The next big item on which cloud software company Salesforce.com will spend its money is not an acquisition, but a building. And not just any building, but one that when completed will be the tallest in San Francisco.
The company said today that it has leased more than half of the space in the Transbay Tower, a massive 61-story building currently under construction at the corner of First and Mission. The move will add about 700,000 square feet to Salesforce’s booming campus in the city, and the company says it will add 1,000 new employees.
Salesforce has also paid for the naming rights to the building, so it will be known as the Salesforce Tower. The 15-and-a-half year lease will cost $560 million, and Salesforce will, according to a filing with the U.S. Securities and Exchange Commission, spend another $130 million on improvements. It also expects operating expenses related to the lease of about $305 million.
It may be getting a prominent building, but it’s not getting a very good deal. Dan Levy of Bloomberg News observed that Salesforce is paying about $85 per square foot, which is higher than the peak average rate in 2000 of $80 per square foot.
The building will be about 200 feet higher than the Transamerica Pyramid that currently dominates the city’s skyline.
The move answers a big question about Salesforce’s unexpected decision in 2012 to back out of a huge 14-acre campus in the Mission it had planned to build, on which it had spent $278 million.
For a preview of what it’s going to look like, here’s a video from the building’s official site: