Boston Properties has finally snared a major new corporate tenant for a development project it has been planning for a long time at a key site in San Francisco. The project, which is jointly owned with Houston based Hines group, is for the construction of a new 1.4 million square foot office prestige tower right in the south of the financial district.
Mort Zuckerman’s Boston Properties and Salesforce.com, which is led by Marc Benioff, announced yesterday that Salesforce.com has signed a lease to take just over half the space, 714, 000 square feet, in the new building as a new hub for the cloud computing company’s burgeoning urban campus.
Now on a foggy day the company’s executives’ heads will literally be in the clouds as they design the latest generations of their collaborative, cloud-based, customer relationship management and marketing tools for their customers.
Salesforce.com is taking the first floor, the twenty eight floors floors between the third and thirtieth floors, and also the sixty-first floor penthouse. The lease will be for just over 15 years and the rents work out to somewhere above US$80 per square foot, including operating costs. Accordingly the total value of the lease will be pretty close to US$1 billion, and the first time San Francisco rents have hit US$80 since the last boom.
With the execution of the new lease, which is the largest office lease ever signed in San Francisco, the developers have agreed to assign naming rights for the building to their new tenant, and the building will be called the Salesforce Tower.
Boston Properties will now commence construction of the building and it should be finished early in 2017. The projected total cost, including all soft costs such as interest during construction, will be about US$1.1 billion.
Mort Zuckerman, Chairman of Boston Properties, said very happily, “We are pleased to partner with salesforce.com on this iconic tower. At 61 stories and 1, 070 feet tall, with an outstanding design, it will have a transformative impact on the San Francisco skyline.” He then added,
“Salesforce Tower is a reflection of our mutual confidence in the City of San Francisco and the South Financial submarket as a home to successful companies that seek to employ today’s highly educated and highly motivated worker.”
Finally Mort Zuckerman pointed out, “Salesforce.com’s commitment further demonstrates the desirability of high-quality, well designed first class office space to today’s premier technology companies. We are committed to making Salesforce Tower the most important business address in San Francisco”
Marc Benioff, Chairman and CEO of salesforce.com said “Salesforce Tower represents an incredible milestone in our company’s history – it will be the heart of our global headquarters in San Francisco, ” adding “We founded salesforce.com in San Francisco 15 years ago and this expansion of our urban campus represents our commitment to growing in the city.”
The new Salesforce Tower is located at 415 Mission Street, in the South Financial District of San Francisco and it will become the hub of salesforce.com’s urban campus there. When complete, it will be the tallest office building in the United States west of Chicago.
The new tower will have access to the underground Transbay Transit Center there and other key amenities along the Market St. corridor. This will be important as Salesforce.com, which was founded in San Francisco 15 years ago, today is already the city’s largest technology employer and has to bring in a lot of people every day to the city. Salesforce.com now has more than 4, 000 employees in the San Francisco Bay Area, including right beside the new tower, at 50 Fremont St. and 350 Mission St.
Salesforce.com is the world’s largest provider of customer relationship management software, with annual revenues exceeding $4 billion.
Boston Properties is a publicly listed, fully integrated, self-administered and self-managed real estate investment trust that develops, redevelops, acquires, manages, operates and owns a diverse portfolio of important properties. The Company is one of the largest owners and developers of Class-A office properties in the United States, concentrated in five markets – Boston, New York, Princeton, San Francisco and Washington, D.C.
About Marc Benioff
Marc Benioff, 48, was born in 1964 and was raised in the San Francisco metropolitan area. He graduated from Burlingame High School in 1982 and then studied for, and received in 1986, a Bachelor of Science in Business Administration at the University of Southern California.
Prior to founding salesforce.com, Benioff was at Oracle Corporation for 13 years. At 23, he was named Oracle’s Rookie of the Year and three years later he was promoted to vice president, the company’s youngest person to hold that title.
Before joining Oracle, Benioff had worked as an assembly language programmer at the Macintosh Division of Apple Computer, where he was inspired by the company and its co-founder, Steve Jobs. He went out on his own and founded Salesforce.com in 1999 which has since rapidly grown to become a major corporation in its own right.
According to the Forbes billionaires list Marc Benioff has a personal net worth estimated at US$3 billion as at April 2014. Even so he recognizes the importance of giving back, and just a few days ago he and his wife Lynne made second a donation of US$100 million to the San Francisco children’s hospital – doubling up a previous donation of the same amount.
About Mort Zuckerman
Mort Zuckerman serves as Executive Chairman of Boston Properties which he co-founded in 1970. He is also Chairman and Editor-in-Chief of U.S. News & World Report and Chairman and Publisher of the New York Daily News.
He serves as a trustee of Memorial Sloan-Kettering Cancer Center and he is a member of the Bank of America Global Wealth & Investment Management Committee, the Council on Foreign Relations, the Washington Institute for Near East Studies and the International Institute of Strategic Studies. He is also Vice Chair of the International Peace Institute.
Mr. Zuckerman was awarded the Commandeur De L’Ordre des Arts et des Lettres by the Government of France, the Lifetime Achievement Award from Guild Hall and the Gold Medal from the American Institute of Architecture in New York.
Mr. Zuckerman is a graduate of McGill University in Montreal where he received an undergraduate degree with first class honors in 1957 and a degree in law in 1961. He received an MBA with distinction from the Wharton School, University of Pennsylvania in 1961 and an LLM from Harvard University in 1962. He has also received three honorary degrees.
According to Forbes billionaires list Mr. Zuckerman has a personal net worth estimated at US$2.4 billion as at April 2014.