Dive Brief:
- The developer of Menlo Gateway, an eight-story, mixed-use office complex in Menlo Park, CA, has secured a $145 million loan to help finance the project, according to Commercial Property Executive.
- The loan originator for The Bohannon Cos. is Square Mile Capital Management, which issued a statement saying that Bohannon had an 80-year track-record of successful developments in the Silicon Valley area. The developer said a scarcity of office space in Menlo Park would benefit the project.
- In addition to the 210,000-square-foot office building, the 16-acre project will also include a 41,000-square-foot fitness center, a 250-room hotel, 500,000 square feet of office that will be phased in, LEED Gold certification and other green features.
Dive Insight:
Facebook's massive headquarters is also located in Menlo Park, and the social media giant had to do some serious negotiating with the city to get an approval for its nearly 1-million-square-foot planned expansion. In the end, the company agreed to provide the city and its residents with an impressive portfolio of benefits in exchange for 20-year development rights and a waiver of building height restrictions.
Those benefits include $430,000 in rent subsidies for five years for those deemed critical to the community but can't afford to live there, with teachers and police officers at the top of the list. The company will also kick in a $6.3 million affordable housing fee to fund the development of more residential units. Other contributions from Facebook include a $300,000 yearly fee to the city for 20 years, guaranteed yearly hotel taxes of $1.25 million, infrastructure improvements to ease congestion and stress on city systems, $60,000 a year to be used toward maintenance of a community pool and 10 years of scholarships worth $100,000 annually.
Office construction is expected to see strong growth this year, with Dodge Data & Analytics predicting a 10% jump in activity in the sector in 2017. Economists have said that corporate headquarters will likely drive a significant portion of that increase, as more firms look to consolidate their business into a central location.
