CHICAGO | Salesforce Tower | 850 FT | 60 FLOORS

[Randomguy34]

Originally Posted by tm30

If this constitutes a proven track record for attracting talent, added to the cost differential to the coasts (e.g. Boston), added to the available real estate, added to the coming O'Hare expansion, Chicago is becoming a no-brainer choice for HQ2.

Salesforce is a huge HUGE deal. Get 'er done.

^ Don't forget that Salesforce isn't the only major company adding thousands of jobs into the city. Facebook is hiring an additional 1000 workers, and Walgreens is moving 1800 jobs (albeit not all in tech) into downtown, and Google still has plans to add several hundred to several thousand jobs. With how much that's been announced the past couple of months, I'm not that bummed out if we lose HQ2. Downtown Chicago will continue to be leading environment for tech companies, with or without Amazon.

In addition the central area still has room to grow and expand, unlike many other cities. The 78, The River District, Lincoln Yards, and the Burnham Lakefront all expect to add tens of millions sqft of office space over the next decade. While some proposals are more realistic and fleshed out than others (@Lincoln Yards), the fact that the city can still grow will help the central area prepare for the future.

[maru2501]

^definitely hitting critical mass ..

[PittsburghPA]

Originally Posted by marothisu

Of course a portion will live outside of the city. That's just inevitable. Maybe I interpreted when you said "large portion" incorrectly. I took it to mean more than 50%. Maybe that's not what you meant. Personally my guess would be more around 25%..I guess that's large based purely on the fact that 5000 new hires for one company in one location is big.

Admittedly my post was poorly worded. I didn't mean a majority, but a large percentage proportional to the 5k number. I meant more like your estimation of 25%.

[Investing In Chicago]

Originally Posted by LouisVanDerWright

Again though, email marketing is a legacy business for them, yes they still make a lot of money off of it, but the focus of the firm is no longer sales. Salesforce has long since transitioned into a platform for businesses to offer additional services like online banking or maintenance management to their customers. Salesforce is not achieving revenue growth by convincing Chase to send their customers more spam email using their system, they are making money because Chase signs a big fat contract for Salesforce to house and build all of their digital interaction with their customers on one platform.

Email marketing is certainly not a legacy business for Salesforce (my wife is a VP of sales there, with the company since 2006), I work at Oracle, very much know their business.

Email marketing is their Salesforce Marketing Cloud, which is the Indianapolis based company, Exacttarget, which Salesforce acquired in 2013.

[Investing In Chicago]

Originally Posted by Notyrview

This is true, it's basically a giant sales/marketing company. But even still, I was shocked that you had to constantly refresh a page just to get it to function properly.

I would also argue that because it's a giant sales firm, more employees than we think will be living in the burbs. It's not the same crowd as a Groupon or a Grub Hub.

I don't know why you think more sales people means more living in the suburbs, but it's a very good thing the salesforce crowd is not the same as the Groupon or Grub Hub crowd.

[Steely Dan]

I moved the discussion about the sign on trump tower to the trump tower thread.

http://forum.skyscraperpage.com/showthread.php?t=177400

let's please keep this thread on topic and on track.

[Notyrview]

Originally Posted by Investing In Chicago

I don't know why you think more sales people means more living in the suburbs, but it's a very good thing the salesforce crowd is not the same as the Groupon or Grub Hub crowd.

Because typically sales people are more conservative for lack of a better term. And I don't mean politically, so no one have a heart attack. I just mean lifestyle-wise. Believe me, I'm not taking sides. The ultra hip tech crowd can be completely obnoxious, but it's also true that they generally aspire to live in edgier neighborhoods.

[Steely Dan]

this side discussion of where these potential salesforce workers might live is very silly.

some would choose to live in the city and some would choose to live in the burbs (duh).

the split probably lies somewhere between 30% and 70%.

anyone definitively splitting those hairs any finer than that at this extremely preliminary point is talking out of their ass.

[moorhosj]

Originally Posted by Notyrview

^Huh, what are you talking about? its email cloud is the cornerstone of the business. And if there's a downturn, I know my business would shed a bunch of those campaigns that we run right now just bc we're flush with cash.

Yes, there's always a downturn on the way, but everyone agrees now that one is just around the corner. All the indicators are pointing to it.

According to their financial statement, their revenue streams are decently diversified. The Marketing Cloud platform is their smallest revenue generator.

[marothisu]

Originally Posted by moorhosj

According to their financial statement, their revenue streams are decently diversified. The Marketing Cloud platform is their smallest revenue generator.

Lot of money in cloud type of services these days. AWS made nearly $17.5B in revenue alone for 2017 for Amazon. That is more revenue than all of Sears, General Mills, Gap, Nordstrom, Colgate-Palmolive, CDW, Texas Instruments, CBS, Loews, Mastercard, etc etc etc took in as entire companies in the same time period (individually). Just let that sink in. Lot of money in it and that will just continue to grow. Looks like Salesforce is growing well in this - at least from what I found, they nearly doubled their revenue from cloud offerings since 2015 (projected for 2018 at least).

