Facebook Eyes Burlingame with 767,000 SQFT Lease at Kylli’s Burlingame Point Development

By Vladimir Bosanac

One of the most relevant companies in the world is also becoming the most relevant commercial tenant in the Bay Area. In a stunning revelation earlier this week, Facebook announced that it is in final discussions to lease up the entire 767,000 square feet at Kylli’s Burlingame Point development, a sprawling, 18.13-acre project on the shore of San Francisco Bay in the Peninsula city of Burlingame. The revelation came at a public hearing of the City of Burlingame Planning Commission, in which the company requested two amendments to the development to include a food service vendor and make some changes to the proposed transportation demand management plan.

The under-construction project located at 300 Airport Boulevard, designed by Gensler, would be home to the company’s Oculus group, Facebook said. Gensler has been closely working with Facebook for years now. It helped Facebook create a home at 1 Hacker Way in Menlo Park, where the company is based, and most recently also working with the social media’s Instagram team, which will be taking over the entire 432,000 square-foot commercial space at Jay Paul’s 181 Fremont Street building in San Francisco.

The expansion into San Francisco has been part of a 9-month concerted effort that the firm is making to reshape the region as its home base, understanding well that it has outgrown Menlo Park as its single headquarters location.

“Just in the course of the last nine months, we have been very thoughtful about understanding that we needed to grow outside of Menlo Park, and we wanted to do that in a strategic manner,” said Chris Hom, Facebook’s head of real estate and strategy planning, who presented the vision of the new campus at the Burlingame meeting. “We’ve taken down two significant sites in San Francisco, we have about a million square feet that we just signed in Fremont, another million square feet in Sunnyvale, 400,000 square feet in Mountain View, and again they all are representative of our willingness to expand our footprint.”

The leasing team represented by Cushman & Wakefield’s Mike Moran, executive managing director at the firm’s Burlingame office, and Clarke Funkhouser, executive director, has been working with Genzon and Kylli to land multiple tenants in the space, but the single tenant option, and Facebook in particular, is probably one of the best possible outcomes possible.

“We’re extremely excited that Facebook is considering Burlingame Point as the next corner stone to their footprint here in the San Francisco Bay Area. This will make for an exciting long term partnership between Facebook, Kylli, and the city of Burlingame! And it’s another testament to the intrinsic strength of the San Mateo County commercial real estate market,” said Moran.

The appeal of the Burlingame location is multifaceted. With the company expanding into San Francisco, this location is now the mid-point between its home in Menlo Park and the space the company occupies in San Francisco. Also, the Oculus group is spread throughout the globe, and proximity to San Francisco International Airport was another strong consideration, stated Hom.

Facebook’s Oculus team has been especially growing in the Puget Sound region, where Facebook has recently taken nearly a million square feet in the last 12 months spread across over a dozen buildings in Redmond, a suburb of Seattle and home to Microsoft. According to BuildZoom, a technology firm that tracks construction projects, Facebook has pulled over $88 million in building permits just in 2018 alone in eight of those buildings. That brings the total to over 180 permits, valued at over $106 million across eleven buildings since July of 2015.

But, the Burlingame office will have to overcome one more hurdle before everything is wrapped up. The transportation management plan, which was crafted in 2011, may be a little out of date given the changes the region has experienced since then. The city approved Facebook’s own transportation management plan for the space, understanding that the company has successfully managed their own transportation and commuter programs for years now and has the capacity and understanding to make a meaningful impact given today’s parameters.

The second item on the docket earlier this week had to do with a common area of approximately 2,500 square feet, which the city was hoping would be used in some way as a public benefit, perhaps even as a restaurant. Facebook brought in a proposal for Philz Coffee, which did not sit well with the Planning Commission initially. Those members felt that a coffee shop does not provide a rich enough experience for a broad swath of is citizens. Incredibly, over an hour of discussion ensued about how to fill that space, settling finally on a plan to allow a coffee shop in addition to some possible pop-up vendors that may include things like a kite shop, a bicycle repair outlet and such retailers.

Facebook will deliver a proposal to the commission members in the following weeks, hoping to overcome this final step and complete the lease, adding another outpost to its rich and growing commercial footprint in the region.

West Coast Commercial Real Estate News