Facebook has long been planning to move its still-expanding workforce to an office park in a suburban pocket of Palo Alto next to Stanford University and out of bustling downtown Palo Alto. The move is beginning to happen now, it appears, as the company's real estate agent, Cornish & Carey, has been emailing out an announcement about Facebook offices for sub-lease. Although the ad, now circulating Silicon Valley inboxes, doesn't mention Facebook, you can see its headquarters at 164 Hamilton, as well as five of its satellite offices scattered around the area. Also, the colors on that ad are familiar.
Like PayPal and Google before it, Facebook is leaving room for new startups to come in and get a nice central location next to a lot of investors, law and accounting firms, restaurants, bars and more. Of course, it might take a while for these office spaces to fill because regional office rates are already down and vacancies are up. Rates could drop as much as 25 percent over the next year, according to one recent study. Few companies are expanding, while many are shrinking or going out of business. For what it's worth, VentureBeat frenemy blog TechCrunch has just moved into downtown Palo Alto -- due to "the wholesale destruction of the office rental market in Silicon Valley."
But as Cornish & Carey told SiliconBeat* recently, office space is still harder to come by than when the last bubble burst earlier this decade:
[P]hil Mahoney, with the commercial real estate firm Cornish & Carey, says the market may resemble a marshmellow but it is far from melting. Mahoney told the Mercury News there is a 16 percent vacancy rate in Class A commercial real estate versus 30 percent in the post-dot-com economic apocalypse. And, unlike, previous cycles of boom and bust, the industry managed not to overbuild. He says the upshot is that Class A space is still renting at roughly what it did in 2006.
So while Facebook grows up and moves a couple of miles across town, young startups (at least those who can afford prime real estate during a bad recession) can move in. For people who are seriously thinking about a move, I've left a message with the real estate firm asking for price quotes.
*SiliconBeat was the name of VentureBeat before company founder Matt Marshall went solo and adopted our name today; the Mercury News has since reconstituted the SiliconBeat name.