





Months after Salesforce opened its headquarters in San Francisco’s tallest tower, it is committing to long-term expansion in the city with another office deal steps away.

The site known as Transbay Parcel F is a dirt lot. In five years, the site at 564 Howard St. is set to become a soaring 800-foot glass high-rise with space for 1,500 workers, along with 165 condos and 190 hotel rooms.

All those workers will be Salesforce employees: The tech giant confirmed it signed a lease for 325,000 square feet of space Wednesday at Parcel F. The deal fills the entire office portion of the $1 billion tower, which will be taller than the Bank of America Building, which at 779 feet is the city’s fourth-tallest high-rise.

Salesforce is signing on even before the tower has won key city approvals, a testament to the severe space crunch pushing large tenants to scramble for offices downtown.

It’s a sign of strength for Salesforce, which recently became the city’s largest private employer with 8,500 workers. The cloud computing company now has space for its goal of 10,000 workers in San Francisco, and may grow even further, said Elizabeth Pinkham, Salesforce’s executive vice president of global real estate.

Location was key, she said. Like Salesforce Tower, Parcel F will have a direct pedestrian bridge to Salesforce Park, the city’s new rooftop green space on the Transbay Transit Center. (The center has been closed for weeks as officials determine the cause of two cracked steel beams.)

“When we realized Parcel F was the last panel connected to the park and transit center, it felt like a great move,” Pinkham said. “It just really felt like the right way for us to grow and scale the campus while keeping everyone together.”

With 2.5 million square feet of offices spread among five Transbay Transit Center area buildings, Salesforce has “one of the most significant urban corporate campuses in the world,” said Robert Sammons, Northwest research director at real estate brokerage Cushman & Wakefield. Other examples include Amazon in Seattle, JPMorgan Chase in New York and Coca-Cola in Atlanta.

“They keep investing in this neighborhood. They’ve also been tremendous, civic-minded business folks,” said Andrew Robinson, executive director of the East Cut Community Benefit District, which promotes the area that includes the Transbay Transit Center.

Robinson cited the company’s policy to not have corporate cafeterias, instead encouraging employees to eat out, as a boon for local merchants.

“It’s a really different thing having Salesforce here as opposed to others,” Robinson said. “It makes the whole corridor more vibrant.”

Pinkham said the company is exploring potential signs on the tower.

As it does in other towers, Salesforce will have an Ohana Floor in the Parcel F building, an event space that will be available to nonprofits for free.

“It really does make a difference,” said Laura Steinfeldt, vice president of development at the American Heart Association, which has held two events at Salesforce Tower. “We’re really grateful.”

Salesforce’s deal is a major boost for one of the last undeveloped pieces of the Transbay district, San Francisco’s tallest neighborhood. Parcel F is the last office tower to be built in the area and the final project over 600 feet in the city’s development pipeline.

The long-awaited Central South of Market plan, running from near Market Street south to Townsend Street and from Second Street to Sixth Street, was tentatively approved by the Board of Supervisors on Tuesday. The Central SoMa plan, eight years in the making, is expected to receive final approval at the next supervisors meeting.

Developers Hines and Urban Pacific, along with financial partner Goldman Sachs, expect the Saleforce project to be approved early next year and that they will break ground by the end of 2019. Financing has been secured, said Cameron Falconer, senior managing director at Hines.

Hines, based in Houston and one of the country’s largest developers, won the rights to build what is now Salesforce Tower in 2007, but was delayed by the 2008 recession.

In 2014, Salesforce leased 714,000 square feet in Salesforce Tower, the city’s biggest deal at the time and a bellwether for the tech industry’s surging growth. It’s since expanded further in the tower.

Hines now owns 5 percent of the tower, and Boston Properties owns 95 percent.

Salesforce Tower’s architect, Pelli Clarke Pelli, also designed the transit center and Parcel F.

“It is in a lot of ways the completion of their headquarters campus,” Falconer said.

Falconer declined to disclose the rent Salesforce will pay. Asking rents for new towers in the Transbay area exceed $100 per square foot annually, according to brokerage data.

The Parcel F site had setbacks. It’s next to the transit center bus ramp and spans a narrow lot, which limits the design space. Residential developer Crescent Heights scrapped a 2015 deal to buy the site due to its 35 percent affordable housing requirement.

A year later, Hines, Urban Pacific and Goldman Sachs bought the land for $160 million for a mixed-use project.

Falconer said commercial space helps make the current project financially viable. The developers have proposed 713 apartments that would replace part of the nearby Temporary Transbay Terminal. That project, known as Block 4, will have 49 percent affordable housing to satisfy the city’s requirements for Parcel F.

The new tower will include a public plaza next to a future ground-level park called Under Ramp. The project’s hotel portion will be on the ground floor, which will help keep the area active at all times of day, Falconer said.

Salesforce recently moved out of its older offices at the Landmark at One Market and Rincon Center at 101 Spear St. The tight market has made that vacant space evaporate: Google leased the entire One Market space last week, and Twilio, a San Francisco cloud communications company, leased the Rincon Center offices, according to brokerage data.

The competitive market isn’t a surprise to Salesforce, which was founded in a Telegraph Hill apartment building in 1999.

“We’ve been here since the beginning. For us, this is normal,” Pinkham said. “Other companies are realizing the benefits of being in San Francisco.”

Even with a slew of big deals this year, office demand remains robust.

Cushman & Wakefield is tracking 158 San Francisco tenants — 62 percent of which are tech — seeking a total of 5.8 million square feet of office space. At the end of the third quarter, only 5.6 million square feet was available for lease.

There’s minimal new supply. Only two large office projects are under construction: the two-tower Oceanwide Center complex, which is also in the Transbay area, and the renovated 633 Folsom St. in South of Market.

Minimal San Francisco supply could push tenants to Oakland or San Jose, which already have benefited from some spillover, said Sammons of Cushman & Wakefield.

“This has certainly been San Francisco’s decade, but the next decade could just be San Jose’s, especially if we stymie development here,” Sammons said.

Roland Li is a Chronicle staff writer. Email: roland.li@sfchronicle.com Twitter: @rolandlisf