The giant office landlord in San Francisco revealed on an earnings call last week that the parent company of Facebook and TikTok are looking for huge Bay Area office expansions.
Salesforce Tower and Embarcadero Center-owner Boston Properties’ CEO Owen Thomas said “Facebook is looking for 700,000 additional square feet. And ByteDance is searching for approximately 250,000 to 300,000 square feet” in Silicon Valley, as reported by San Francisco Chronicle. “These examples support our repeatedly stated position that tenants are committed to the office as their location of choice to collaborate, innovate and train, all critical for their long term success.”
The possible arrangements will help in the improvement of the economy and contradict the forecasts that the offices will die down due to remote work. The two companies will be the largest in the Bay Area since the COVID-19 outbreak if a deal will be reached.
Apple, as it anticipates the return of its employees to physical offices, has also leased around 700, 000 square feet in Sunnyvale over the summer. Meanwhile, Facebook’s parent company now named Meta has also leased some space in Fremont before the virus outbreak. It also plans a huge expansion named Willow Village in Menlo Park.
Thomas said Facebook is seeking the addition of 500,000 square feet in the South Lake Union neighborhood in Seattle.
“We are always evaluating our facilities and real estate needs but we don’t comment on rumors,” Facebook spokesperson Chloe Meyere said.
A real estate data group CoStar said that TikTok has recently secured a leasing space in Mountain View, but has not responded to questions related to real estate when asked.
A work-from-home arrangement is still adopted by most offices in the Bay Area, which impacted the economic growth of office leasing, as well as restaurant and retail spending in the region.
Around 8 million square feet of real estate in the Bay Area is owned by Boston Properties, as part of its more than 51 million square feet of property nationwide. Thomas said that 18 percent of tenants have reoccupied its properties in the Bay Area, far from the 52 percent recorded in New York.
“The urban downtown recovery in San Francisco continues to lag our other markets. Very few businesses have commenced their return to work, downtown streets remain quiet, much of the ground … remains closed and the city has had a very restrictive mask mandate,” Boston Properties president Doug Linde said in a phone conversation.
The delay of San Francisco’s recovery is blamed on the health restrictions and the eagerness of tech companies to retain its remote work.
“COVID has had the biggest impact on San Francisco of all the markets where we operate. And I think a lot of that has been the technology tenants in some ways, leading the way on work from home and second, the very restrictive COVID mandates that have been put in place. And the lifting of those mandates has lagged all of our other cities and that’s undoubtedly had an impact on the census data that I mentioned earlier,” Thomas said.
“That all being said, San Francisco remains arguably the technology capital of the world. It’s got the largest cluster of computer science workers certainly in the United States. And we believe in the long term recovery of the San Francisco market, but I do think it will lag our other markets.”