San Francisco’s tallest building will be named for Salesforce.com Inc. (CRM) after the company said it would occupy more than half of the tower’s office space in a deal that sets a record for the city’s commercial rents.
The biggest maker of customer-management software will occupy 714,000 square feet (66,000 square meters) in the newly named Salesforce Tower, the company said yesterday in a filing. Base rent of $560 million plus operating costs and improvements to Salesforce’s portion of the high-rise brings the total value of the deal to almost $1 billion, according to the filing.
The lease is San Francisco’s largest in records going back to 2000, brokerage CBRE Group Inc. (CBG) said. Over a term lasting 15 years and 6 months, the average rent works out to more than $83 a square foot, assuming a year of free rent that’s often granted to tenants in new buildings. San Francisco’s previous peak office rate citywide was $80 a square foot in 2000.
“We’re moving to an urban-campus strategy that we’re very excited about,” Chief Operating Officer George Hu said in an April 10 phone interview before Salesforce Chief Executive Officer Marc Benioff announced the lease and naming deal in an event yesterday attended by San Francisco Mayor Ed Lee. “I can’t think of a more energetic and fun location.”
Salesforce will occupy the lower 30 floors and the penthouse of a development at 415 Mission St. that had been known until now as the Transbay Tower. Boston Properties Inc. (BXP) owns 95 percent, with the balance held by Houston-based real estate investor Hines. Arista Joyner, a spokeswoman for the Boston-based landlord, didn’t return calls seeking comment on the lease.
Salesforce, founded in San Francisco in 1999, has completed more office leases than any other company during the city’s four-year technology boom, taking space in several downtown locations, according to CBRE. The firm claims to be the largest technology employer in town with 4,000 workers.
The tower deal completes a shift to downtown buildings after the company decided in 2010 to cancel previously announced plans for a low-rise campus at Mission Bay, south of the financial district. By 2017, all employees will be consolidated at the new tower, or nearby 350 Mission St. and 50 Fremont St., in a high-rise cluster encompassing about 2 million square feet, Hu said.
Rising to 1,070 feet (326 meters), Salesforce Tower will have a slender cylindrical profile, glass facade and tapered crown that reaches 217 feet higher than the 499,000-square-foot Transamerica Pyramid in the north financial district. Thirteen-foot ceilings limit the number of office floors to 61. The tower is on the site of a demolished 1930s bus station whose replacement transit terminal will be topped by a 5.4-acre (2.2-hectare) park.
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