(Bloomberg)—Facebook is constantly expanding in its Silicon Valley hometown of Menlo Park, Calif. Now it’s making a bigger push into San Francisco.
The social media giant reached a deal last week to take all the approximately 756,000 square feet of office space at the newly constructed Park Tower at Transbay, according to the asset management arm of MetLife, one of the building’s developers, along with Chicago’s John Buck Co. and Golub & Co.
It’s the second big step into the city for Facebook following an agreement last year at 181 Fremont, another new tower. “We look forward to joining the San Francisco community as we gradually grow into MetLife Investment Management’s Park Tower,” John Tenanes, Facebook’s vice president of global facilities and real estate, said in an emailed statement. “This new space will support our growing workforce as we continue to attract strong talent.”
Giant tech companies have been eager to lease offices in cities in recent years to recruit employees who want to live in urban areas, rather than requiring them to commute to a suburban campus. That’s fueled intense competition for large blocks of space in the new towers that are opening in cities such as San Francisco and Seattle.
Microsoft’s LinkedIn and Alphabet’s Google are among the firms that have taken space in San Francisco buildings, even though their headquarters are to the south in Silicon Valley. Facebook currently buses employees from all over the Bay Area to its Menlo Park campus, which is about 30 miles (48 kilometers) from San Francisco.
Smaller companies are increasingly finding it difficult to operate in the Bay Area, where Facebook and Google are snapping up office space, offering higher salaries to the best engineers and quickly jumping on the most lucrative product ideas.
San Francisco is one of the hardest office markets to find space, with a vacancy rate of just 7.6 percent at the end of the first quarter, Robert Sammons, head of Northern California research for broker Cushman & Wakefield, said in an interview earlier this week, after media reports of a possible deal.
“This tightens the market dramatically,” he said. “It’s the last big block of space that’ll be available until the early 2020s.”
The 43-floor Park Tower is just blocks from the San Francisco Ferry Building in the heart of the city’s South of Market neighborhood. The building was leased by Jones Lang LaSalle.
“Facebook has made remarkable strides in connecting and building communities all over the world,” said Joel Redmon, San Francisco-based managing director for MetLife Investment Management’s real-estate business. “We hope that Park Tower will help Facebook continue their mission and that their local presence will play an important role in building the local San Francisco community.”