December 18, 2012
Salesforce Signs Deal To Occupy Entire 350 Mission Street Tower
As we first reported in October, the permits to demolish the existing four story Heald College building at 350 Mission Street and construct a 27-story office tower reaching 350 feet on the site have been issued with construction to start early next year.
Today, Salesforce announced it has signed a 14 year lease for the entire tower. In fact, the lease is not only for all 27 stories, but for 30 stories and 444,000 square feet should the developer get approval to construct an additional 3 stories on the site.
∙ 350 Mission Street: Permits Issued For 350-Foot Tower To Rise [SocketSite]
∙ Salesforce inks deal to occupy new San Francisco highrise [Business Times]
First Published: December 18, 2012 5:30 PM
Comments from "Plugged In" Readers
Wow - great news!
I expected Salesforce to pull something like this as soon as they cancelled their plans for a campus in Mission Bay.
This is great for downtown and SF as a whole. More large tech companies will surely follow suit, and the city will start winning over the big boys from little towns in the peninsula.
One thing I'm confused about is the additional 3 stories. Will the building be 3 stories higher, or will Salesforce lease an additional 3 stories somewhere else?
Posted by: OMN at December 18, 2012 5:58 PM
Great news indeed! Although I was also kinda expecting Salesforce to do something like this. :D
Posted by: MichaelG at December 18, 2012 6:00 PM
Never mind - just read the linked article. Adding 3 more stories is great!
Posted by: OMN at December 18, 2012 6:01 PM
I work next door at 45 Fremont and have been watching this development for some time. The notice of demolition permit came in the mail a few days ago and the building has been a hive of activity since then.
I will miss the expansive South Bay views, but look forward to this classy addition to the downtown scene.
Posted by: Patrick at December 18, 2012 6:14 PM
They can wait for this to be built, but not the planned colorful number in MBay?
Posted by: Invented at December 18, 2012 7:50 PM
I think Salesforce made a conscious decision to occupy space in the heart of the city instead of the pseudo-suburb that is Mission Bay.
Good for them.
Posted by: OMN at December 18, 2012 8:48 PM
Such great news. And three more floors to boot. Of the various proposals that were slowed a few years back, this was the one I was most looking forward to. Next, I'd like to see 535 back in action.
OMN - I have to agree. I know I'd much rather work downtown than down in Mission Bay.
Posted by: Turin at December 18, 2012 9:30 PM
Maybe one of those realtors who's so good at rendering-out wires that *are* there can erase those overhead Muni lines that *aren't* there anymore since the demise of the old Transbay Terminal? Would really clean up the view...
Posted by: OCDguy at December 18, 2012 11:45 PM
"More large tech companies will surely follow suit, and the city will start winning over the big boys from little towns in the peninsula."
Why would you think that's going to happen? Most tech companies are firmly entrenched in the Peninsula or further down in the South Bay. It's possible but highly unlikely.
Posted by: Willow at December 19, 2012 9:03 AM
"Why would you think that's going to happen? Most tech companies are firmly entrenched in the Peninsula or further down in the South Bay. It's possible but highly unlikely."
1. This is where employees want to live.
2. Our business tax structure is much more tech friendly now.
3. The commuter bus phenomenon is not going to last forever. It has always seemed like a quick fix/bandaid to a central problem for them.
Posted by: Craig at December 19, 2012 9:15 AM
Craig - I'm really skeptical that this is going to happen. If anything, tech companies are going to leave downtown SF due to the higher cost of leasing. Any northward migration from tech companies is wishful thinking.
Is our business tax structure that much more business friendly that it would be able to lure a large tech? I don't think so. If a company was looking at a strategic move they could get better deals in cities like Austin or Seattle.
Why can't the commuter bus phenomenon last forever? Google, Apple & co are flush with cash. For them it's a really minor cost of doing business.
Sorry but I can't disagree with you more...
Posted by: Willow at December 19, 2012 9:37 AM
Willow... If Google, Apple are flush with cash and the buses are a minor cost of doing business, couldn't the same be said for the difference in the cost of leasing offices in SF versus the Peninsula? In fact, Google, Microsoft, Apple and others already have significant office space in SF. From the employees I know that work for these companies, there is a strong demand to get located in SF instead of down south. That pressure can only lead to the expansion of their SF office space. And Salesforce is showing the way it is done. I am not saying Google is going to abandon their campus on the Peninsula, but I could certainly see them increasing their presence in the City, where there is a ton of talent that is growing increasingly weary of spending two hours a day on the road to end up in an (nice) office park.
