Requirements Surge in '14
Salesforce and Box's potential leases within blocks from one another keep growing and we have the deets. (This means we'll almost assuredly see a big number of marriages between Salesforce and Box employees.)
We reported last month that Altos-based Box was closing in on a monster lease at Tishman's 222 Second (rendered below). Box's requirement was originally for just 200k SF and now we've discovered it wants to take the whole darn 452k SF masterpiece coming to the southwest corner of Howard and Second. (As most people who are moving realize, they're gonna need a bigger Box.) But that's not all; we knew that Salesforce's lease had doubled from 300k to 600k at Transbay Tower and now we just learned it could be up to 700k, or exactly half the office space in the 61-story skyscraper coming to First and Mission (above).
Six new tenants have started looking for 100k SF or more in S.F. since the start of this year, for a total of 14 currently swirling the market for that much space, sources say. Large tenants are facing a lack of options, and a lot of the new construction that will deliver in the next few years will be pre-leased through the remainder of 2014, according to sources. We learned SKS' 270 Brannan is expected to start construction during Q2. The S.F. development pipeline is pretty big, but some of those projects still have to go through the laborious entitlements process.
Last month at BOMA's monthly luncheon, moderator JLL managing director Wes Powell (far right) directly asked Cornish & Carey Commercial Newmark Knight Frank SVP Liz Hart to address the "Box rumor," which she could neither confirm or deny. (Nothing wrong with being a little coy.) She did, however, address the concept of unicorns. She counts 18 unicorns in S.F. that grow, on average, 50k SF per year. If those billion-dollar companies continue to expand like they have in the past, development sites will get picked off one by one quickly, she says.
