Facebook IPO is Juicing Silicon Valley Real Estate Prices to Crazy Levels

The impending Facebook initial public offering is pushing already-expensive Silicon Valley real estate to frenetic new highs.

The two months prior to the IPO announcement saw only 840 sales in the region. In dramatic contrast, sales in the last two months have almost doubled to 1,531, according to Guy Wolcott, the co-founder and chief executive of the company behind real estate app HomeSnap.

It’s not just sales. The median sales price is up 15 percent in the same time period, and the number of million-dollar-plus prices is up a staggering 159 percent since the Facebook IPO announcement.

These bargains won’t last

While that’s not a conclusive cause-and-effect connection (there’s a lot more wealth in Silicon Valley besides Facebook stock), the rising real estate prices do indicate that something big is happening. Once the IPO happens and employees’ lock-up periods expire, prices will go even higher.

Housing prices in desirable areas of California’s tech hotbeds have always been high, especially in San Francisco, Palo Alto, Santa Clara, and Facebook’s hometown, Menlo Park.

But in the last two months Silly Valley is just getting plain ridiculous. Think $5.5 million for this fairly large but hardly palatial family home. Or $4 million for a six year old home in central Menlo Park. The built-in wine cellar will help you recover from the inevitable sticker shock.

Fortunately, Facebook employees have a lot of cash coming. As of last year, Facebook employees owned around 30 percent of the company, worth perhaps $25-$30 billion when the company goes public.

Until the company does go public, selling those shares is difficult, but not impossible, and many have been selling privately on secondary markets like Sharespost for years.

Once the IPO happens, the biggest winners will be the earliest employees, investors, and top executives. According to Who Owns Facebook, Sheryl Sandberg will cash in to the tune of $1.8 billion, former employees Chris Hughes and Matt Cohler will take home $850 and $680 million, respectively, and current employee Jeff Rothschild will also pocket $680 million.

But even employees who joined later should do fine: According to this Quora thread, the average Facebook employee will realize about $2 million in the IPO.

“Staggering” market conditions

According to Wolcott, the current doubling of home sales is “staggering,” and the prices are continuing to rise rapidly. “All indicators are saying this is a hot market,” Wolcott said today, “and it’s hotter the higher you go up the price scale.”

Wolcott knows these numbers because he’s the cofounder of Sawbuck, an online real estate service that competes with the likes of Trulia, Zillow, and Redfin. Eight weeks ago Sawbuck released HomeSnap: a mobile real estate app that Wolcott calls “Shazam for homes,” referencing the popular music identification service. With HomeSnap, you take a picture of a home, and get huge amounts of data: if it’s for sale, price, lot boundaries, school district, tax information.

In eight weeks, HomeSnap has been installed 115,000 times and been used to snap 175,000 homes. And Silicon Valley is one of the hottest locations. Tony Palo Alto is number one. Nearby Redwood City is number two, and Facebook hometown Menlo Park is not far behind at number 4. Could all those Facebook millionaires-in-waiting be scoping the goodies?

Source: Venture Beat, John Koetsier

If you would like to see these, or any other homes in Menlo Park, Atherton or Palo Alto, please give me a call at (650) 888-6628 or visit my website at www.barbaraslaton.com .


I specialize in Buying and Selling fine properties here in the heart of the Mid-Peninsula.

Why is Menlo Park playing so hard to get?

Most Towns Would Kill To Host Facebook. So Why Is Menlo Park Playing Hard to Get?

Source: David Paul Morris / Bloomberg via Getty Images

The Facebook Inc. 'like' logo is displayed on a sign at the entrance to company headquarters in Menlo Park, Calif.Attracted by the promise of jobs and tax revenue, most towns would offer significant economic incentives to attract a large corporate headquarters. But being the home base of a corporate giant like Facebook has its challenges, too. At least that’s the position leadership in the city of Menlo Park, Calif., are taking in asking the social media behemoth to consider compensating the city for some of the increased pressure the company’s expansion creates on civic services and the potential impacts it has on sales and property taxes. But Wharton real estate and finance professor Susan M. Wachter says the story is an example of the need to rethink city tax structures in an increasingly knowledge-based economy.

Three months ago, the rapidly expanding Facebook moved its headquarters from the Stanford Research Park in Palo Alto, Calif., to two sites in neighboring Menlo Park that formerly housed Sun Microsystems and Tyco Electronics. The social media company now wants to expand by building more office space at the former Sun campus, asking the city to nearly double the permitted employee count there from 3,600 to 6,600. A city study found that Facebook’s move will bring many benefits to the municipality, including $8 billion in construction spending and related jobs, new property taxes of $182,000 and sales taxes of up to $55,000 annually, according to the San Jose Mercury News.

But the expansion also creates potential stumbling blocks for the city. For one, Facebook’s online ad sales don’t bring in revenue from sales taxes. By contrast, the computers, components and other products produced by Sun Microsystems led to Menlo Park reaping sales taxes of up to $827,000 annually, or 15 times what it could get from Facebook, the Mercury News reported. The relatively high salaries paid to Facebook employees could increase the price of property in Menlo Park, but a California law called Proposition 13 will cap the property tax revenue the city could earn. Another worry expressed at recent city council meetings was that Facebook’s expansion will increase the pressure on civic services.

