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Facebook Is Entering Into The World Of Real Estate 

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Facebook is currently planning to develop a community near its headquarters in Menlo Park, California. The property is set to have a supermarket, restaurants, shops, and a 193-room hotel. 

The company town will be known as Willow Village, and will contain over 1,700 apartments on site, including 320 more affordable units and 120 that will be set aside specifically for senior citizens. 

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Willow Village is being developed on a 59-acre site which currently stands as an industrial and research complex. Facebook is collaborating with Signature Development Group to create the space; the group is a Bay Area real estate developer known for creating spaces that combine commercial and residential spaces. 

The design for Willow Village is projected to be very community oriented and pedestrian friendly. It will have numerous bike trails, sidewalk space, and numerous public park spaces; including a quarter-mile elevated park meant to emulate the High Line in Manhattan, NYC.

The development will also contain a 1.25-million-square-foot office building that will include a massive glass-dome area known as the “collaboration area.” 

Facebook initially filed paperwork to redevelop the 59-acre site back in 2017, but were met with major resistance from residents in nearby neighborhoods who were worried about the traffic and housing prices that would be impacted. 

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In order to accommodate, Facebook created a blueprint that made Willow Village have 30% less office space to make room for 200 more apartments. It also agreed to prioritize construction of grocery stores and other retail options that any citizen can use, not just employees. 

“We’re deeply committed to being a good neighbor in Menlo Park. We listened to a wide range of feedback and the updated plan directly responds to community input,” said John Tenanes, Facebook’s VP of real estate.

Willow Village will not just be for Facebook employees. The City of Menlo Park is still currently reviewing Facebook’s proposal that would allow for prime residential access to the spaces in Willow Village, but it’s expected that the proposal will be approved in the coming weeks. 

The goal is to have as many Facebook employees as possible living in the village to allow for optimal business. The public aspect will also help the social media giant further grow because they now will have direct access to the individuals who use the platform every day. 

Silicon Valley Projected To See Rise In Commercial Real Estate Transactions This Year

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Silicon Valley is currently projected to be a hot market for commercial real estate development and transactions as the coronavirus slump in business begins to dissipate with the release of multiple vaccines and new health and safety protocols implemented by the new administration in the White House. 

The San Jose metropolitan area, defined as Santa Clara County, is known as the nation’s number one market for the future development of commercial office spaces. It’s also being looked at as an amazing market for retail and apartment development as well. This shift is likely going to be partially caused by a greater desire to leave the suburbs after the pandemic and get back to the hustle and bustle of city life. 

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The East Bay and San Francisco-San Mateo metro regions are also being seen as prime spots for future office, retail, and apartment development, according to a report published by CBRE, a commercial real estate firm. Senior Manager at CBRE’s Silicon Valley office, Mark Schmidt, recently discussed this projected rise with the media. 

“Companies appreciate that a San Jose-area location is accessible to a wide swath of top-tier talent and affords room to grow.” 

The report ranked which of the 50 major markets in the US offered the best potential development opportunities post-Covid. The report considered all property types – office, retail, multifamily, and industrial – as well as all contributing factors to cost, such as land and construction. Santa Clara County was ranked at number 17 nationwide for development opportunities.

The San Francisco-San Mateoregion was ranked at number 22 and the East Bay ranked at number 23. Santa Clara County is ranked as the best region for office development opportunities, according to CBRE’s data and report; the group ranked the area as number 1 out of 50 metro areas in the US. 

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The South Bay also trumped other major office markets such as New York City, Chicago, Seattle, and Austin. The East Bay was ranked at number 16 for industrial development opportunities, number 20 for office, number 21 for retail, and number 26 for multifamily opportunities. 

“The East Bay has benefited as the more affordable neighbor of San Francisco, with industry advantages in information technology, professional business services, and a sizable construction labor force.”

