Palo Alto, California – The 1031 Exchange is a valuable tool for every commercial real estate investor to accomplish Asset Preservation. The 1031 exchange rules allow commercial real estate investors to buy and sell their commercial property by following some simple rules in order to defer the payment of the Capital Gains tax. A practical safe harbor for most “Exchangers” is to use a “Qualified Intermediary.”
Our 1031 Exchange news today is from the great South Bay area, Silicon Valley. This 1031 Exchange news involves some big names in Silicon Valley and beyond. Facebook will be moving its corporate headquarters to the old Sun Microsystems campus in Menlo Park. Facebook is to acquire the former corporate campus of Sun Microsystems first. Facebook will then dive into a sale-leaseback with Deutsche Bank AG’s RREEF.
RREEF LLC is a commercial real estate asset manager for Deutsche Bank AG. RREEF LLC had represented their client, the Wisconsin State Investment Board, and bought the property from Oracle for approximately $100 million. We are not aware if Deutsche Bank AG’s RREEF was entered into a 1031 Exchange with this property. An commercial real estate investor has 45 days after the date that the relinquished property is transferred, so to properly identify potential 1031 replacement properties. The 1031 exchange must be completed by the date that is 180 days after the transfer of the relinquished property.
This division, RREEF is one of the world’s sizable commercial real estate investment managers, investing in commercial and residential property, and commercial real estate securities world wide. RREEF strives to develop successful client relationships with institutional investors, such as pension funds, insurance companies, sovereign wealth funds, endowments and foundations. This Deutsche Bank’s Asset Management division also manage money for retail and private client investors, specializing in servicing those client segment needs.
The commercial property was constructed between 1993 and 1995. The Silicon Valley investment property was the corporate headquarters for Sun Microsystems until it was acquired by Oracle. Facebook will rent the commercial property that is approximately one million square feet. This sale-leaseback property is a nine building campus. Facebook will enter into a 15-year sale-leaseback contract. Facebook worked diligently and has an option to purchase this net leased property in five years.
This was the largest net lease arrangement in Silicon Valley since 1991, back when Apple signed an a net lease agreement on approximately 865,021-square-feet. Facebook, one of the fast-growing companies, is moving their headquarters from Palo Alto, California. Facebook was looking for a space that they can grow into, taking care of their long-term business needs. This will also allow them to remain in the Silicon Valley area and be in an area that offers a “small-community feel.”
When this deal was wrapping up, Facebook acquired the adjacent commercial property. That commercial property is owned by an affiliate of car manufacturing Titan, Ford Motors. These two Menlo Park commercial properties are connected via an underground commuter tunnel. However Facebook has no current plans to develop that commercial property, and can use that for future growth of a joint venture (JV).
Facebook has agreed in their net lease property deal to foot the bill for remodeling the building, to suit its needs. Obviously, Facebook can afford this as they recently received a major investment worth approximately $1.5 billion. The general contractor who is currently renovating one of the newly acquired buildings is SC Builders Inc. of Sunnyvale, California.
The sale-leaseback property is located at 10 Network Circle, in Menlo Park, with 94025 as their zip code. The sale-leaseback property is situated on 57 acres. Facebook Employees will be able to move to the new corporate headquarters in waves. Facebook Employees could start as soon as June or July. The growing company, Facebook employs over 2,000 people. Currently, Facebook has approximately 1,400 of them are in the Palo Alto location. Facebook also has offices in 10 United States cities and a dozen international locations, including London, Tokyo and in Paris, France.
We can assist you with your search for 1031 Exchange Commercial Properties.
O’Reilly Commercial Realty LLC
Phone: (352) 237-2222