Posted by: michaelinsf at December 19, 2012 9:52 AM
Great news for SF & SF. As for large, established companies moving to the city from the peninsula, I doubt it as well, but do see them opening a satellite office to take advantage of the talent they're looking for who live in the city. Google, Yahoo, and VMware are some current examples that I know of.
Posted by: Can't think of Cool Name at December 19, 2012 9:59 AM
Can you imagine how great it would be if Google and Facebook built their headquarters in downtown SF?
Posted by: futurist at December 19, 2012 10:08 AM
futurist - That would be awesome for SF! Something to supplement what remains of the finance/professional services. I think it would be great for Google and Facebook as well - and the Peninsula. Tens of thousands of workers should be at the nexus of our transportation network. If only we could convince Apple to drop the UFO concept ...
Posted by: michaelinsf at December 19, 2012 10:14 AM
Google already has office space on the Embarcadero. Demand by employees to work in that space (vs. MountainPoo) vastly outstrips availability.
Every headhunter in the Bay Area that I've spoken to says many in-demand 'knowledge workers' want to live & work in SF and hate riding the buses.
Which might explain why the tech companies mentioned above plus Zynga (until they go BK) and Twitter are in SF.
Just hope the Board of Supervisors don't tax/regulate the golden goose to death... and instead should plan the infrastructure (homeless crisis; nuke Muni and start over) to attract more business.
Posted by: my-three-cents at December 19, 2012 10:27 AM
"Every headhunter in the Bay Area that I've spoken to says many in-demand 'knowledge workers' want to live & work in SF and hate riding the buses".
Yeah yeah sure sure...still waiting for them smart boys to starting buying all the for sale lofts and condos south of market...where are they?
Posted by: Waiting at December 19, 2012 10:55 AM
Speaking from personal experience, employees at these companies want to work in SF. Some will leave their jobs in the suburbs if there is a viable alternative (Twitter, Square, Salesfoce, etc) in the city. That will put pressure on the big boys to open up more space downtown to retain their high-skilled workers.
Posted by: OMN at December 19, 2012 11:01 AM
"Google, Microsoft, Apple and others already have significant office space in SF."
@Willow: Where do Apple and Microsoft have offices in SF?
Posted by: loftlover at December 19, 2012 11:13 AM
loftlover: MS has offices at One Market. I don't know where Apple is -- I could be wrong about them having space in the City, but thought I had heard they secured a space near CalTrain a couple of years ago.
Posted by: michaelinsf at December 19, 2012 11:23 AM
"Yeah yeah sure sure...still waiting for them smart boys to starting buying all the for sale lofts and condos south of market...where are they?"
not a realtor. hate realtors. just a realist. rents across the city are skyhigh because of the tech boom. plain and simple.
Posted by: dahubbine at December 19, 2012 12:00 PM
Great news. Those types of jobs are the type any city would want in this day/age.
While I hope other bigs would move into SF, I don't have high hopes..just to engrained. But satellite and continued growth of smaller existing SF-based tech companies should continue the trend.
Posted by: DanRH at December 19, 2012 12:13 PM
I'm talking about headquarters, not just "significant" office space in downtown SF. And really, Google doesn't have very much space here.
And yes, Apple's headquarters, as an architectural statement is really about secrecy, fear and obsession about "losing control". Much the way Jobs lived his life.
Posted by: futurist at December 19, 2012 1:11 PM
"Yeah yeah sure sure...still waiting for them smart boys to starting buying all the for sale lofts and condos south of market...where are they?"
^Clownish + "2009 called and it wants your mentality back"
Like the loft market in south beach or soma has been bad this fall?
Clearly you're "waiting" for nothing. Rather you're chomping at the bit to say stuff even if it doesn't belong. Waiting? LOL. no, you missed it.
Posted by: Anew at December 19, 2012 1:47 PM
I'm in the camp that tech won't make a significant shift northward. And Salesforce is barely a tech company anyways. They're mostly a business play enabled by tech.
Sure there are plenty of tech workers who want to live in SF. But poll the people working down south and you'll find that far more have set their sights on Saratoga, Los Altos, Silver Creek, etc. as a home.