The story begs the question: Do cities need to revisit their incentives and job-creation programs in an increasingly knowledge-based economy? “There may indeed need to be a rethink of the reliance on sales taxes for goods as we move to more of a virtual world, where services are exchanged and knowledge is created,” Wachter notes. “The problem here is the reliance not on property taxes but on sales taxes.”

Facebook leadership has said the firm is willing to consider investing in some of the mitigating features city officials propose. Among them are payments to compensate for its relatively lower sales tax contributions, investments in affordable housing, and local bike trails and shuttle services to help alleviate traffic concerns. “Beyond that, it’s worth noting that Facebook didn’t go skulking around Silicon Valley demanding tax breaks or incentives,” San Jose Mercury News columnist Chris O’Brien wrote.

Wachter points out that it is not unusual for municipalities to negotiate with companies over the services and costs that will shouldered by the community and the revenue that will be brought in by the firm. Facebook’s proposed expansion could potentially benefit both Menlo Park residents and the company. “But there are costs that will be borne by Menlo Park and benefits that will accrue to Facebook,” she notes. “Thus, negotiations are in order.” An environmental impact assessment report due in late April is expected to help decide the course for Facebook’s expansion plans.

The debate over Facebook’s headquarters expansion underlines some ground realities as the virtual world advances, according to Wachter. “In the immaterial world of services that Facebook delivers, in the end, they deliver these services from real space,” she says. “Land and location matter.”


Call me at (650) 888-6628 to see quality homes in Atherton, Menlo Park and Palo Alto.

I specialize in fine homes in the Mid-Peninsula, Silicon Valley and Stanford vicinity.

Facebook Files for it's Long-awaited IPO

Now THIS should shake up the Real Estate market!!!

Call me at (650) 888-6628 to see quality homes in Atherton, Menlo Park and Palo Alto.



I specialize in fine properties in the Mid-Peninsula, Stanford and Silicon Valley area.

Atherton Apparently Not on Obama's Circuit, but Woodside May Be

Rumors that President Obama would be stopping by Atherton during his Bay Area visit today (Feb. 17) are apparently unfounded.

However, there are other reports that he might make a stop in Woodside. If so, that could result in the closing of parts of Interstate 280 near or during the rush hour.

The White House says the president is due to arrive at San Francisco International Airport at 5:45 p.m. and will meet with business leaders at 6:45 p.m. at an undisclosed private residence.

With respect to Atherton, Police Chief Mike Guerra said that no roads would be closed off in the town and no presidential visit is in the cards.

He said that, in connection with the president's visit, one police officer from Atherton's force would help staff a police unit in Redwood City or Millbrae as part of a mutual aid agreement with other Bay Area jurisdictions.

Below are the guests expected to dine with Obama tonight. Many are residents of Atherton or Woodside:

- John Doerr, partner, Kleiner Perkins Caufield & Byers
- Carol Bartz, president and CEO, Yahoo!
- John Chambers, CEO and chairman, Cisco Systems
- Dick Costolo, CEO, Twitter
- Larry Ellison, co-founder and CEO, Oracle
- Reed Hastings, CEO, NetFlix
- John Hennessy, president, Stanford University
- Steve Jobs, chairman and CEO, Apple
- Art Levinson, chairman and former CEO, Genentech
- Eric Schmidt, chairman and CEO, Google
- Steve Westly, managing partner and founder, The Westly Group
- Mark Zuckerberg, founder, president, and CEO, Facebook

Source: Almanac Online

Facebook friends Menlo Park

Facebook is moving and hiring

Source: BBC, dot.Maggie, Maggie Shiels
09:20 UK time, Wednesday, 9 February 2011

A year and a half after cutting the ribbon on its Palo Alto HQ, Facebook has just unveiled plans to quit that complex and move six miles up the road to Menlo Park to a home that will house the social network's expanding employee base.

With a workforce of around 2,000, two-thirds of which are in the Bay Area, Facebook is busting at the seams. That is very evident when you walk around the place with people always milling around, the cafeteria's always brimming with employees and the overcrowded car park.

The world's biggest social network, which celebrated its seventh birthday last week, is growing like a weed and predicts that this year will see their hiring department working overtime to fill new posts.

There are 3,700 parking spaces at the new campus and room for 3,600 people, reporters were told during a news conference to unveil the new premises. When questioned, David Ebersman, chief financial officer admitted the company is planning to "add people". While he refused to be drawn on precise figures he did say "Facebook is growing 50% a year in terms of headcount and our growth plan is to continue hiring in the Bay Area."

The new digs which were built between 1993 and 1995, was Sun's corporate HQ until Oracle bought it for $7.4bn in 2010. The campus takes up 57 acres, has nine sprawling buildings and totals about one million square feet.

Facebook said it has also purchased an adjacent 22-acre tract that is connected to its new campus by a tunnel for possible future development.

Facebook did not say how much this is all costing but said Menlo Park did not offer any tax breaks to entice the hot Silicon Valley company to its neighbourhood.

Borrone's is the Best Thing That Ever Happened to Menlo Park

Our beloved Cafe' Borrone now has it's very own Facebook page

Go to Facebook and Search for Borrone's and click on the tab to join.

Check it out at http://www.cafeborrone.com/

Call me at (650) 888-6628 if you would like to meet there for a coffee in the heart of Menlo Park!