your help to work with us. the only way we can do this is if we engage each other about the appropriate replacement, and i want to do that with you. all this talk of economic development and job creation brings me back to one of my biggest priorities as your mayor. and what i will do and what i will continue to do highly as your city administrator and now as your mayor. what all of us do what we want to do here and what we have been doing, we just need to keep families in san francisco. we need to make sure our workforce, whether they are high-tech, green tech, or in the trades, make sure that people can earn a livable wage, that they can stay here in san francisco, and we will do what we can make sure families remain in the city. we cannot do it alone without our friends in business, without all of you. we need to work together to make sure san francisco remains

a unique and diverse and innovative place. with our progress in creating san francisco as an innovative business hub, it is essential we continue to invest in our residents, our businesses, and our infrastructure. without this commitment with our partners in the business sector, we will not be succeeding. i want to assure you that you have a grateful mayor every day that will work with you to get this done. thank you very much. [applause] >> thank you. so much good news there. john has been planning director for the city and county of san francisco since 2008, having come here after five years as planning director for the city of seattle. all i hear is that was a good

higher, so i am not going to get heavily into his biography. he is at work on a series of comprehensive neighborhood plans, city-wide historic resource survey, updates on the general plan and, of course, always ongoing environmental reviews and development reviews. so please welcome the planning director. [applause] >> thank you. good morning, everyone. that is a tough act to follow. you kind of covered my stuff, and i really appreciate that. i will say, though, that i will apologize to you because i was not planning on presenting the results of the eir for america's cup. i will say and i will maintain my promise to you and the port and others that we are on track to get it done in november and planning commission is scheduled to act on that in december. i think in a record time.

i am very proud of that. it is one of those things we do on a daily basis that i know drives many of you crazy. as the mayor said, we're working on a number of initiatives, and i was going to review a couple of those today and perhaps get into a little detail on one that i find very exciting. i also wanted to start with a kind of overview of what has happened over the last 10 years or so. we have, thanks to my predecessor and a great staff and all my partners and the of the city departments here today, we now have plans in place for essentially the vast majority of the city where new growth is going to happen. that is something that is important from a number of standpoints. it is important to create certainty in our planning process and our approval

process. it is important that the communities and planning commission and the mayor and the board understand where we're going and it is important because many of these projects have been approved to the point where the development is fully entitled. specifically, what you see on this map represents over 65,000 new dwelling units, represents 110,000 jobs. about half of that number is fully entitled in three major projects, thanks to the efforts not only of the planning department, by -- but the san francisco redevelopment agency and the treasure in the development authority. that is an incredible accomplishment that 30,000 housing units can meet demand that we all know we have a housing crisis in the city and that demand can be met much more easily than can be done in the past. in addition, we have plans that we have completed for the four neighborhoods, the eastern neighborhoods, market octavia,

balboa park, visitation valley, and other areas representing almost 7000 units, and we have no plans under way for other areas that will complete that cycle. -- we have new plans under way. sentences could pose a growth will happen on about 15% of the land area of the city. that 15% is actually where we have concentrated our planning efforts over the past decade. i can sit here and promise you all that, having these plans approved means that the land use wars and fights in the planning commission will go away, and we all know that that will happen, of course, in the coming year. this will not and land-use lawyers. this will not in fights. it will not and appeals. but it does give us a level of certainty about where we're headed but at the community level and at the city level, and i think we should be proud of that. i would like to spend a little bit of time talking about the transit center plan, partly because i think it is an incredibly exciting project and partly because we are about to

release the eir and had a series of discussions at the planning commission and the board. plan is to create, as the mayor said, a dance, sustainable core for downtown in exactly the place that it should be, and run the largest transit center in the country outside of new york city. of course, i need to thank my partners on this -- the transbay joint powers authority and the san francisco redevelopment agency here and of course, both mayor lee and mayor newsom are huge supporters, and we appreciate that. the plan will do what was proposed in the 1985 downtown plan, which is to shift the center of downtown to the south around the terminal exactly where it should be. the investment by the public agencies through the tjpa gives us the opportunity to do this for the first time and add to

