Tech is at the center of California's $1.3 trillion economy, the ninth-largest on the planet. According to a report from Joint Venture: Silicon Valley Network, the area added 39,000 jobs last year -- 4,900 in the chip industry -- bringing the total to 1.35 million. Jeffrey Weil, senior vice president with Colliers International, with more than 25 years of experience working with tenants in the Bay Area, has seen a few cycles as Silicon Valley has climbed to the high-tech peak.
     "That peak came in March 2000," says Weil, "and it took a while for people to realize that. Santa Clara and San Francisco have stabilized or softened. Three million sq. ft. (278,700 sq. m.) of dot-com space has come back on the market."
     Even with space opening up, new space is coming online too. Catellus Development Corp. recently received approval to go ahead with an 8.3 million-sq.-ft. (771,000-sq.-m.) business park in Silicon Valley, called Pacific Commons. Despite Cisco's March decision to trim its payroll by 5,000 workers, it's building strategy remains on track (see the Site Selection cover story, November 2000 issue). Other high-tech players still snapping up leases and space include Genesys Telecommunications Laboratories, which has not only moved into 27,000 sq. ft. (2,500-sq. m.) in the East Bay area, but plans on adding 200,000 sq. ft. (18,600 sq. m.) to its operation in hometown San Francisco. In Union City, Calif., the fully leased Crossroads Technology Park was expected to be completely operational by spring, hosting five high-tech companies: Axon Instruments, Abaxis, Ariat International, Telogy and Questcor Pharmaceuticals. Such mixed-use spaces close to residential zones are becoming more popular to companies and employees tiring of both exorbitant square footage costs and the stress of the commute.
     For those reasons among others, the East Bay and Tri-Valley markets are expected to remain strong this year. Cisco, Sybase, PeopleSoft, Intel and Oracle are moving into the area. Currently there is 1.9 million sq. ft. (176,500 sq. m.) of office and R&D space under construction, with most of it pre-leased.
     The list goes on and on, rolling blackouts and quakes notwithstanding. Weil says people will keep on coming because they like the weather and culture tradeoff no matter what infrastructure problems they may face. The median price of an existing, single-family detached home in California in January was $246,380, and the Bay Area median price was an unbelievable $472,280. But Weil sees some relief in sight for the ridiculously high-priced housing market as well as the torturous commutes.
     "Now companies are moving closer to their employees," he relates. "In San Joaquin, 50,000 commuters a day come over the pass -- it's just a matter of time before there are office parks there."
     Of that Weil is certain, particularly as the New Economy matures. "There are still a lot of startups and a lot of e-commerce. That's the beauty of the Internet: what used to take 20 years to change then took six years, then three years, and it's getting faster and faster. The opportunity to find wealth through invention of a solid idea is there more than ever, as long as you can make a profit on it -- that's the difference now."
     As for the always-shifting labor pool, Weil says that even though the dot-coms are folding, he doesn't see people packing up and leaving. "One thing that you can't change is the great labor pool," he says. "People will pack their belongings to come here because they can ski and surf on the same day," he points out. "Some may go elsewhere, but I don't know if the brainpower is going to leave."
     Cisco is still riding high in Richardson, Texas, where the "Telecom Corridor" will see the company add up to 4,000 employees in the next few years as it plans to build six to eight buildings with 1.7 million sq. ft. (158,000 sq. m.) on 71 acres (29 ha.). "The Telecom Corridor is not only an exceptional geographic location, but offers knowledgeable high-tech and telecommunications-specific personnel, suppliers and manufacturing resources," noted Joe Bass, vice president and general manager of Cisco's optical networking group, at last year's groundbreaking.
     Hillwood Development Corp. is planning to build several "carrier hotels" with its new Teraspace Networks division, beginning with 1.1 million sq. ft. (102,000 sq. m.) at its Alliance development in Fort Worth, then moving on to Austin and Houston, Phoenix, and Denver. Fort Worth tenants include AT&T, UPS Logistics and Tech Data.
     As much as any town in the U.S., Cleveland illustrates the move from old-style industry to high-tech. That transition is currently illustrated by the one-million-sq.-ft. (93,000-sq.-m.) high-tech redevelopment project in the center city called Public Square Tech Center. An affiliate of Argent Ventures, which operates other telecom sites around the country, recently retained the design and engineering services of URS Corp. for the project, which is just ending its demolition phase. KeyBank currently occupies four floors, primarily with its data center operation, and the owners hope to attract Web-hosting firms, switch facilities and other data centers to fill out the space. One of the selling points, in this sudden era of energy awareness, is over 100 watts per sq. ft. and multiple fiber providers.