Apple Inc. (NASDAQ:AAPL), Facebook Inc (NASDAQ:FB) and Google Inc (NASDAQ:GOOGL), the biggest tech companies, are buying more land and paying premium prices to have enough space for their future expansions. A Wall Street Journal article reported on the news and discussed about the tech giants who are purchasing more properties to expand their businesses in future.
Big technology companies have been buying property aggressively in recent years. Last month, Facebook Inc (NASDAQ:FB) agreed to spend $395 million for Menlo Science and Technology Park, housing 21 warehouses and office buildings, which is located 30 miles southeast of San Francisco. Becoming the latest one among all of the others who are diving into this buying-land pool, the company is getting itself prepared to meet its future needs for space as it plans to grow further. Facebook Inc (NASDAQ:FB) is currently focusing on a Frank Gehry-designed office building located west of Menlo Science and Technology Park that will become its new headquarters on completion later this year.
“We’re going to grow over time. We just want to be prepared when that happens,” said John Tenanes, Head of Real Estate Facebook Inc.
Last year, Google Inc (NASDAQ:GOOGL) spent above $1 billion to purchase at least 19 properties in Silicon Valley including warehouses near its headquarters in Mountain View, Calif. and a 935,000-square-foot office portfolio in nearby Redwood City. According to Real Capital Analytics LLC which is a property-data firm, at whole, Google Inc (NASDAQ:GOOGL) has spent above $2.5 billion on property in that area since 2005. The company reported that it grew by about 5,800 employees worldwide in the last year to 53,600 total.
“Acquisitions are part of a broad strategy to meet the needs of the company’s growth over time,” a Google spokeswoman said.
As Apple Inc. (NASDAQ:AAPL) is expanding due to a need for more space, it is building a giant circular headquarters, a new building structure to complement its campus at 1 Infinite Loop which is referred to as the ‘Spaceship Campus’ because its design looks like a flying saucer. According to Real Capital, the company didn’t make any Silicon Valley purchases in year 2014 but Apple Inc. (NASDAQ:AAPL) was an active buyer over the past half a decade as it spent above $430 million on land in Cupertino, Calif.
“It’s a race for space. A lot of these companies are growing like crazy and the Silicon Valley and San Francisco markets are getting very tight. It is driven, by a very bullish view of the world,” said Jed Reagan, an office market Analyst at Green Street Advisors.
When companies grow and add more employees to their businesses and expand in more sectors or markets, they need to acquire more space to conduct their business functions and provide work and living space for their employees. With the passage of time, property becomes more expensive and so it’s better to grab more land as soon as a company plans to grow, to host business activities and to hold office workforce in near or reachable places in order to meet future demands of business expansion.
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