fulfill several objectives. it creates huge new job capacity. our analysis has been showing that given the downtown build out that we have experienced over the last 30 years, we were getting to a place where we had a 10 or 20-year capacity for new office space in the downtown, and this plan helps us increase that capacity for several more years. it creates a dance band -- as i said, perhaps the densest district outside the country outside new york on the terminal that can take advantage of and support the investment made in the terminal. most importantly perhaps, it actually creates a revenue source for completing the transit center by creating the opprobrium that it is and to allow the development to help pay for that transportation infrastructure. it actually takes advantage -- excuse me -- it actually takes advantage not only of the previous parcels that were occupied by the embarcadero freeway, but it weaves together the extraordinary effort of

bringing transportation into the heart of our downtown in the densest part of the downtown and still create a great, dance, walkable environment in the process. i should point out that the terminal itself is the largest multimodal terminal in the country under construction in the grand central station of the west. i should also point out that the tjpa and the public sector with your partnership in the city is the only entity in the country that is actually investing real dollars to support high speed rail. since the plan would increase height and density limits in the area, it was important for us to look at the skyline. bear with me on our planning talk for a few seconds, but it was important for us to look at when we talk of the buildings up to 1,000 feet what this will do to our skyline, what it will look like, how to maintain and make more distinct the city skyline. the city skyline today is characterized by what we most

see -- the transamerica building, the bank of america building, leaving conte hours, and a lot of similar height buildings. the terminal and the project the transit center will create a new focal point for the city in exactly the places where it should be and create a kind of new heart of downtown south of market which is exactly where we have been thinking it should go for the last 25 years. as seen from treasure island as well, the idea is to really create a punctuated skyline with the 1000-foot tower at the transit center and with the endpoints of the ring kind towers on the left and the trans america on the right -- the rincon towers on the left. it is also important to mention what this will actually resolved. under current zoning, there's about 6 million square feet of office space. we will be adding over 2 million square feet of that so that the total we get between office,

housing, retail, and hotels basis is almost 9 million square feet, which is about a 4 million square foot increment over what current zoning allows for us. i think it is important to recognize that this is being built not in some far distant part of the city but in exactly the parts of the city where high rises exist today and where we have the transportation infrastructure to support it. it will include major improvements of the streets and sidewalks, which we know will be desperately needed in that area and it will also include 11 acres of public parks, over half of which is on the terminal being built by the tjpa. importantly, it will also include a funding mechanism to help pay for all this. we can realize a net present value of over $250 million to support the transit center

through the development in the area as well as fees which will help support the park and open space improvements over time. moving on, i just wanted to mention a couple of other plans and projects that we are working on. in particular, the central corridor. the central corridor is our name for the planning effort that we are focusing on along fourth street. to support and be supported by the investment that the city is making in the central subway. this is an area of town that is kind of sandwich between downtown western soma, the tenderloin, and it is also an area that will see tremendous growth and development over the next couple of years. we are trying to capitalize on the transit investment, but here, rather than in some of the recent plans, our focus is going to be on job-producing space.

as you have all seen and as we have seen with the rents now being realized south of market, we believe there is a growing demand for companies who want to be in the city but do not want to be in a downtown high-rise. this gives them an option. as mission bay gets built out, we believe this is an incredible opportunity to accommodate businesses who want to be in the city, want to be in large offices, want to be on the edge of downtown but not in downtown. we are already seeing tremendous interest in this area in a number of ways. we will be looking for your help and support over the next couple of years. we believe this is an important next step. in working with that neighborhood and all of you, we think this plan can be realized by the end of next year. finally, i want to make a plug for our recently adopted better streets plan. it is a plan that really covers

that area that development does not occur on the, which is those areas of our city that are occupied by our streets and rights of way. this is 25% of the land area of my city. -- of our city. it occupies more land area than the other streets combined. this plan that was adopted by the board last year actually creates a template and a guide for how we create better >> i think we're approaching an interesting new era in the city's history pit of the projects that you will hear about today are projects that truly represents a new era in the city's history. i am also seen, almost four years here, we're also seeing an interesting new dynamic in the city and in city government that i have to mention. my colleagues here, monique, ed, jennifer, and others have really

formed a partnership to recognize the benefits and the value of working together. as was said earlier, all things are connected. it is my job to make sure that we connect those things that we are all working on and making sure that, at least through stronger growth, more equitable and sustainable growth for the city for the future. i am optimistic. and i think i would like to ask you all in -- you all to join a sign that optimism in the future. thank you. [applause] >> thank you. and we appreciate the connecting of all these dots for us. we asked charlie to talk about the twittery fact on market street and why shorenstein has made such a significant that on midmarket with its purchase of the former san francisco furniture mart that is now going to have twitter headquarters. he has been with shorenstein

