Goldman Sachs (GS.N) moved into Silicon Valley four years ago amid a fanfare of publicity, but now it is quietly packing its bags and heading back to San Francisco.
A spokeswoman for the bank confirmed plans to consolidate the northern California investment banking and wealth management operations outside the area, but said Goldman Sachs remains committed to companies in Menlo Park, the heart of the technology world located 35 miles south of San Francisco.
In February 1999, Goldman announced in a press release its presence in 48,000 square feet on famed Sand Hill Road. It opened its doors right next to rival Morgan Stanley (MWD.N), which set up shop in Menlo Park in 1994 and remains there.
"With this significant investment in staff and facilities in Silicon Valley, Goldman Sachs is demonstrating our commitment to the future growth and needs of our clients in the high technology industry," Goldman Sachs Chief Executive Henry Paulson said at the time.
Technology companies have floundered over the past two years, however, with many going belly-up and others scraping by at a fraction of the valuation they once were. Initial public offerings of technology stocks have practically vanished and merger deals have shrunk in size forcing most Wall Street banks to scale back drastically their West Coast operations.
Like many others, Goldman raked in lucrative advisory fees during the technology boom.
When Goldman Sachs moved in four years ago, it said it had a staff of about 90 employees, 70 of them in the investment banking division.
Sources now say more than 90 percent of the approximately 100 Menlo Park staffers are on their way to Goldman's San Francisco digs and that Goldman will keep just a tiny amount of space to hold occasional meetings in Menlo Park.
Not long after it moved into Menlo Park, Goldman planned a whopping expansion in nearby Palo Alto, leasing another 150,000 square feet that locals jokingly called the "Taj Mahal." Goldman never moved in and still is paying $12 million a year in rent for the space, according to a report last week in Investment Dealers Digest.
Sand Hill Road and the surrounding Palo Alto area once teemed with dreamers and financiers ready to back those dreams, but the region now is populated mostly by "For Rent" signs as the vacancy rate has skyrocketed. |
