Panache and Performance

by David Mills on March 5, 2012

The balance of corporate image, showmanship, financial performance and pragmatic use and occupancy are a mix of understandings and perspective that require focus from the top of the organization. How is your enterprise balancing these decision points in the emerging new economy?

The Real Reason Pulled Its Splashy New Campus Plans

Forbes Tech 2.29.12

Marc Benioff does all things with panache. His plans for Salesforce’s Mission Bay San Francisco headquarters didn’t disappoint.

It would be two million square feet, more than double the company’s current downtown space, designed with the splashy, bold look from Mexico’s famed architects Legorreta + Legorreta, and achieve the highest possible green rating from the U.S. Green Building Council’s Leadership in Energy and Environmental Design program.

One source close to the company claims the estimated cost of the new campus could hit $2 billion, totaling two-thirds of Salesforce’s projected sales in the upcoming year and more than the current $1.4 billion in cash and equivalents on its balance sheet. Perhaps Benioff – along with his advisers – decided he wanted cash to spend on acquisitions instead of buildings. The company lately has ramped up its own acquisition spree, as the giants it competes with, notably Oracle and SAP, spend billions to buy Web software firms.

Not so, Benioff tells me.

“It’s a hard decision for me. We had a big vision. But around November a guy I brought in to oversee our real estate told me to rethink things,” says Benioff. A building blocks away from Salesforce’s current cluster of three properties was coming on the rental market. At 800,000 square feet, it would give Salesforce near the total two million it was sketching out in Mission Bay.

The company already leases 600,000 square feet in downtown San Francisco.

Categories: Acquisitions & Dispositions, Communications, Information, & Entertainment, Contract Services, Insurance, Land Development, Lease Administration, New Construction, Portfolio Performance, Property Tax, Regulatory, Renovations, Repairs & Maintenance, SaaS, Utilities & Telecom
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