since 1995 and manages of the company's acquisition activity in the investment performance of all of the assets throughout the united states. big job, bigger than i am describing, but he is really looking at the whole investment performance of all properties for shorenstein. great to have his perspective on midmarket and the real-estate market two please welcome charlie from shorenstein. [applause] >> well, thank you. i am glad i am speaking ahead of the america's cup, because i imagine there presentation will be 10-fold up what mine will be. so hang in with me here. to try to give context to midmarket, i would try to say a few words about san francisco in general. a quick, easy slide. vacancy rates in san francisco is slightly above 13%. this is city-wide. if you go sub market to sub

market, it can change quite a bit. the low point for landlords was 2007. we had single-digit vacancy. during that time, you would see some rental rate growth. we have been pretty fortunate as far as cities across america ago that we have had four positive quarters of absorption out. absorption really measures the underlying size of the office- using tenant base in san francisco. what that really means is job creation in the office-using sectors. we obviously could use a few more quarters of positive absorption. vacancy rates, once they get to around 10%, you see that landlords and tenants are on equal footing. this next slide here shows leasing velocity. leasing velocity really is a measurement of -- it can be a

good measurement of what people are feeling about the business climate. when things are slow, when you're in a recessionary period, most tenants are uncertain about their business future, and they will put off making major financial decisions often for five to 10 years. what we saw in 2007 is hardly anything that done in the leasing market. it is not surprising. if you go back many cycles, that is what happens. what we have seen in the last year-and-a-half is greater clarity of business future for many of the occupants in san francisco, and they are willing to make financial commitments. shorenstein saw this as an indicator that the market was starting to turn. in contrast to that was midmarket. depending on how you draw the lines of the various sub markets come amid market usually gets thrown into the civic center or a van ness corridor sub market. clearly the hardest-hit sections

of san francisco. historically, it was always very well-leased. it was buoyed by government, both federal government in city government and in large corporations. in the last several years, you have had a large move out from aaa of close to 400,000 square feet. a state, was triggered 50,000 square feet. bank of america has moved out of close to 1 million square feet. then you had the accidents of the west coast merchandise mart and market square, which was a million square feet. so this market really is a challenge right now. you think, why invest there? but we saw it as an opportunity to do something that was a little bit unique for us. we could put all of the resources of the shorenstein organization to work in one asset in our backyard and hopefully make a difference for

the neighborhood. we also saw it as an area of town that the mayor, who we spoke to today, he is out in front of this. he has made this a very important plank in his platform. it is not often that you have the opportunity to be alongside a city government that is helping a blighted area or troubled area to pull out of it. if i focus on where it is for a moment, market square is a full city block between ninth and 10th street. what we like about this is the investment that has already happened in the neighborhood. over the last five years, there has been about 2500 residential units developed in the neighborhood, and over the next five years, there is 1500 to 2,000 slated to be developed. i think the largest of which is

the crescent heights project at the corner of attend that market. i believe it is a two-hour property for 750 units of 4-rich residential. i am told a the first units will be available in 24 to 30 months. that is pretty exciting. it is a neighborhood that i think we'll really turned the corner over the next five to seven years, went to see all this residential built. what we have seen nationwide is a movement towards properties that are a little bit different than the high rise class a office space. what we have seen their tenants, particularly young tech tenants, like to differentiate their companies by going into creative office space. it is a combination of things. they want wide-open floor plans, high ceilings. they want something that is a little bit different than being in a rectangle cuba. they also want to be in an environment that has close

proximity to housing, public transportation, and would be supported by amenities that allows them to have this live, work lifestyle in close proximity. we think that, over time, midmarket will allow that. market square is a two-building complex, about 1.1 million square feet of space. the larger of the two buildings is 1355 market. it was originally constructed in 1938. it was added onto in the 1940's, 1950's, again in the 1960's, and finally in the 1970's. today is 11 stories, about 750,000 square feet. the second party to this project is 875 stephenson. i do not have a good picture. i do not think there is a good picture of it. [laughter] so that is going to be our next challenge, a kind of phase two of the project. we're looking at reece getting the property so it is something

