Facebook has entered into the residential real estate investment business. Accordingly, their presence has the ability to produce large profits for those looking to invest in the same areas. Commercial real estate, in particular, may receive a huge boost in respective areas. So what is the social networking giant up to now, what are the implications for the tech firm and how can individual real estate investors capitalize on it?
The Wall Street Journal acknowledged Facebook’s intentions to plan an expansion into constructing a 394 unit residential housing complex. This is clearly a resurgence in live-work communities, which we’ve been predicting here for a while.
At the end of the last housing boom, live-work was really taking off. Subsequently, it is poised to be a hot trend again. Some liken this trend to the ‘company town’ of the industrial and mining era, though this time it certainly comes with a high-end twist.
So what does Facebook’s version look like, what does it mean for the company, and how can you cash in?
Introducing Facebookville:
From a business perspective, Facebook’s proposed Menlo Park housing community is a smart move. It could help keep top talent, and certainly make some work harder to keep their jobs.
Some of the amenities listed in The Wall Street Journal coverage of the planned $120 million dollar project include: a café, store, pub, bike repair shop, pet spa, swimming pools, yoga facility and gym. That’s in addition to everything else the company already offers employees.
The implications of this move could be extremely positive for those already involved in the real estate industry. It adds diversity and additional income streams. It also offers passive wealth building opportunities that have the potential to become one of the most valuable parts of the company. It may also serve as an alternative exit strategy for when the tech bubble bursts.
So besides taking a risk of Facebook stocks, how else can real estate investors capitalize on this trend?
Live-Work in Silicon Valley and Beyond
The live-work trend is rebounding quickly from coast to coast. We have already seen it gain traction in areas from Doral, FL to New York, NY and San Francisco, CA.
Several real estate investment gurus have caught on to this trend. It is being found emanating from new tech hot spots, on the outskirts of sizzling urban centers and in the real estate markets rising from the dust of the foreclosure crisis.
There may still be some legacy ‘company towns.’ However, co-working offices have begun trending towards the work/life balance and developers are focusing on what authors recently called the demand for the ‘urban burb.’ Furthermore, investors are increasingly looking for these types of opportunities and keeping an eye on where businesses are migrating too.
There are many ways to capitalize on this trend, and none of them require gambling on Facebook stock:
Capitalizing on Live-Work for Individual Investors
So how can individual investors capitalize on the trend without investing in Facebook?
Those excited to be directly involved in this trend will find many commercial real estate opportunities; many of which are still available at attractive prices and can be transformed into live work communities.
However, it is important to understand the differences you will encounter going from a small single-family home investor to a commercial developer. It is a significant jump that requires an entirely different education to understand. Many may not choose it for the money, but for being a part of something bigger.
If commercial real estate wets your appetite, look for ways to collaborate. Leverage expertise and resources like working with local business owners, cities, mixed used property owners, builders, co-working spaces wanting to expand-move up and debt investors.
Despite your potential goal, there is a lot of money to be made from investing in commercial real estate around these live-work communities. If you are awarded the opportunity to invest in an area like Facebook’s Menlo Park, it may be the payday you have been looking for.
