo Orpilla sits in San Francisco's South of Market neighborhood, where worn industrial buildings command stratospheric real-estate valuations because they're popular with the geek crowd.

Orpilla and his wife, Verda Alexander, run Studio O+A, which claims many of the high-tech companies moving into SOMA as clients. The architectural firm has caught the wave hitting San Francisco, long a laggard while suburban Silicon Valley dominated as home to technology companies.

"Tons of companies we've worked with, like Box.com and Samsung, have shed the Silicon Valley esthetic," said Orpilla. "In San Francisco you can walk out the door to your favorite coffee shop and work comfortably there."

In the dizzy days of the dot-com bubble, sports cars emblazoned with Starship Academy stickers were the emblems of geek chic. Now, Orpilla says, it's the one-speed bicycle known as a fixie that can cost as much as $2,000.

Software companies and app makers tap into the creative- industry energy of cities, where the talent they seek increasingly wants to live.

Consumer-review website Yelp Inc. is moving into seven floors that Studio O+A designed in a 1940s SOMA building once occupied by an electric utility. The remodeled space will be "almost industrial, almost raw," Orpilla said, a design-firm aesthetic that appeals to media-savvy tech companies. Twitter Inc. and Zynga Inc. have snapped up swaths of space in SOMA.

Brick Warehouse

Google Inc. paid $1.9 billion for a block-long 1932 brick warehouse in New York City, far from suburban office parks and sleek midtown towers. It's the company's largest facility outside the Mountain View headquarters, south of San Francisco. Amazon.com Inc. is growing at the edge of downtown Seattle. Research-driven companies crowd Cambridge, next to Boston, rather than spreading out along beltways.

In San Francisco, old industrial buildings with charmingly rusted fittings and steel windows that open have filled the bill but they are now scarce.

"These companies need to scale up in chunks of from 200,000 to as much as a million square feet," Orpilla said. "Spaces that size exist in the valley but are hard to find in the city."

Headquarters Site

Salesforce.com Inc., the biggest provider of online customer-management software, paid $278 million for a headquarters site on 14 acres close to SOMA. The Mexico City architecture firm Legorreta + Legorreta designed a 1.2-million- square-foot campus, featuring broad porches and shaded public courtyards opening to San Francisco Bay.

The company canceled the plan to build at the end of February, only four months after the land purchase, saying it needed to lease space fast rather than wait for the headquarters.

Skyscrapers would be the obvious solution since they were invented to house lots of people on scarce urban land. Agile, fast-growing companies don't like today's skyscrapers. They are looking for artisanal food and an informal, sociable workplace, not grand lobbies, endless rows of cubicles and wood-paneled smugness.

Silicon Valley is growing fast, too, and wants to bring urban amenities to the suburbs. In Menlo Park, the San Francisco-based architecture firm Gensler is refitting an isolated, dot-com-era complex of boxy pastel buildings for Facebook.

"We're creating an astonishing variety of social spaces inside the buildings that take their cues from urban places," said Randy Howder, Gensler's lead workplace strategist.

Green Features

Google has promised to build a headquarters with advanced green features amid the dozens of buildings it leases in Mountain View. But the setting, cut off from transit and urban amenities, can't duplicate the vibe of its New York City location.

Google has started and stopped the project, and won't comment on its current status.

The London architect Foster & Partners, a pioneer in low- energy design, has fitted out Apple's proposed flying-saucer headquarters in Cupertino with rooftop solar panels. This greenwash comes with a wall of parking along the Interstate 280 freeway for 10,000 cars. It's not fixie-friendly.

The siren song of downtown lures 21st-century business, but cities haven't yet figured out how to meld suburban advantages with urban energy. It's time some savvy designers and companies reinvented both the skyscraper and the office park.