For a city synonymous with the tech industry, San Francisco used to host few actual tech companies. Plenty of techies lived there, sure, but each morning they boarded their Wi-Fi–connected luxury buses and commuted south to Silicon Valley, where the world’s innovation class worked long hours on sprawling, lush campuses.
Now the city is growing up—literally.
Last week, Salesforce CEO Marc Benioff celebrated the software company’s new headquarters in a gleaming skyscraper under construction in the heart of the city. After Salesforce Tower is completed later this year, it will be the second-tallest building west of the Mississippi. But more significantly, it will be the tallest in the US with a tech firm as its anchor tenant.
“I used to walk this very street with my grandfather,” Benioff said at a “topping off” ceremony, which involved lifting a giant beam to the roof. “And he used to tell me about how the future of San Francisco was rising up.”
You can see this on the skyline. For a century, downtown skyscrapers were primarily the domain of banks, insurance companies and airlines. These old buildings---with their low ceilings, cubicles, darkness at noon---were never conducive to fostering that special magic tech companies seek: "culture," where hoped-for creative geniuses can disrupt and iterate and optimize. Now even suburban campuses and open floor plan warehouses often don’t cut it. These buildings don’t provide that other side of the culture coin, an appeal earnest tech companies are reluctant to cop to: status. Increasingly, tech companies are shooting skyward to flaunt their economic might and cultural cachet.
With Salesforce Tower and nearby (and still rising) 43-story Park Tower, developers have adapted tall buildings to tech’s taste, says Jack Nelson, a research analyst at JLL, a real estate services firm. Architects provide fresh air and natural light through decks on multiple stories, floor-to-ceiling glass and open spaces, to create “what we’ve termed as ‘vertical campuses,’ as opposed to the large suburban spread-out vibe.”
While Salesforce itself has remained San Francisco born and bred, tech companies across Silicon Valley are establishing beachheads in the city. In 2012, Pinterest became one of the first major brand-name tech companies to ditch its Palo Alto headquarters. “That’s when people started to realize, ‘You know, we can make it in San Francisco,’” says Christan Basconcillo, research manager at JLL. What followed was a full-blown trend.
In 2014, Google gobbled up a quarter million square feet of a 42-story tower downtown. Two years later, LinkedIn moved into a new 26-story building. Uber Technologies expects to open its two-building, glass box campus in the city by 2018. For established and fast-growing tech firms, even their large corporate campuses---planted tastefully among the verdure of Silicon Valley towns---aren’t enough.
Part of what’s driving this inflow to the city is, well, the drive---despite employers’ fancy buses. “The big four or five Valley companies have a significant percentage of talent and employees that live in San Francisco,” Nelson says. “And the commute has become, and has been, kind of brutal going back and forth.” As a recent article by the nonprofit San Francisco Bay Area Planning and Urban Research Association notes, “Many workers want to be in cities. And so increasingly today’s innovative firms want to be in cities, too.”
Still, location, location, location is not enough. Tech firms must also vie for the best talent, attracting potential employees through perks intrinsic to the workspace---nap rooms? Sure. Office yoga? We got that. Full-service cafeterias with every sort of gluten-free etcetera and jujuberry nutrobooster under the sun? Goes without saying. A gleaming new office tower in the heart of a bustling city? No juicebar in the world can compete with that.
“It’s almost like when you’re no longer lean and scrappy but you’re kind of stolid and you might want to get a skyscraper to show your new look, that you’ve graduated from college,” says Jason Barr, an economist at Rutgers University-Newark who studies skyscrapers. “Usually these buildings are for people with a lot of money who want to signal to the rest of the world that they have a lot of money.”
And we are indeed talking about a lot of money. An average tech wage in San Francisco in 2015 stood at more than $175,000, according to a recent JLL report. That’s greater than three times the average wage in the US as a whole. And these tech employees are increasingly working in the city. While the number of tech jobs in Silicon Valley actually fell between 2001 and 2015, it grew 189 percent in San Francisco.
The city has the highest rate of income inequality in the state, and homelessness is a chronic problem. In the shadow of the soaring Salesforce Tower, a man asked a passerby for money to buy something to eat—a ritual of inequality that repeats itself across the city every day.
Christopher Palmer, an economist at University of California, Berkeley, says an influx of tech workers in the downtown area would create more lower-wage service-sector jobs as new residents buy groceries, get haircuts and shop. But the high cost of commercial real estate could also push out mid-tier companies downtown, he says. Either way, the number of tech jobs in New York City grew 48 percent over the last decade. Meanwhile, jobs in legal services and finance fell, according to data from the New York City Economic Development Corporation.
“It’s becoming less and less uncommon to see tech workers in downtown office buildings,” Palmer says. “The stereotypical image of a tech worker is at a ping-pong table, and not something we normally associate with a Manhattan skyscraper.”
Standing beneath the girdings of the unfinished tower, Benioff, dressed in a blue suit jacket and matching button-down shirt, seemed to recognize the weight of responsibility that moving into the new building carries.
“I believe so strongly that all of our employees have an absolute duty to not only do a great job at Salesforce but also to volunteer in our schools and our public hospitals and to help our homeless,” he said. Hundreds of tech firms---including Yahoo!, Yelp, and Google---adopt part of Salesforce’s philanthropic model, which involves donating 1 percent of its equity, product, and employee time through volunteerism.
“Today, San Francisco is a bounty of riches, but as all of us know we also have our own concerns and problems for those that are less fortunate than we are,” he added. As a reminder of giving back, he said the top floor would be free for the public to use on nights and weekends. “The Ohana floor is the name of Salesforce’s culture,” Benioff said. “It’s the Hawaiian word for family.” That’s why Hawaiian priests had been going up and down the tower during construction, blowing conch shells, to sanctify the space.
After Benioff spoke, onlookers scrummed outside, where workers would lift the beam. Benioff was asked if he wanted to sign his name again before the cameras. No, he said, it looked fine the first time. As the heavy beam rose, a few in the crowd expressed discomfort at standing underneath as it slowly, slowly, made its way skyward, twirling, twirling, above their heads.