that is a little more attractive than it is today. phase one, 1355 market, we're pretty excited about. it is a property that we were fortunate enough to have twitter become interested in. and with the mayor's help, we were able to get a lease transaction done at the property. i have got to think twitter for being a good corporate citizen and being willing to come to a neighborhood that historically is not one that people are looking to go to. but i think over time, it will be maine and maine for a lot of tech tenants in san francisco. they have taken 220,000 square feet, and hopefully over time they will even double in size. the property, if you had not had a chance to tour it, give myself or someone else involved. we would be happy to bring you through. what is really neat about this property is there is an opportunity for us to blend the old architecture, many art deco

touches throughout the property, with brand new infrastructure, and turn it into a class a office building. we have had some success in new york city with a property that was a 2.former industrial buildg that has been turned into office space. it has been successful over the years. we have seen other developers to projects like this in chicago, elsewhere in new york, and their plan the examples in san francisco. -- there are plenty of examples in san francisco. market square is a unique opportunity for us, again, to put to work all of the shorenstein resources. the property, over the last five years, has been close to 100% vacant. there are a few city uses in there now. but it has been struggling since the merchandise mart laughed.

the shorenstein brand is a national real-estate investor. but really, i think our brand is the strongest here in san francisco, where the roots of the company are. here, we have an opportunity to invest at least $80 million into renovation. and spend a lot of time leasing the property, something we have been able to do over good cycles and bad cycles in san francisco. and the space is definitely different, which is not what the shorenstein companies typically known for doing. but we have had success in other markets doing it. we think that there's this big demand sector that is growing in san francisco for creative office space. it is not just tech. it is advertising, architectural firms, and consulting. so we're pretty excited about the project.

lastly, i think that what really made us keenly interested in this project is an opportunity for a grenade -- brand-name company like shorenstein to make a significant investment into a troubled area in san francisco. and we're very thankful to twitter for hanging in there with us, and i think that they legitimized the project. it's proof of concept from day one, and i think they will be applied piper for other tech firms to come to the neighborhood. that will benefit not only us, but the surrounding buildings and a neighbor heard that are struggling from vacancy right now. i encourage everyone to come by and see our project, and i hope that in five years' time we have a lot of residential surrounding us and a well-leased property, and it is something that the city, the mayor's office, and the shorenstein company can be very proud of. so thank you for your time

today. [applause] >> and treader moves in in mid- 2012, and i think we will see that as such a transformer the catalyst to that region. so thank you. in addition to the twitter effect on midmarket, there is no doubt that the salesforce.com announcement for the massive mission bay campus headquarters at a big effect. in fact, i heard a brokerage china basin saying he was playing a lot of golf. -- before that happened, and he is here was kind of on fire after that. so many deals as a result of that excitement that was created in the synergy. again, i am not going to -- you have heard a lot about it. now we're going to get into depth about what this very sense of place that is going to be created at this wonderful campus. so please welcome bruce francis, the chief messaging officer and

salesforce.com. he will describe the unique design characteristics and some of the impact that this campus at mission bay is going to have. it will certainly mean a lot of jobs. he is responsible for helping define and shape salesforce.com's strategic direction worldwide and has helped least -- release the launch of almost every salesforce.com since he started at the company. please welcome bruce francis from salesforce.com at mission bay. [applause] >> good morning. it is great to be here, to have a chance to talk about a project that is going to be court to sentence is ago, we hope. and it is very important to the success of salesforce.com. we're going to take a couple of minutes to familiarize you with the company. wherever we go in san francisco,

we're still introducing ourselves. to have any customers in the room? the rest of you are prospects in our view. [laughter] so i hope you'll pay attention to the next few minutes, just a couple slides on what salesforce is. any time we speak anywhere, we are a publicly traded company. i want to remind you of our safe harbor statement. if you cannot read it all there right now, why don't you take a look at it. it is on our website. we encourage you to go there and check it out. every company has a mission. our mission salesforce mission .com is to be the -- our mission at salesforce.com is to the the evangelista cloud computing. do you know ellicott computing is? if you have used amazon and.com, you have used cloud computing.

it is really taking over at businesses manage and share their information, and increasingly collaborate. and we have been growing at a rapid rate since we were founded in 1999. we recently passed a $2.1 lynn annual revenue -- annual revenue, and we have about 100 two thousand customers worldwide. it is this kind of growth that we have been experiencing that is behind hour drive to build the new campus. we need to attract and retain the smartest software engineers, the best sales people, the most kick ass marketers we can get so they will have a home for future success in san francisco. the cloud computing model has taken off with businesses, because it has a few key attributes that everyone can relate to. first of all,