Yes, exactly. My career started in Silicon Valley (Sun's Menlo Park campus -- now Facebook), but when we went to start a startup within Sun (Fishworks), we demanded that Sun lease space in the City for it. This had nothing to do with vacancy rates, and everything to do with the fact that all of us lived in the City and -- despite our love for CalTrain -- we wanted to be done with the Peninsula commute. (That we wanted space in the City was a huge emotional sticking point with Sun's executive management; Scott was exasperated that we refused to work in his million square feet of vacant office space in Santa Clara.)
A couple of kids later, I live in the East Bay and with casual carpool to the City, the commute's a breeze; at this point, I would only consider a job on the Peninsula (or, God forbid, the South Bay) if there were no alternative in the City. And to be honest, if I were looking for space now, I might give Oakland a serious look: with the expansion of Silicon Valley into San Francisco, Oakland is no longer the remote outpost it was -- and rents are cheap cheap cheap...