Facebook’s Effect on the Appreciation of Menlo Park Housing
The Menlo Park housing market has been fairly consistently experiencing double-digit annual appreciation rates since 2011, as well as an astounding 69 percent overall appreciation since 2011. This should come as no surprise as the marked increase in housing value is tied to the evergrowing presence of Facebook within Menlo Park.
The amount of Menlo Park office space occupied by Facebook has been on an impressive growth trajectory since the social networking giant moved to the city. In 2011, Facebook began its Menlo Park operations, leasing approximately one million square feet of office space on 57 acres located at Willow Road that it just purchased in 2016. Prior to moving, Facebook purchased two nearby lots totaling 22 acres. Later, in June 2014, Facebook acquired 59 acres, and in February 2015, Facebook purchased an additional 56 acres with tentative plans to construct up to 2,000 new housing units for permanent employees and up to an additional 1,500 units for interns. In December 2015, Facebook announced yet another lease in Menlo Park of 210,000 square feet from Intuit. Facebook is now the largest landowner in Menlo Park’s Bayfront industrial area, owning approximately 200 acres.
Facebook’s exponentially growing property portfolio is aligned with the company’s increasing employee population. Since moving into Menlo Park, Facebook’s employee count has quintupled, from 2,127 in 2010 to 11,996 as of September 2015. In fact, the number of employees working at Facebook’s Menlo Park offices (approximately 5,500) may soon outnumber the residents of the adjacent Belle Haven neighborhood (approximately 5,647 residents). Facebook has approximately 1.6 million square feet of Menlo Park office space at its disposal, along with an additional 1.16 million square feet for various projects pending approval from the city.
Mark Zuckerberg has also taken amazing altruistic strides in giving back to the local community, including his $120 million pledge in 2014 to improve Bay Area public school systems. The first $5 million of this fund supported priorities in mid-Peninsula school districts, including the Ravenswood City and Redwood City School Districts. Additionally, Zuckerberg and his wife recently announced opening The Primary School (TPS), an integrated system for children of underprivileged families to access both personalized learning and health benefits. TPS will substantially benefit communities in need and act as a positive driver for Menlo Park as a whole.
Of course, Menlo Park’s housing market is closely tied to Facebook’s growing presence. The increase in Menlo Park’s median sales price is represented in the graph above.
The most minimal appreciation in the Menlo Park housing market occurred between 2010 and 2011, immediately before Facebook moved into the city. From 2011 to 2012, there was approximately 10 percent appreciation, which coincided with Facebook commencing business operations in the city in 2011. As the Facebook employee count continued to rise in 2012 and 2013, so too did housing values rise by approximately 14 percent between 2012 and 2013. Menlo Park had the most appreciation from 2013 to 2014 at approximately 24 percent, which not only is consistent with the steady increase in employees, but also corresponds with the Facebook purchase of 59 acres of land, the company’s largest land purchase to date. Not surprisingly, Menlo Park houses saw the most appreciation from 2012 to 2014, which correlates with Facebook stock more than doubling during that period.
Given the proven propensity of Facebook to successfully develop its business and workforce, combined with Zuckerberg’s extraordinary charitable efforts to improve schools in the area, the presence of Facebook is certain to bring about enduring and pervasive benefits to all city residents. As a result, Menlo Park should continue to see strong appreciation in the years to come.