Posted by: The Milkshake of Despair at December 19, 2012 1:48 PM
Milkshake, it depends.
If they're under 27 and/or single, they want to be in SF. Otherwise, you're right, many of them prefer living down south.
The big tech companies, while on average slightly older in average employee age than startups are, still have a ton of people in sales and junior engineering positions who would rather live and work in SF than the peninsula.
Posted by: OMN at December 19, 2012 2:09 PM
Fact is a ton of people in SF take those commuter buses, drive or take Caltrain to the peninsula on a daily basis. And many (most?) of them would leave their jobs in a nanosecond for a similar paying job that didn't involve a 2+ hour commute on a daily basis.
Posted by: anon at December 19, 2012 2:20 PM
OMN - I suspect you inserted a ">" into your text which will get interpreted as HTML, causing the rest of the paragraph to become invisible. Try using > instead.
But back to the topic, yeah, there's definitely a trend towards urban living. And it is a nationwide trend that has seems to have started up sometime in the mid 90s. If it continues there's no way that SF alone can accommodate the demand. In that case I'd expect new urban density to start springing up in about twenty locations around the bay to soak up the demand. It has already begun in some places.
But that trend towards urban living could also level off or reverse. Personally I hope the trend doesn't abate because I prefer urban areas and think that they are more healthy for the economy and environment and more fun as well.
Posted by: The Milkshake of Despair at December 19, 2012 2:26 PM
As a non techie, on a non techie salary, I wish Salesforce were elsewhere It will make everything even more expensive. Oh well.
Posted by: tech speck at December 19, 2012 2:35 PM
Wouldnt it just be better if SF had no industry so it would be cheaper to live here? SMH
Posted by: Joe at December 19, 2012 3:17 PM
There's no doubt that a lot of SV worker bees would prefer to be up in the city. But there are really no compelling business drivers at this time to suggest therefore that a major tech company is going to uproot itself and head for downtown SF. Besides the C level decision makers, the entire VC community, as well as the Stanford set are not leaving the Peninsula any time soon. These are the people who make all the decisions and they are quite happy where they are.
Posted by: Willow at December 19, 2012 3:38 PM
@Willow, where you hiding in the last few years? Lot's of tech companies are starting or moving to San Francisco. Just last week we have Lithium Technologies announce their move.
About other big tech companies with a presence in San Francisco, Microsoft is in Westfield Mall. Their old dig in One Market is probably gobbled up by Salesforce. Google is in Hills Plaza and reportedly plan for big expansion. Another big tech brand name is Amazon. Now that they are paying sales tax all of their "subsidiaries" in the city can finally come out of the closet and perhaps will be finding a large space to consolidate. Other big companies I can think of are Autodesk and Adobe. I don't believe Apple has a presence in San Francisco though.
Posted by: Wai Yip Tung at December 19, 2012 3:46 PM
Ok... so I agree, I don't think Google is going to move its HQ to San Francisco. But they do have 330,000 square feet in San Francisco. The entire new Salesforce building referenced in this article is 444,000. I would still call 330K pretty significant, even if it is only occupied by (generally well-paid) worker bees. And they just finished their latest expansion.
Those VC folks make it to SF pretty often on their own. Just ask anyone attempting a start-up.
Posted by: michaelinsf at December 19, 2012 3:46 PM
@Willow, good thing that you mentioned VCs. They are also coming to San Francisco. I can't explain it better than Benchmark Capital's very own article.
Posted by: Wai Yip Tung at December 19, 2012 3:54 PM
" . . . Salesforce is barely a tech company anyways. They're mostly a business play enabled by tech."
I don't work for (nor own stock in) Salesforce but if you consider anything having to do with cloud-enabled services (a.k.a. SaaS) for the enterprise as 'tech,' Salesforce is one of the recognized leaders in the space (along with Google, Amazon/AWS, and MS).
Posted by: sfjhawk at December 19, 2012 4:03 PM
W-Yip: Established tech companies and the associated players are always going to have a presence in SF. That's not in question. Are there exceptions like Lithium? Absolutely. (BTW, Lithium are based in Emeryville which is a somewhat different dynamic than the Peninsula.)
Is big tech going to move HQ to SF? Unlikely. (Although Prop E will probably help attract lots of start ups...)
