Summary
Salesforce.com, Inc. (CRM) filed an 8-K on January 5, 2012, to report a significant material definitive agreement. The company entered into an 18-year office lease for approximately 400,000 rentable square feet at 50 Fremont Street in San Francisco, California. This lease represents a substantial long-term commitment to office space in a prime location, indicating confidence in continued growth and operational needs. The lease agreement, with an estimated cost of $339 million, includes standard triple net operating expenses and spans from early occupancy in April 2012 to expiration in April 2030. Notably, Salesforce secured favorable terms such as multiple five-year renewal options, an option for additional space, and importantly, the right to purchase the building within a specific window in late 2017/early 2018, along with a right of first offer to purchase throughout the lease term. These provisions suggest a strategic long-term real estate strategy for the company.
Key Highlights
- 1Entry into a material definitive agreement for a new office lease.
- 2Leased approximately 400,000 rentable square feet at 50 Fremont Street, San Francisco.
- 3Lease term is 18 years, commencing with phased delivery starting April 1, 2012, and expiring April 30, 2030.
- 4Total lease cost estimated at approximately $339 million over the term, including triple net operating expenses.
- 5Secured two five-year options to extend the lease term.
- 6Included an option to lease additional space and rights to sublease, assign, or transfer the premises.
- 7Granted the right to purchase the building between December 1, 2017, and November 30, 2018, and a right of first offer to purchase.