Facebook Moving Headquarters To Menlo Park

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After months of rumors, Facebook confirmed Tuesday that is relocating to the former Sun campus in Menlo Park, Calif.

About 18 months after the grand opening of its current Palo Alto, Calif., office, the social media giant has outgrown its space, prompting a search for new headquarters that could house its current and anticipated employee base. The first group of about 500 Facebook staff will move into its new digs in June, Facebook announced.

Although it considered several other locations, the Sun campus was "far and away our first choice," said David Ebersman, Facebook's chief financial officer, in a press conference at Menlo Park City Hall.

Oracle acquired the 57-acre campus when it purchased Sun in 2009. RREEF, a real estate asset manager for Deutsche Bank and acting for its client, the Wisconsin State Investment Board, bought the property from Oracle for about $100 million, according to the San Francisco Chronicle.

The former Sun campus includes 11 buildings with up to 1 million square feet of office space that can accommodate 3,600 employees, said John Tenanes, Facebook's real estate director. Using Facebook's open-space design, the company believes it can house even more employees within the existing space, said Ebersman.

Facebook currently has about 2,000 employees worldwide. About two-thirds work out of the company's headquarters, and that headcount is expected to grow as the social networking giant continues to expand its membership base, explore new advertising and other revenue streams, and buy businesses, such as its 2010 acquisitions of Chai Labs and Hot Potato, taken over in part because of the smaller companies' in-house talent.

Facebook's new home features an amphitheater, basketball court, gym, and two cafes, which the company will renovate "in the Facebook way," Tenanes said.

Recently, Facebook also acquired two lots, totaling 22 acres, located adjacent to and connected with the Sun campus by a pedestrian tunnel, Tenanes said. Although Facebook does not have any immediate plans to extend the property, the company will include the parcels when it submits California-mandated environmental planning documents prior to making building changes at the main campus, he said.

"There are two buildings. They are vacant right now, but we see this as future flexibility for us," Tenanes said.

Facebook inked a 15-year lease from RREEF at about $1 per square foot, and has the option to buy in five years, published reports said. All employees will be relocated within the next year or so, according to Facebook, although the company's Palo Alto lease does not expire until 2013.

The Menlo Park local government celebrated the addition of a new business celebrity.

"What does Facebook do for Menlo Park? First, Facebook is Facebook, it's global and it's known everywhere," Menlo Park mayor Rich Cline told the San Jose Mercury News. "It's a dynamic company and it brings that dynamic brand to our town. We can logically draw the line that there are many companies that will find it promising to move near Facebook... That opportunity, for everybody who understands how businesses work, there's a long-term potential for Menlo Park to benefit for the years to come, and that's very exciting for us."

But some residents may not be as thrilled, Cline recognized. "We're going to have a debate," he said. "We're going to talk about what we can do, what we can't do, we're going to talk about traffic, we're going to talk about transit, we're going to talk about tax money, and we're going to talk about public benefit, and we're going to have a fight and it's going to be loud."

The Palo Alto community took pride in its role in Facebook's early years. After all, the area was the social media company's home since 2004, when Mark Zuckerberg moved to Palo Alto from Harvard.

"You can't recreate something that is now today so organic in Palo Alto," Pat Burt, a Palo Alto council member, told the Mercury News. "Facebook values it, but they couldn't find a million or two million square feet. Menlo Park realizes they're not offering that, but Facebook needs space."