Facebook is getting plenty of negative attention from the media and investors, but they continue to expand their real estate in the Bay Area. This comes in the wake of ongoing issues with speculation that the company’s user growth may have hit a wall. However, that does not appear to be a concern for the real estate acquisitions side of the company.

“We continue to grow,” John Tenanes, the company’s head of facilities, said euphemistically of a recent Facebook real estate binge. Since the start of 2018, Facebook has signed agreements that could expand in the San Francisco Bay area. This would make it one of the most active leasers in the region, reported Bloomberg. Katerina Cheok, a market analyst with CoStar Group Inc, observed, “Facebook is either giving employees a ton of personal space, or they are looking for future hires.” The social media giant has actively been developing and redeveloping acres of land in Menlo Park since 2011. Analysts estimate that current plans indicate Facebook expects to employ as many as 35,000 people by the end of 2028. That would be more employees than Menlo Park currently has residents.

Advertising Dollars Will Make or Break Facebook’s Bay Area Plans

The key to making predictions about Facebook’s real estate activities lies within the success or failure of the company’s advertising. Newsfeed ads are a core profit-driver for the company. If revenue continues to slow, investors will likely pull back and shares will continue to fall. If the social media platform fails to stage a comeback at that point, it may find itself no longer in need of the massive physical space it currently appears to be commandeering.

However, according to Bloomberg analysts Noah Buhayer and Sarah Frier, the company likely evaluated these risks prior to the purchases. The two concluded that the greater risk is outgrowing their space.  Furthermore, Facebook is already hiring thousands of people to deal with safety and security in the wake of the 2016 presidential election and the ongoing discussions about whether or not other countries could have influenced the outcome using the social media platform.


Categories | Article | Market & Trends
  • Carole VanSickle Ellis

    Carole VanSickle Ellis serves as the news editor and COO of Self-Directed Investor (SDI) Society, a membership organization dedicated to the needs of self-directed investors interested in alternative investment vehicles, including real estate. Learn more at SelfDirected.org or reach Carole directly by emailing Carole@selfdirected.org.

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