What Tech Giants Like Facebook and Salesforce Want
We heard from tenant titans about what it takes to create a retail, residential and office environment that thrives this morning at Hotel Nikko for Bisnow's first-ever Mixed-Use Summit.
Strada Investment Group principal Michael Cohen (right) says dense urban cities like S.F., Boston and New York are successful largely because of mixed-use development. Over the years he's seen an evolution in planning departments loosening reigns of zoning controls. We are moving past the idea of mixed-use as just a residential project with ground-floor retail. Now the trend is a mix of office and residential in the same project. That helps when it comes to Prop M because the uses can be staggered and the investment can be recovered sooner. He revealed Strada is eyeing two projects in Central SoMa, but left out the details.
Facebook director Fergus O'Shea, whose company moved from Palo Alto to Menlo Park in 2011, just opened its brand-new campus in March. The firm is trying to create an environment where people live closer to campus, which means potentially integrating mixed-use. Transportation is increasingly important for Facebook, he adds, and employees commute from all over the Bay Area.
Salesforce SVP Ford Fish says the new workforce craves mixed-use, and he's looking for an environment that attracts the best and brightest. Half its employees in S.F. live here in S.F., and they really want to foster a diverse community and meet the city's needs when it comes to issues like affordable housing. As for transit, don't expect mixing and mingling on the Salesforce buses with other companies; the No. 1 value of Salesforce is trust, he says, and many commuting are developers working on codes that can't be shared next to another company's employees.
Arent Fox partner Tim Tosta, who moderated, says we have a mixed-use environment developing in the Bay Area because of its significant tech employment base. There are large campus settings driving the regional economy. We're entering a new phase of entitlement that doesn't serve the development community well; the tech firms are in a position to afford more and do more in the course of entitlement than a developer can fit in an economic box.
For years Michael has heard criticism around the aesthetic of Mission Bay, but he says the market has been a spectacular home run. It's the only submarket in S.F. at the very top of office values and residential values. Retail has become an amenity package, and one hot trend is micro retail, or breaking it up into small spaces that allow for greater diversity and an organic feel vs. big-box retail.
The challenge of Mission Bay, says Ford, is there is not a lot there. It really didn't get life going—even today. He appreciates the move to make 4th Street activated but there needs to be a core. The would-be Salesforce campus in Mission Bay that was axed was expected to bring a big town center and restaurants, but all that was already available in the heart of S.F. So when 50 Fremont came along that sealed the deal to change the plan and build out a campus downtown.