By Michele Chandler

As its employee count in Silicon Valley swells, Facebook is drawing high-profile attention for its plans to build housing near the company’s corporate campus in Menlo Park. The social networking leader recently held a series of public information sessions about its proposal to replace an office park along Willow Road with a minimum of 1,500 housing units—including 225 affordable apartments.

“We want to develop a range of housing for everyone,” said Facebook spokesman Jamil Walker via email. “We are continuing to have conversations with the city of Menlo Park, our neighbors and housing experts on finding solutions to the housing crisis that benefit the community.” The move could also benefit Facebook employees, who reportedly receive a five-figure bonus if they live near the company’s campus.

These companies that are known for innovation are now putting their knowledge and skill set towards solving a placemaking problem

Search titan Google is moving forward with plans to build 5,000 homes on its property under an agreement approved in December by officials in Mountain View. In addition to a 600,000-square-foot o ffice building with stores and eateries, Google received approval to build 9,850 units of housing at the future North Bayshore complex. Developers including Sobrato have partnered with Google on the plan.

The tech firm’s vice president of real estate, Mark Golan, said in a statement that the company wants to North Bayshore to become a place where residents can “live, work, play and stay.”

As the region’s housing prices soar, other tech giants are exploring the potential of developments that include both work and residential space. “Housing affordability has become a critical issue companies are facing in the Bay Area in terms of their ability to attract and retain talent, and as an employer, we need to support the creation of additional housing near jobs and transit,” Jim Morgensen, vice president of Global Workplace Services for Mountain View-based LinkedIn told the Boston Society of Architects last fall.

Menlo Park, California

These efforts come as high living costs are impacting the ability of large tech firms to find employees, a development that “is starting to present real problems in their workforce,” said Benjamin Grant, urban design policy director at SPUR, the San Francisco Planning and Research Association, a non-profit research, education and advocacy group. “In the absence of public solutions that are adequate to these problems, they’re kind of stepping in and doing what they can do to tackle these problems.”

With big companies getting involved in finding solutions, there could be benefits beyond new housing in a region starved for alternatives, said Scott Knies, executive director of the San Jose Downtown Association. “These companies that are known for innovation are now putting their knowledge and skill set towards solving a placemaking problem,” he said, with efforts having the potential to ultimately result in new materials or design that lowers building costs. That way, said Knies, “different income levels can afford to buy and stay here [in the Bay Area.] That’s the goal.”

Against that backdrop, some private groups are increasing their focus on creating housing close to offices. Bishop Ranch in San Ramon, the San Leandro Tech Campus and San Jose’s Santana Row are recent examples of the trend.

The sprawling Bishop Ranch, for example, was established in 1978 and now contains offices for more than 600 companies, ranging from Chevron Corp. to Wells Fargo & Co. and Robert Half International, and together employ nearly 30,000 people. In 2014, the development hired the Paris-based Renzo Piano Building Workshop to add an upscale, walkable town center with luxury shopping, dining, a hotel—and housing, a first for the complex.

After finishing City Center Bishop Ranch by the end of 2018, the company will turn its focus to building the 478 apartments that have been approved for the center. No timeline has  been set for their construction, said Jeff Dodd, senior vice president of Sunset Development, the owner and operator of Bishop Ranch.

“The entitlement is in place, but we do need to process plans and get the project approvals for the design and so forth,” said Dodd. “We’re excited about the prospects of becoming a seven-day-a-week place with the residential on top of the retail, having more of a full community, as opposed to an office-centric environment.”

He anticipates that Bishop Ranch’s housing will cater to a wide range of potential residents, including employees of the complex who want to live close to work. The development will also serve the needs of companies that want to put up people who come into town for an extended period for work training or conferences, said Dodd. “With City Center here and all the jobs here and people trying to get off the highways and secure a place close to their employment…it would seem to make a lot of sense,” he added.

Residences are also coming to the San Leandro Tech Campus, a 1 million-square-foot mixed-used center that was developed by Westlake Urban and is located next to the San Leandro BART station.

In July 2017, the San Leandro City Council unanimously approved Westlake Urban’s proposed construction of a seven-story mixed-use building containing 197 market-rate apartments and ground-floor commercial space.

Mountain View, Ca. Googleplex – Google Headquarters

“Now, we just wait for them to come in for building permits,” which can happen any time during the two year period following the approval date, said Andrew Mogensen, planning manager with the City of San Leandro.

San Jose’s Santana Row has evolved into a mixed-use corporate campus from the opposite direction. Santana Row contained housing when it opened in 2002, ranging from luxury 3,800-square-foot townhomes to 700 square foot studio apartments. Some of those units were converted to condos and sold, giving Santana Row 834 condos and apartments today.

In 2004, Santana Row “tested the waters” for office space by converting some second-floor retail areas to office use, said Jeff Berkes, West Coast president of Santana Row owner Federal Realty. The company subsequently opened two dedicated office buildings. The newest, 500 Santana Row, was leased by tech firm Splunk in 2016.

Ten companies now have offices on Santana Row, including Federal Realty. With existing office space “virtually 100 percent leased all the time,” Berkes said a third office building is scheduled for completion at the end of this year. It will cover 290,000 square feet at 700 Santana Row.

More apartments are also planned for Santana Row, where the company recently submitted plans to expand a project approved in 2016 by the city of San Jose. On a three-acre site half a block away from 700 Santana Row, Federal Realty is looking to construct 300 apartments. Upon completion, the development will have achieved its goal of completing nearly 1,229 housing units, which the city of San Jose approved in September 2015, as part of its Santana Row Expansion Project Final Environmental Impact Report.

West Coast Commercial Real Estate News