Stanford, the Tech Company Landlord

Stanford has long been an investor in many tech companies through its endowment’s venture capital holdings, public company stakes and technology licensing. And many of its professors, students and drop-outs have generated tremendous value through their startups. But the university also extracts a toll out of the tech industry through its real estate holdings, as Fast Company diagrams in a recent article. Housing 150 companies including Facebook (which moved in last year and now occupies two large buildings), Skype (coming soon), Nokia Research (s NOK), VMware (s VMW) and Tesla (which is planning to build a factory) (s TSLA), Stanford Research Park covers 700 acres from California Avenue to Arastradero in Palo Alto, Calif. These companies rent their buildings from Stanford at a cost of millions of dollars a year.

Though some Stanford tenants like the tech law firm Wilson Sonsini and Hewlett-Packard (s HPQ) have been on Page Mill Road for what seems like forever, members of the adjoining residential neighborhood, College Terrace, have a special lack of fondness for the new kid in town, Facebook, which has taken up  (I know this because my mother lives there). The community complains vociferously about Facebook’s rumbling shuttle buses, and has persuaded the city to post 2-hour parking limits and issue a permit system to block employees’ cars from straying from the corporate lot.

If those companies had started just a few years earlier, they might have got a much better deal. My high school, Paly, is across the street from Stanford and just around the corner from the research park. The city bought the 30 acres that house the school from Stanford in 1919 for the nominal cost of $1 per acre.

Please see the disclosure about Facebook in my bio.