Posted by: Willow at December 19, 2012 4:45 PM
Google has 330,000 square feet in the City, not exactly insignificant. I agree they aren't about to move their HQ here, but 330K houses a lot of those highly-paid worker bees.
Posted by: michaelinsf at December 19, 2012 4:50 PM
As one of those tech workers who rides a shuttle to South Bay every day I think I am uniquely qualified to comment. It used to be a bit more than 2 hrs a day but every since the time change it has been much closer to 3 hrs. It might get better in the summer but then again it might not.
And I just got an offer to work at a startup in The City. tipster was right though, they want to pay me 1/3 less salary in exchange for a bunch of pre-IPO stock options. I am probably going to take it.
Posted by: NoeValleyJim at December 19, 2012 5:03 PM
@Willow: are you kidding me? The vast majority of tech workers I know either complain about the SF-south bay commute, or live in the south bay and hate it. The exception are the middle-aged (I am one) with kids, who like the 'burbs.
But since the tech companies covet young talent, SF is where they want to be. As SF becomes more business-friendly, all the tech growth will be in SF...you can see it happening now.
Posted by: JB at December 19, 2012 9:29 PM
@Willow, I have mistaken about the precise point you are trying to make. If it is about big companies like Google, I agree with you they are highly unlikely to move anywhere. They are already well established in where they are and there is no reason to uproot the current employees.
I was commenting about the general economic climate, the robust tech communities and a steady stream of small companies moving into the city in the last few years.
I actually think prop E is much ado about nothing. If cost is really a primary concern for tech why would they even consider the high cost location like San Francisco or California at all. The access to talent pool is vastly more important factor. And for that the companies are willing to pay a dear price.
Posted by: Wai Yip Tung at December 19, 2012 10:08 PM
Now we just need to build enough housing to accomdate the thousands of workers who will occupy this space ... Oh wait, this is SF so that's not going to happen. </snark>
Posted by: Badlydrawnbear at December 20, 2012 7:52 AM
I think you'll continue to see high growth of new tech companies in SF and, unlike in years past, they'll likely try to stay in SF. The Sergey Brin's / Zuckerbergs type are more likely right now already here *in* SF than in South Bay. IF they make a company that skyrockets (big if), they'll be more likely to stay here.
And heck, Twitter's location is exactly right - spot on the BART / Muni path and in cheap rent area. That BART path is key, I think.
Posted by: DanRH at December 20, 2012 9:49 AM
Varied opinions stated, but whatever happens one thing is clear, this will be a (continued) windfall to residential landlords in the city. High demand for housing will continue unabated for the next 2-3 years at least. And I'm cool with that.
Posted by: 48yo hipster at December 20, 2012 11:13 AM
Good thing I closed in SF in August. I'm willing to bet I caught "the bottom" just in time. ;)
Posted by: Phew at December 21, 2012 10:46 PM
IMO this is Salesforce consolidating their offices, moving from more expensive space north of Market to less expensive space just south of Market. This was the rationale for the 50 Fremont lease. There are also a number of acquisitions scattered in various offices around the city and bay area (Rypple, Heroku, Jigsaw, etc).
The impact on housing demand is the result of the initial CRE investment that creates the additional space, not the result of Salesforce leasing the space out. More office space puts downward pressure on lease prices and makes the city more attractive for business.
With the combination of Prop E and the resilience (knock on wood) of tech so far, I am optimistic about SF as a job creator.
Posted by: Robert at December 24, 2012 2:38 PM
As one of those tech workers who rides a shuttle to South Bay every day I think I am uniquely qualified to comment.
We have switched places! I used to commute down to the peninsula and now work in the city. It sucks, but the fact of the matter is that the center of gravity for tech is down there. I don't think you can plan your life to be in tech and never go south of the city.
I always thought that SF is more for kids (front end work, web startups) whereas the peninsula and south bay has more adult programming jobs (systems, databases, networking).
But now I've been talking to some of my networking/kernel engineering friends and they are seeing an increase in systems level job openings in the city. So far it is all start ups, but if we could have two more big tech companies here or a couple of start ups stay in the city as they grow, it would really balance out the work potential for those who don't have the inclination to keep jumping across start ups. I think it may happen. Best of luck.
Posted by: Robert at December 24, 2012 2:49 PM