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-   -   CHICAGO | Salesforce Tower | 850 FT | 60 FLOORS (https://skyscraperpage.com/forum/showthread.php?t=217949)

Mr Roboto Jan 31, 2019 3:01 AM

Quote:

Originally Posted by marothisu (Post 8455954)
I think they'll be around for awhile and they have nicely evolved into something that's increasing overall around the world rapidly. Their revenue last year was $10.5B. Just 5 years earlier in 2013, it was barely over $3B. Their revenue has over tripled in just 5 years. Tons of major companies use them - Amazon, Facebook, AT&T, American Express, Coca Cola, Deloitte, Delta, Ernst & Young, Honeywell, Intel, Kellogg's, Merck, NBA, NBC, Nike, Oracle, Siemens, Toyota, US Bank, etc many more.

You could argue about like 20 years from now, but a company that increases their revenue by over 3X in just 5 years? Come on.

You sound more optimistic, but you're probably right then that whether it's over valued or not it should last at least through construction of this building, which is all I really care about anyways.

LouisVanDerWright Jan 31, 2019 3:08 PM

Quote:

Originally Posted by Mr Roboto (Post 8455925)
So is Salesforce legit? Or is it some flash in the pan, like one of those late 90's dotcom companies. Ive just read in a few places they dont think this company is around for the long haul. IE - their stock is currently way overvalued and the bubble is soon to pop.

If so, wondering about the feasibility of this project. I know theres always speculation about companies like this, but just a little concerning that this prognosis has been found in a few places.

Lol, who told you that? Salesforce is a $10 billion company that makes hundreds of millions of dollars a year taxable (with gross profit margins close to 70%, those profits are only reduced because they reinvest like 90% of that money back into the business in terms of selling to new clients and R+D). Their products underwrite a huge chunk of what you experience on a day to day basis when interacting with technology.

If you have Chase or Bank of America and use their website or app, it's all Salesforce. Caterpillar uses Salesforce for their advanced networking features in their highest end products. My buddy who works there spent a whole year working on CAT where they basically have developed a network of sensors installed in their heavy equipment that uses Salesforce to predict when a part is going to fail, alerts management to which machinery will need service, orders the part to be delivered to the jobsite, and then deploys the repair crew to arrive simultaneously to the delivery of the part. This kind of technology saves operators of CAT equipment obscene amounts of money as each $5 million mining shovel or mining dumptruck costs them tens of thousands of dollars an hour when it experiences downtime.

So no, Salesforce is not going anywhere unless you are going to stop using mobile banking apps and mining companies are going to be cool with having way more downtime for their multimillion dollar equipment than they need to.

And no, Salesforce is not "an email marketing company" that was just how they got their start. They are now the premier cloud computing platform that makes all these distributed applications possible. Perhaps their stock is overvalued, perhaps their profits will fall if there is a recession, but Salesforce is as Blue Chip of a company as IBM or Walmart at this point. The economy simply will not function the way it does now without them or without a competitor replacing them.

Quote:

Originally Posted by Mr Roboto (Post 8456018)
Would all of the construction financing be obtained so early? Or is it portions at a time. It wasnt long ago we were subjected to the concrete husk of the garage of the waterview tower for a few years, or even worse the hole in the ground at the spire site that's still there. Financing appears to be different depending on the project.

Not trying to be a downer, just wondering.

Construction financing for a project like this is supposed to be procured in one big chunk that is disbursed by a title company from escrow as work is completed. Sometimes for big enough projects multiple banks will team up to split the risk. Bank A might put up the majority of a $800 million loan, say $600 million and then team up with Bank B who puts up $200 million in a second position or something. Regardless, the way you are supposed to do it is to have all parties put all funds into a construction escrow at closing and then no one can touch that except for the contractors as the title company approves their draw requests for completed work.

Waterview, Spire, et al were not done how you are supposed to fund a massive development project hence why they failed so spectacularly. Hines/Magaellan/Kennedys are no Garrett Kellher and Teng. They aren't going to amateur hour this project like that.

Investing In Chicago Jan 31, 2019 4:23 PM

Salesforce is as legit as Oracle, Microsoft, IBM, SAP, Adobe. That is the company they keep...It's really odd to read a question about Salesforce's legitimacy, that's how legit they are.

I work at Oracle, know Salesforce very well (my wife works there), they are well on their way to being a $20B revenue company.

the urban politician Jan 31, 2019 5:00 PM

Quote:

Originally Posted by Mr Roboto (Post 8456018)
Would all of the construction financing be obtained so early? Or is it portions at a time. It wasnt long ago we were subjected to the concrete husk of the garage of the waterview tower for a few years, or even worse the hole in the ground at the spire site that's still there. Financing appears to be different depending on the project.

Not trying to be a downer, just wondering.

No, that's not how it works.

Mr Roboto Jan 31, 2019 7:46 PM

Quote:

Originally Posted by LouisVanDerWright (Post 8456329)
Construction financing for a project like this is supposed to be procured in one big chunk that is disbursed by a title company from escrow as work is completed. Sometimes for big enough projects multiple banks will team up to split the risk. Bank A might put up the majority of a $800 million loan, say $600 million and then team up with Bank B who puts up $200 million in a second position or something. Regardless, the way you are supposed to do it is to have all parties put all funds into a construction escrow at closing and then no one can touch that except for the contractors as the title company approves their draw requests for completed work.

