Exclusive: Facebook considers major office expansion into San Francisco

28 Jul

Exclusive: Facebook considers major office expansion into San Francisco

Facebook Inc. is considering opening its first San Francisco office, potentially bringing the Silicon Valley social media behemoth northward in a major shift of its real estate growth strategy, according to three real estate sources.

Sources said no specific deals have moved forward, but that Facebook (NASDAQ: FB) has indicated that it is contemplating leasing hundreds of thousands of square feet in the city. One source said that the company was planning to wait to pursue a deal until after the city’s Central SoMa Plan is approved, which is set to upzone the tech-filled neighborhood and could lead to the development of millions of square feet of new office space.

Facebook declined to comment. The company is already planning at least962,000 square feet of office development in Menlo Park for an estimated 6,550 new employees. It also bought its main headquarters at Menlo Park’s 1 Hacker Way for $202 million in January.

Sources stressed that the tech giant’s real estate plans in San Francisco are very preliminary and could end up being discarded in favor of more growth in Menlo Park. Facebook is currently Menlo Park’s largest employer with 6,068 employees, according to the city’s 2016-2017 budget. According to Business Times research, Facebook is the 14th largest employer overall in the Bay Area (excluding Santa Clara County).

A potential expansion would affirm San Francisco’s status as a global tech capital, not only for young startups, but also for one of the largest tech companies in the world. Facebook’s potential expansion could also ignite more backlash from critics who blame tech’s booming job growth for the Bay Area’s escalating rents and crowded highways, bridges and school systems.

Facebook’s Oculus Rift division already has a small office of 5,000 square feet at 524 2nd St. in San Francisco, but its parent company doesn’t have an office in the city. Oculus Rift was seeking an office expansion earlier this year, a source confirmed, but it hasn’t moved forward with a lease.

Source: San Francisco Business Times