Facebook Leases New 1 MSF HQ
February 9, 2011
By Barbra Murray, Contributing Editor
RREEF buys big and Facebook leases big. Acting on behalf of an institutional client, RREEF has purchased a 1.1 million square-foot office compound in Menlo Park, Calif., from Oracle America Inc. The sprawling Silicon Valley site was formerly home to Sun Microsystems Inc., but will now serve as the new headquarters for Facebook, which has entered a lease agreement with the new owner.
The nine-building campus, located at 1601 Willow Road about 30 miles south of San Francisco in San Mateo County, materialized over a two-year period commencing in 1993. Oracle came into possession of the asset in January 2010 when it officially completed its $7.4 billion buyout of Sun Microsystems.
A spokesperson for RREEF, which is the real estate investment management arm of Deutsche Bank’s Asset Management Division, told CPE that the company is not revealing any additional details about the acquisition transaction beyond the official press release. Brian McAuliffe, a managing director & RREEF Americas’ Head of Transactions, noted, “This off-market transaction underscores RREEF’s ability to identify and make attractive investments for our clients.”
RREEF is also keeping mum on the lease agreement with Facebook. The online social media company will be relocating from its current digs at Stanford Research Park in Palo Alto. With direct office vacancies totaling just 597,000 square feet, according to a fourth quarter report by commercial real estate services firm Cassidy Turley, the Palo Alto office market could not provide accommodations the size of the former Sun Microsystems campus. Silicon Valley as a whole, however, is another story. Saddled with an average vacancy rate of 17.1 percent, Silicon Valley is nowhere near full recovery, but sustained improvement is in the forecast. “Leasing activity will continue on its upward trajectory in 2011, with tech companies leading the way,” as per the Cassidy Turley report.