By Sethena Leiker
Data Center Specialist
Senior Analyst – Specialty Practice Groups
Growing Like Geng Busters
Facebook’s humble beginnings are similar to many Silicon Valley startups. The company’s very first offices were located in a modest 3,000-sf class B office space on Geng Road in East Palo Alto. With a robust network of venture capitalists and a deep talent pool stocked with Stanford graduates, Palo Alto was an ideal trophy location to maximize success potential.
For years, the city of Palo Alto has enjoyed a reputation for nurturing young companies such as Google, Pinterest, Intuit and many others, and subsequently watching them take an accelerated rate of growth just outside its city limits. And Facebook did just that. After growing to 500,000 sf in Palo Alto, Facebook doubled down in Menlo Park in February of 2011, through a 1,022,000-sf acquisition of the Sun-Oracle campus for $81M. The very next day Facebook sold the campus to RREEF (now Deutsche Bank) for $200M, with a 15-year leaseback in place that increased the property value $119M in a period of 24 hours.
After that purchase, there was a two year pause in real estate transactions as executives focused on both the campus migration and its public offering in 2012. Following the successful IPO and rapid employment growth, construction began on the 435,000-sf West Campus across the street. In just the last year, the company’s employment base has expanded by 45%, according to Hoovers. To fulfill future growth, the social media company also completed two significant land grabs during the last six months.
In September 2014, Facebook purchased the TE Connectivity campus: 10-buildings totaling one-msf situated on 59 acres. TE Connectivity now has a leaseback agreement in place, however, the site is slated for future redevelopment.
Facebook Today: 3.5 Million Square Feet
In early February, 2015 Facebook purchased Menlo Science & Technology Park, a 1.1-msf 21-building campus sitting on 56 acres of what is purported to be Silicon Valley’s highest valued soil. The purchase price has been withheld, however and recent land values in Menlo Park have exceeded $500 per land square foot.
Facebook today controls 3.5 msf on 200 acres in one of the most prestigious cities in the United States.
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