Facebook has announced that it will move into the former Oracle-Sun Microsystems headquarters in Menlo Park, California through a sale-leaseback transaction.
Oracle, the parent of Sun, still occupies the property that Facebook will enter into a lease 15-year lease with the option to purchase after five years.
The social network didn’t say whether this type of transaction resulted from Goldman Sachs’ advice, but surely the bank must have at least approved of the sale-leaseback as a way to minimize risk — especially considering that Facebook is actually buying adjacent properties as well.
Yes, Facebook is also buying real estate adjacent to the Oracle-Sun property, at 312 and 314 Constitution Drive, a 22-acre tract connected to the campus by an underground tunnel going under the Bayfront Expressway. The social network would use the additional property for possible expansion in the future.
The main campus has nine buildings that together can accommodate 3,600 people, and the company expects all Facebook employees now working in the San Francisco Bay Area will work in the new digs. The social network currently has about 1,400 staff in Palo Alto, 2,000 worldwide, and expects to hire more people at the current growth rate of about 50 percent a year.
Menlo Park Mayor Rich Cline called Facebook an “anchor tenant” in a press conference today. Some of the local enthusiasm about possible revenue influx into the suburb was tempered by Facebook saying that its renovation of the 57-acre property would include the addition of a mini-mall containing amenities that employees might need.
While the renovation is underway, Facebook employees will continue to occupy the Palo Alto campus, and that might last until 2012. The
The renovation of the site coincides with a larger plan by the city of Menlo Park to soup up the neighborhood that Facebook is moving into, which locals call the Bell Haven/Willow Business Area.
Readers, what do you think about the new announcement?