Is Facebook the new Google? In one respect, yes. Just like the ever-expanding search engine, Facebook is gobbling up prime Silicon Valley real estate, setting its sites on downtown Palo Alto's office space. In addition to their main offices at 156 University Avenue and 164 Hamilton Ave, they recently opened up a third office across the street at 151 University, and will expand into another building on Hamilton sometime this fall. Add to that its $600-a-month subsidy to employees who live within a mile of the office, and the company's affecting rents, too. With 300 employees, and more being hired, Facebook's expansion is no surprise. But most tech hacks, writing from the comfort of their San Francisco desks, have only noted the company's cultural impact. If you're a Peninsula dweller, it's hard to notice the physical — and economic — impact. Here's what the influx of fresh-faced Facebookers means to you.
Parking:: Parking has always been scarce in downtown Palo Alto and Facebook has not made that situation any easier. There is a six-to-eight week waiting list for parking passes issued by the city government, and, until a new employee receives that pass, he or she either parks in surrounding residential areas or moves the car every two hours. Chaotic, to say the least. Jim Merryman, Facebook's director of real estate, recently joked that parking tickets from Facebook employees were a boon to local economy" (PDF). It's no joke if you live there, however.
Residential rents: Every Facebook employee living within a mile of the offices receives a $600 monthly stipend. This subsidized housing program has unleashed a flood of demand on a fairly tight supply. When rooms or apartments come onto the rental market, they're quickly snatched up by employees eager to cash in on the extra pay. I saw this first-hand. I recently moved to San Francisco after three years of living in downtown Palo Alto, and the only interested parties I met who interviewed for the room were Facebook employees, one of whom ended up moving in to my old apartment.
Office rents:CB Richard Ellis, the commercial real-estate brokerage, doesn't track downtown Palo Alto specifically. But office rents on the Peninsula have jumped 13 percent last quarter and 39 percent over last year to an average of $43.20 per square foot per year. It's hard to imagine that Facebook, in its effort to stay in downtown Palo Alto, isn't paying a premium over the market — and squeezing out startups which can't pay the same rates.
Cafes:: When I last tried, I couldn't find a seat, or an electrical outlet, at Coupa Cafe, one of Palo Alto's Wi-Fi hotspots. I blame Facebookers for this, too. With Palo Alto's cafes and restaurants in walking distance of the office, they're crowding everyone else out. But it's not like I blame them. Palo Alto is Facebook's town now. The residents? They just live there.