Facebook Purchased 56-Acre Menlo Park Site for Development
According to San Jose Mercury News, Facebook made it official by purchasing a massive 56-acre industrial park located to the south its headquarters in Menlo Park, California. According to reports, the company paid $400 million for the property from REIT Prologis, Inc.
Since 1998, Prologis has been the owner and manager of the park. Currently, there are 21 buildings at what is currently known as the Menlo Science & Technology Park, with the majority being flex and warehouse type buildings erected between 1950 and 1980.
Although Facebook obviously has plans in mind for the industrial park, the company has made no announcement as to what that will consist of or when construction might begin. The Menlo Park has tenants associated with biotechnology and light industrial but according to insiders, it is open to other developments such as a hotel, retail stores, and even residential housing.
Apparently, discussions about other possible sites were part of the visioning process that involved John Tenanes, head of real estate with Facebook.
Facebook moved its headquarters to the Menlo Park site in 2011 but it has first rights to over 200 more acres within the city. Included in this is office space designed by Frank Gehry of more than 433,000 square feet, coupled with a 10-acre park. If Facebook were to move its headquarters, that site is capable of accommodating up to 2,800 employees.
One of the main reasons that Facebook purchased the large Menlo Park now and why Prologis was so inclined to sell has to do with the increasing cost of land in this region of the San Francisco Bay. As stated in a press release by Michael Curless, chief investment officer with Prologis, increased pressures associated with urbanization and land constraints in certain markets to include Silicon Valley help support monetization of specific assets.
Site Development Plans
The conversion of the Menlo Park site took Prologis several years. The goal was to make the site better and increase its use. Curless added that finally, the company is thrilled to see all the efforts materialize but also create a solid foundation for redevelopment of this site at some point in the future.
While Facebook is a mega giant in the world of social media, Prologis is the largest developer and owner of industrial and warehouse real estate in the world. Curless said that Prologis will continue managing the property for Facebook.
By year-end 2014, Prologis was the owner of or had investments in projects totaling 590 million square feet, spread out across 21 different countries. Currently, over 4,700 customers lease space from this company, some within manufacturing, transportation, logistics, and retailer segments.
As far as immediate plans, there is no question that the new Menlo Park site provides Facebook with plenty of room to grow. Considering that Facebook has only been in existence for 11 years, this level of purchase is nothing less than impressive. Of course, along with potential new office space for the company, executive with Facebook agree they are in 100 percent support of development beyond clustered offices.