[Notyrview]

Originally Posted by moorhosj

1,500 people paying the city average of $4,100 in property taxes is $6.2 million of revenue annually.

Thanks that's actually really useful information and it shows why the convo about where people will live is actually important. I guess a $3 million abatement is still a win, but hopefully it'll be more like 2,000 people living in the city.

If anyone's interested, here are the latest figures for commuter-adjusted population i could find, from 2006-2010. Looks like 35% of workers commute, but that's probably gone down as the core continues to become more and more desirable/livable.

[LouisVanDerWright]

Originally Posted by moorhosj

According to their financial statement, their revenue streams are decently diversified. The Marketing Cloud platform is their smallest revenue generator.

Exactly, because it is a "legacy business". Salesforce started as the Marketing Cloud and has rapidly diversified itself into a platform, not just one service. Yes the CRM side of it is still important, but it's not their core business anymore, not by a mile.

As someone else mentioned Salesforce has actually diversified largely through acquiring start ups with promising products that complement its existing businesses. My buddy who works there was actually technically hired by Model Metrics (though they were already owned by Salesforce and hadn't yet been fully merged) which was a Chicago based tech startup that Salesforce acquired. They specialized in the type of cloud based mobile applications that my friend works on and ended up being the core of this branch of the Salesforce platform. That acquisition certainly has turned out to be a coup for Chicago almost moreso than Groupon or Grubhub given this news about the new office. We can probably attribute Salesforce ending up here to the fact that they got a taste of the Chicago market from Model Metrics and it must have tasted pretty sweet.

[Investing In Chicago]

Originally Posted by LouisVanDerWright

Exactly, because it is a "legacy business". Salesforce started as the Marketing Cloud and has rapidly diversified itself into a platform, not just one service. Yes the CRM side of it is still important, but it's not their core business anymore, not by a mile.

This is wrong.

[Notyrview]

It doesn't really matter what proportion is sales/service/email/marketing. The point is that Salesforce is a work horse tech company, not a hip one. And that has implications for how many of its employees will live in the city, pay property taxes and offset the costs of the property tax abatement.

[Busy Bee]

My eyes are glossing over

[ardecila]

Originally Posted by Notyrview

It doesn't really matter what proportion is sales/service/email/marketing. The point is that Salesforce is a work horse tech company, not a hip one. And that has implications for how many of its employees will live in the city, pay property taxes and offset the costs of the property tax abatement.

I think you're drawing too harsh a dichotomy between "work horse company" employees and "hip company" employees. Not every company is a General Motors dinosaur or a zany youthful BuzzFeed.

There's a whole spectrum, and even people in old-economy jobs might like to live in vibrant urban neighborhoods. That's why the current urban boom is so interesting, because urban living now appeals to people across the economy and not just members of certain subcultures.

But even if you take for granted that salespeople are culturally different and don't want to live in edgy neighborhoods (which is demonstrably false, I know plenty of urbanites in sales roles) not every Chicago neighborhood is Logan Square, Albany Park or Pilsen. There are plenty of neighborhoods like Lakeview, Irving Park, Edgebrook, Norwood, etc that have been comfortable white enclaves for decades.

[Chicago E]

This is great news for the City of Chicago and I think the addition of this very tall building at this site will make the skyline even better. My only concern is that is the density of Wolf Point with all three Kennedy developed buildings going to be over the top? I walk by this site often and wonder how that density with the Apparel Mart and the Merchandise Mart right next door will work for the infrastructure? Would like to hear other's thoughts? Thanks!

[Notyrview]

Originally Posted by ardecila

There are plenty of neighborhoods like Lakeview, Irving Park, Edgebrook, Norwood, etc that have been comfortable white enclaves for decades.

!!!

Race aside, Salesforce is definitley more a meat and potatoes kind of business and that invariably means more commuters than say Groupon.. Sure there are some shades of grey, but overall, that’s the reality. On the flip side, meat and potatoes ares essential and that’s why SF does so well.

[ardecila]

^ What, exactly, makes an edgy neighborhood edgy? Usually it's (temporary) diversity and demographics in flux. What, exactly, other than sheer age, makes "meat and potatoes" workers prefer the suburbs over a city neighborhood? Can't really dance around race here. If you control for age and we're simply talking about personal preferences, then a lot of people are making housing choices based on the race of their neighbors.

(Obviously parents, who tend to be older, face very real challenges getting a safe/quality education in the city, so there are rational reasons to go suburban at the point.)

But also, Groupon? Groupon is like 90% sales, it's not even really a tech company anymore and it's not rolling out new products on the back of those sweet sweet ad sales like Google does. It's certainly not vacuuming up "hip, edgy" coders like a Google or a Salesforce.

[Notyrview]

^Why are you so obsessed with what’s edgy? We’re talking about the suburbs vs the city, and i think it’s fair to say that any neighborhood in the city is edgier than Naperville. And you’re just flat out wrong comparing Salesforce to google or groupon. Lol. Wrong. It’s ok to be a meat and potatoes work horse. There’s nothing wrong with that and you shouldn’t take it so hard.