CBRE is projecting that “the San Jose metro area will have the fastest growing economy post-recession, driven by an unparalleled high-tech ecosystem that takes advantage of research universities, abundant capital, and a strong start-up and entrepreneurial culture. New commercial properties will require enhanced amenities. Developers are prioritizing new features that promote health and safety, tenant flexibility and ease of access in response to COVID-related concerns.”

Nationwide the hopeful end of the Covid-19 pandemic is expected to shift the way a lot of industries develop and expand in the future. Time will tell how accurate these projections actually are, but based on past economic data, the US’s real estate industry should do just fine this year.

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Silicon Valley Looks Set to Have Stricter Laws and Regulations Imposed

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Silicon Valley’s ability to operate without the confinements of the government’s regulations seems to be ending. Technology executives have been questioned at several hearings throughout 2019, with federal regulators instilling record fines of firms in the area. The lawmakers have declared action throughout 2020 on several issues including online privacy, competition, and bias as well as encryption.

American technology organizations including Facebook, Amazon, Google, and Apple are preparing for higher levels of federal scrutiny with Rep. Zoe Lofgren commenting that “as the internet companies matured without a lot of regulation, some issues have emerged where attention is needed.”

Lofgren, a Democrat who has been representing Silicon Valley since 1994 and introduced an online privacy bill, also acknowledged that she believes it is “fair enough to examine what kind of rules should be set in certain elements of the tech economy.”

It seems that Washington has been captivated not only with those in the technology industry, but also the companies that have increased economic growth. Not only did Washington seem to appreciate being connected with such a youthful and growing market, they also utilized them by creating new tools so they could reach their voters which in turn was essential for the political campaigning we have seen in recent years.

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However, the public are starting to react negatively to the way these companies are using their personal data and the government are threatening sanctions including fines when an organization violates their users’ privacy or if they attempt to curb their competition.

In the last year the Federal Trade Commission issued fines worth a staggering $5 billion to Facebook due to them “deceiving users about their ability to control the privacy of their personal information.” But Facebook were not the only company to be fined, with Google receiving a $170 million fine after they violated children’s privacy on YouTube, a company that Google also owns.

However, Americans could actually gain more control regarding their own online data, which would reduce the ability for companies to collect their information, with specified laws; including the ones that Lofgren has proposed. These laws would put limits on what companies can and cannot do with users data, and reduce the amount of advertising they can sell; specifically targeted advertising which currently keeps the internet free.

Both Republicans and Democrats have slammed the idea of “Big Tech” and it seems that the pressure will continue to increase throughout the next twelve months.

President and chief executive of the Silicon Valley Leadership Group – who represents the majority of the technology firms in the area – Carl Guardino commented:

“Whenever the word ‘Big’ is placed before your industry, it’s not a good thing. It’s now ‘Big Tech’ and you know it’s not used as a term of endearment.”

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It’s not just American users of the technology that can see issues, foreign users do too. Washington is currently threatening to disband large companies, such as Facebook, and Elizabeth Warren – a Democratic Party presidential candidate – is allegedly putting together a bill that would see the country’s rules regarding competition and antitrust become stricter.

There are also talks that the Federal Trade Commission is looking into whether they can stop further amalgamation of Instagram and Whatsapp by Facebook with the theory that if they can stop it now, they will be stopping the potential requirement to dismantle a social network giant in the future.

The potential dangers of the workings of the technology companies seem to have finally been seen by Washington and they have decided to make sure they stay in control of commerce and communications.

Open Markets Institute deals with antitrust issues and their director of enforcement strategy, Sally Hubbard, commented:

“The traction has definitely really intensified over the last year. There’s also just a growing awareness that these companies are causing a wide range of harms, whether it’s harms to our democracy, harms to innovation, harms to entrepreneurship. They are playing the game and controlling it, too.”

However, concern has been growing over the role China appears to be playing in advanced global communications, with many questioning if a country which is seen as authoritarian, can actually be trusted with our data. The American government has already warned other countries to stop working with Chinese companies, specifically the telecommunications leaders Huawei, who has seen their equipment being used to create 5G networks throughout the world.