Waterview, Spire, et al were not done how you are supposed to fund a massive development project hence why they failed so spectacularly. Hines/Magaellan/Kennedys are no Garrett Kellher and Teng. They aren't going to amateur hour this project like that.

Makes sense. Thanks for the response.

jpIllInoIs Feb 14, 2019 3:05 AM

Did i miss something?

From Real estate Journal
The 1.2-million-square-foot Salesforce Tower, now under construction at the Wolf Point development, will offer approximately 700,000 square feet of downtown, Class A office space after the tech giant moves into its 500,000 square feet space in 2023.

Skyguy_7 Feb 14, 2019 3:11 AM

^ Nope. Just 2019 journalists being journalists....

TallBob Feb 14, 2019 8:04 AM

That's a pretty nice bit of news for DT....leasing activity is very strong Year over year!

The Pimp Feb 14, 2019 3:22 PM

Quote:

Originally Posted by jpIllInoIs (Post 8473415)
Did i miss something?

From Real estate Journal
The 1.2-million-square-foot Salesforce Tower, now under construction at the Wolf Point development, will offer approximately 700,000 square feet of downtown, Class A office space after the tech giant moves into its 500,000 square feet space in 2023.

fake news

r18tdi Feb 14, 2019 5:02 PM

Quote:

Originally Posted by Skyguy_7 (Post 8473420)
^ Nope. Just 2019 journalists being journalists....

RE Journals is especially worthless considering they basically just rewrite press releases. Safe to assume they were fed bad info

Vlajos Feb 14, 2019 6:00 PM

Quote:

Originally Posted by LouisVanDerWright (Post 8456329)
Construction financing for a project like this is supposed to be procured in one big chunk that is disbursed by a title company from escrow as work is completed. Sometimes for big enough projects multiple banks will team up to split the risk. Bank A might put up the majority of a $800 million loan, say $600 million and then team up with Bank B who puts up $200 million in a second position or something. Regardless, the way you are supposed to do it is to have all parties put all funds into a construction escrow at closing and then no one can touch that except for the contractors as the title company approves their draw requests for completed work.

Waterview, Spire, et al were not done how you are supposed to fund a massive development project hence why they failed so spectacularly. Hines/Magaellan/Kennedys are no Garrett Kellher and Teng. They aren't going to amateur hour this project like that.

Not to nit pick too much, but the Construction Lenders don't disburse all the funds into escrow at closing. That would be a colossal waste of money in terms of interest carrying costs. The Developer would not want that either. The Bank (or Bank syndication) disburse (to escrow at the title company) on a draw by draw basis, while monitoring construction. The Lender very likely requires all equity (or mezzanine financing potentially) be disbursed prior to their funds though.

the urban politician Feb 14, 2019 7:55 PM

Quote:

Originally Posted by Vlajos (Post 8474168)
Not to nit pick too much, but the Construction Lenders don't disburse all the funds into escrow at closing. That would be a colossal waste of money in terms of interest carrying costs. The Developer would not want that either. The Bank (or Bank syndication) disburse (to escrow at the title company) on a draw by draw basis, while monitoring construction. The Lender very likely requires all equity (or mezzanine financing potentially) be disbursed prior to their funds though.

^ Really?

This would suggest that lenders could still back out mid-construction and leave a project hanging. Even with a contractual obligation, it's certainly possible.

Wouldn't that create a lot of uncertainty?

Vlajos Feb 14, 2019 7:56 PM

Quote:

Originally Posted by the urban politician (Post 8474414)
^ Really?

This would suggest that lenders could still back out mid-construction and leave a project hanging. Even with a contractual obligation, it's certainly possible.

Wouldn't that create a lot of uncertainty?

Yes, that is how construction lending works. And no, there is a construction loan agreement, a legal agreement to fund based upon certain parameters. Of course Lenders can default, though extremely rare.

tjp Feb 14, 2019 8:04 PM

^ Right. Some construction loan agreements will require a certain level of leasing / sales before funding, but I highly doubt that's the case for this development considering it already has an anchor tenant.

Vlajos Feb 14, 2019 8:16 PM

Quote:

Originally Posted by tjp (Post 8474433)
^ Right. Some construction loan agreements will require a certain level of leasing / sales before funding, but I highly doubt that's the case for this development considering it already has an anchor tenant.

Certainly, pre sales are a requirement in a for sale project. Like all lenders, Apartment lenders want to be fully repaid, and you don't get repaid by not having a finished building, so there is very little incentive to not fund (unless of course the developer is in default).

PittsburghPA Mar 9, 2019 9:56 PM

https://i.imgur.com/vDeLqUY.jpg
https://i.imgur.com/eCzTwxv.jpg

maru2501 Mar 9, 2019 11:03 PM

hmmmmmmmm

Zapatan Mar 10, 2019 12:14 AM

Is soil testing 10 months before start date normal? Could they be starting sooner?

The Lurker Mar 10, 2019 1:07 AM

They were soil testing periodically for what seemed like a year at 1 S. Halsted before construction started

Goose Island Guru Mar 10, 2019 9:44 PM

Quote:

Originally Posted by Zapatan (Post 8500711)
Is soil testing 10 months before start date normal? Could they be starting sooner?

Yes, normal to allow proper time for geotechnical and structural engineering ahead of bid and permitting.


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