Behind the Deal: Pinterest's SoMa HQ
Pinterest inked a 150k SF deal this week at 505 Brannan, aka Alexandria Real Estate's to-be-built property in SoMa. The CEO tells us it will deliver before new HQs for Uber and Stripe. And it could grow up to 450k SF.
The deal origins go back a number of months, CEO Joel Marcus told Bisnow this week. The design giant was known to be in the market for additional space for some time, he says, and Alexandria and JV partner TMG Partners were able to secure the site—which is rare for a range of reasons. It's right next to the future 4th Street planned subway station, for one, which will be a major connector from SoMa into the center of the Financial District and Mission Bay—so you "couldn’t get a better location into the heart of SoMa," he says. Another perk: it's fully entitled under Prop M so that means it's a sure thing.
Having a "unicorn" as a tenant with a $10B to $11B market cap is a coup. Joel couldn't say what current programming was in terms of how many employees they can stuff inside, but he's working on that. There's also the ability to upsize the building under the Central SoMa Plan; it could grow two to three times bigger, he says. It's too early to tell but one thing is for sure: make it a collaborative and innovative place to work, with an open environment that is amenity rich—like great food service and fitness. The battle on the ground in S.F., Joel says, is attraction of talent and he wants to create an environment that optimizes, attracts, retains and incentivizes talent. Here is Stripe's new HQ arriving at 510 Townsend.
Alexandria has been busy as bees as of late; here's Joel (second from left) at a recent groundbreaking in Seattle. Certainty of execution and timing of delivery were reasons Uber and Pinterest ended up choosing Alexandria, he says. The car giant apparently interviewed most developers in S.F. and looked at a whole lot of sites before choosing Alexandria. Pinterest inked a 15-year lease, but the market these days is very strong "so we view them as a long-term strategic relationship of ours." Alexandria did Google's first campus in 1998 and has as of late added to its brand relationships, he says.
A lot of shovels will soon hit the ground: The Uber HQ (rendered) will break ground at the end of the year or early January, he says, and Stripe will likely do the same in Q4. The Uber HQ will deliver at the end of 2016, as will Stripe. But since this is a simpler building to build by the way its designed, it will be a 12- to 15-month project. Uber, meanwhile, is a two-building structure with sophisticated design and Stripe needs to remove an existing structure. The cost to erect Pinterest's new HQ: around $700/SF.
