Facebook, Silicon Valley Quietly Growing D.C. Office Footprint Amid Federal Scrutiny
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Facebook has the largest spotlight in Washington this week with its CEO, Mark Zuckerberg, testifying before Congress Tuesday and Wednesday. But the company’s D.C. office, like many Silicon Valley outposts in the nation’s capital, has remained largely in the shadows.
The social media giant more than tripled its D.C. footprint with a 73K SF lease at Terrell Place, where it moved in last quarter, according to Newmark Knight Frank’s Q1 office report and multiple sources who told Bisnow about the deal. It moved from a 20K SF office at 1299 Pennsylvania Ave. NW.
Zuckerberg’s company is not alone. The 10 Fortune 100 technology companies have doubled their collective D.C. office footprint over the last five years, according to JLL research, and now occupy a total of 330K SF.
Six of these companies occupy more than 30K SF, and those six have expanded by a total of 100K SF over the last 18 months. That figure does not include Yelp's new 53K SF office or any other tech company outside of the Fortune 100.
This growth has occurred under the radar, with none of the 10 largest companies publicly announcing their D.C. expansions. One D.C. tenant broker, who has represented tech companies but chose to remain anonymous because they do not authorize him to speak publicly, said Silicon Valley firms are more secretive than companies in other industries.
“They don’t want anyone to know where they are or what they’re doing or who’s in the office," the broker said. "It’s very tight to the vest. It’s pretty common across the board for big companies, but [tech companies] are pretty bad.”
Facebook has shunned publicity about its new D.C. office, located across from the Capital One Arena at one of the District's busiest intersections. The company has made no official announcement about the new space, and brokers and landlords signed nondisclosure agreements preventing them from speaking publicly about the deal, according to multiple sources. A Facebook spokesperson, reached by email, declined to comment.
The company appears to be ramping up its team in Washington as the federal government increases its scrutiny of Facebook. It is currently hiring 27 positions in D.C., according to Facebook Careers.
The open jobs include 11 in public policy, six in engineering, four in legal — including an associate general counsel for global trade compliance with expertise in sanctions — plus three in security, three in facilities and one in communications. Facebook currently has 203 employees in the D.C. Metro area, according to LinkedIn.
The growth of Facebook's D.C. presence follows a series of political issues that have drawn increased scrutiny from Congress. Facebook has been enmeshed in scandals involving fake news and Russian interference in the 2016 election, plus recent issues over the security of user data following the Cambridge Analytica revelations. Zuckerberg said at Wednesday's hearing that regulation of Facebook and other internet companies is "inevitable."
Two building permits were filed in December for interior renovations to office space on the seventh and 10th floor of Terrell Place that named Facebook in the description, the only available public records linking the tech company to its new office. One of the permits described a 5K SF kitchen in the space that seats 76 people.
Yelp, which also moved into a new office in Terrell Place last quarter, took the opposite approach to publicity. The company held an event with D.C. Mayor Muriel Bowser announcing the lease and has given reporters access to photograph the space.
The Terrell Place property, owned by Beacon Capital Partners, consists of three adjacent buildings at the corner of Seventh and F streets NW. The 11-story building at 650 F St. NW was built in 2003, the eight-story building at 575 Seventh St. NW was built in 1924 and the five-story south wing of the building was constructed in 1903.
The three have 425K SF of total office space, of which roughly 225K SF is currently available, according to Terrell Place’s website. Yelp's office is on the fifth floor of 575 Seventh and the seventh floor of 650 F. Its name appears on the directory in the building's lobby, while Facebook's does not.
The Yelp deal brought a new entrant to the D.C. office market, while Facebook’s lease represented an expansion of a company that already had a D.C. presence. Yelp’s office is also focused on sales and marketing, while most major tech companies' D.C. offices center around government relations. OTJ Architects Associate Elizabeth Long designed Yelp's space and also worked on Adobe's expanded office in Tysons, which she said was primarily a government relations office.
“Yelp has been communicating with the community because they’re bringing 400 new jobs to the city,” Long said. "But most tech groups’ presence is government-focused. That’s why you see less about their office space.”
San Francisco-based Yelp's D.C. office brings West Coast culture to the nation's capital with a beer keg, a pool table, air hockey and table tennis. Other Silicon Valley companies have not been as open about showing off their D.C. offices, but Long said their growth is starting to impact D.C.'s overall office culture.
"Everyone's doing that," Long said of the recreational space. "As soon as one company brought it, all the other ones follow suit. You see ranges of it. Some more conservative tech groups that aren't as familiar with the Silicon Valley way are taking a more light-handed approach, and groups like Yelp are very comfortable with a fun, playful environment sprinkled throughout the place."
Yelp's willingness to show off its D.C. digs makes it more of an exception than the rule when it comes to Silicon Valley tech companies and their D.C. offices.
Amazon has a D.C. office on the seventh and ninth floors of 601 New Jersey Ave. NW, according to a building permit filed in October and a CoStar listing, which said the company occupies roughly 44K SF. The e-commerce giant has ramped up its lobbying efforts in recent years over issues such as online sales tax. President Donald Trump has repeatedly attacked Amazon on Twitter over the last month, accusing it of scamming the U.S. Postal Service.
Snapchat has moved into 1399 New York Ave. NW, a source said, but has not publicized its office. Google expanded its D.C. office in 2013, signing on for 54K SF at 25 Massachusetts Ave. NW, but the company declined to comment to the Washington Post at the time. Twitter also moved in 2013 into an office at 1133 15th St. NW, but that was only made public through building permits for an interior renovation, not a company announcement.
D.C. government has worked to sell the city as a technology hub to diversify its economy away from reliance on the federal government. The District could make significant progress in shifting its image away from a government town if it wins the Amazon HQ2 competition. It is largely seen as a front-runner given that three of the area's jurisdictions were included in the 20-city shortlist.
"The District consistently ranks highly for its educated workforce and access to diverse thought leaders," said Chanda Washington, a spokesperson for the Deputy Mayor for Planning and Economic Development. "As a result, national companies are taking note and choosing D.C. We also remain focused on ensuring our startups and entrepreneurs can tap into that momentum and continue to make D.C. a place where companies of all scale can thrive."
The city has seen some growth from D.C.-based tech companies such as Blackboard, Mapbox and FiscalNote, but it appears most national tech giants still view the government as the primary reason to be in the District.