It seems that these rules could be what is needed to ensure the safety of the people who currently go online. With 4.3 billion people around the world – and a further 900,000 joining the online community each day – it is important that Washington get this issue right as their new laws could not only determine the future of ‘Big Tech’ but also the future of the way we use online communication altogether.

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Is the Urban Millennial Lifestyle Sustainable?

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If you walk into any major urban center in America, you’re bound to find young people glued to their smartphones. But they’re not always just texting or checking up on social media — they’re also taking advantage of a wide range of lifestyle apps, which offer everything from ride-sharing services to online shopping to rewards for engaging with local businesses. Most of these apps, which are generally available cheaply or for free, are created by businesses started in Silicon Valley, where implementing a unique idea and cultivating an audience is often considered more important than generating profits. These consumer tech companies are generally funded by wealthy investors looking to capitalize on the explosion of technology present in the everyday lives of millennials, effectively subsidizing the products in question and enabling an artificially low cost for the consumer. But the venture capitalists who make this app-centric lifestyle possible are effectively placing a bet on the long-term financial viability of the innovative businesses they invest in, with potentially disastrous consequences for everyone involved.

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Any number of examples of these apps, produced by businesses that are not currently making a profit and perhaps never will, come to mind. Casper, a mattress company that operates online and ships compressed mattresses directly to customers’ homes, is expected to lose money this year, as are the tremendously popular Uber and Lyft ride-sharing platforms. DoorDash, a service that delivers food from a variety of eateries, is not profitable, and neither is Seated, which gives discounts to restaurant-goers. Perhaps most notably, the platform WeWork, a business that rents out office and living space to small businesses, recently attempted to go public, a disastrous decision that resulted in financial turmoil for the company after potential investors raised concerns about the company’s path to profitability and its’ CEOs questionable antics, which included smoking marijuana on a private jet and serving tequila shots to employees after discussing layoffs. Amidst this controversy, Adam Neumann stepped down from his role of CEO of the company, and WeWork’s future remains unclear.

In general, companies such as these provide non-essential goods and services, offering their customers convenience for an affordable price rather than the necessities of life. This convenience is made possible by technology, as smartphones are always connected to the internet and provide companies with information such as a user’s location and other details that are used in innovative ways. Nevertheless, they are built upon attractive and enticing ideas, which capture the attention of investors who rely upon their trust that the companies’ ingenuity and creativity will eventually lead them to make a profit.

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Ironically, the most popular online businesses tend to be the least profitable, in what is likely to come as a surprise to their millions of daily users. The well-known Blue Apron, for instance, spends roughly $460 to recruit each of their customers, despite making only around $400 on each customer, as they are likely to cancel their subscriptions after only a few months. As a result, investors quickly realized that the meal-kit company had no viable path to profitability, and the company’s valuation dropped by over 95% since they went public. Because Blue Apron refuses to increase the price of their services, they are unable to demonstrate value to investors, leading to serious financial problems for the company. While Blue Apron may be considered an extreme example, the underlying business model, wherein companies supported by venture capitalists reduce their prices in order to generate an audience, is prevalent throughout entire industries.

The artificially low prices of these new businesses perhaps explains the extremely-connected and online relationship millennials have with tech-savvy startups. But, as companies like WeWork and Blue Apron fail spectacularly despite their large audiences, business leaders are starting to take note. One of the solutions to this inherently problematic business model is simply to raise prices for services in an attempt to generate profits for increasingly impatient investors. But competition is fierce, and millennials are a fickle demographic. Companies that raise prices of services, even if just to break even, risk alienating their base of consumers, who may be drawn to particular products or services for their low prices rather than for their practicality. For instance, if a company that lets customers rent bicycles with their phones raises their prices, consumers may realize that it becomes more economically viable for them to simply purchase their own form of transportation. As income inequality rises and wages remain stagnant, particularly among the millennial class of workers, companies are faced with the difficult choice between continuing to operate at a loss by benefiting from increasingly-wary investors, and raising prices for non-essential goods and services that their consumer base may increasingly be unable to afford.