Alexis C. Madrigal recently published a piece about the Salesforce Tower in San Francisco called: The Tower at the Heart of the Tech Boom. At 61 floors and 1,070 feet, it is now the tallest building in San Francisco and the second tallest building west of the Mississippi River after the Wilshire Grand Center in Los Angeles.
Hines and Boston Properties are the developers of the building. Pelli Clarke Pelli is the architect. And Salesforce is the anchor tenant. In April 2014, it was announced that they had leased 714,000 sf on floors 1, 3-30, and 61. (Get that top floor.) So almost half of the building.
Perhaps not surprisingly, Madrigal calls the Salesforce Tower the “the most visible monument to the industry [tech] in the region and the country.” It is a demonstration of the power and reach of Silicon Valley. San Francisco has a new symbol. The TransAmerica Pyramid now feels inadequate.
Though interesting, this is actually not what I want to talk about today. I’d like to talk about what it took to build such a tall building in a seismically active city like San Francisco. Unfortunately, this feels timely given that the sinking Millennium Tower is getting so much attention right now.
The structural engineer for the Salesforce tower is Seattle-based Magnusson Klemencic Associates (MKA). They are a world-renowned structural and civil engineering firm that have been around since the 1920s. Other projects they are currently working on include the third tallest building in Chicago.
The tower’s seismic force-resisting system is made up of reinforced concrete shear walls that surround the central elevator and exit stair core. These walls are 24 to 48 inches thick. Here is a plan taken from a STRUCTURE Magazine post written by Ron Klemencic of MKA:
The tower’s foundations have been well documented, or at least frequently mentioned, because of how deep they had to go down. The site has poor soil conditions (fill, sand, San Francisco “old bay clay”, and weak bedrock), and so given the weight of the tower the only option was to go down to bedrock – approximately 250 feet below grade.
The foundation system they ended up going with uses something called Load-Bearing Elements (LBEs). The typical LBE measures 5′ x 10.5′. The entire foundation system uses 42 LBEs and a mat foundation that varies in thickness from 14′ around the core to 5′ around the perimeter. (See image below.) The LBEs were brought down to rock. And in some cases, they went down more than 310 feet below grade.
As a condition of buying the site, the Transbay Joint Powers Authority required proof that any future tall building would not negatively impact the surrounding structures – including the adjacent Transbay Transit Center – and that it would perform under a Maximum Considered Earthquake (MCE) event.
So while the tower itself may be a symbol for the new world, its structural system also achieves many firsts in terms of how to build a supertall in a seismically active region.
Please keep in mind that I am not a structural engineer. I just pretend to be an architect sometimes. If you’re interested in more of the details, check out the post by Ron Klemencic. All of the above information was taken from there.
The Q3 2017 Moneytree Report from PwC and CB Insights was recently released. It tracks venture capital trends in the US and globally.
Last quarter, US venture capital-backed companies saw $19 billion in total funding across 1,207 deals. Perhaps most notably for the US, funding in the NY metro area rose 57% to $4.227 billion and inched out the San Francisco Bay Area ($4.177 billion).
But this was really because of two epic rounds to WeWork (NYC HQ) totalling around $2.5 billion. Also, Silicon Valley ($2.2 billion) is tracked separately to the San Francisco Bay Area in the report.
Still, there’s a real sense that the New York tech ecosystem is on the rise and that it is probably furthest ahead in the US in terms of being able to catch up to California.
Last week, MongoDB (NASDAQ: MDB) went public. Albert Wenger, who is an investor in the company, argued on his blog that this is an important milestone for technology companies based in New York.
It’s the first core technology company (instead of applied technology company) to go public in the city and it’s a big step forward in terms of demonstrating that “geography is no longer destiny.”
You don’t have to move to the Bay Area to win in tech.
In the US you can reduce your taxable income by deducting the mortgage interest you pay toward your principal residence. You can’t do this in Canada, at least not on the property where you live.
However, there are limitations. It is capped at loans up to $500,000 or up to $1M if you’re married and you file jointly. On the other end of the spectrum, you also need a loan big enough such that an itemized deduction will save you more money than the standard deduction.
Not surprisingly, the MID is popular among homeowners. And from a public policy standpoint, one of its selling features is that it’s supposed to stimulate homeownership. But many have argued that it doesn’t actually do this – it unequally benefits people with larger mortgages. (Canada has a higher homeownership rate than the US.)
Right now it looks like you need to buying a home worth at least $305,000 in order for the mortgage interest deduction to make economic sense for you. Again, if your loan isn’t big enough, you’re simply going to opt for the standard deduction.
In 2015, about 22% of all US taxpayers opted to take advantage of the MID. According to Zillow, only about 29% of all homes in the US are valuable enough for the MID to actually make sense. Though in some cities, like San Francisco, it’s pretty much all of the homes. Of course.
Zillow also recently looked at what the recent tax reforms put forward by the Trump Administration would mean for the MID and the real estate market.
One of proposed changes is a doubling of the standard deduction. What this means, based on Zillow’s math, is that you would need to be buying a home worth at least $801,000 today for the MID to make sense. This also means that the deduction would now only benefit about 5% of all homes in the US.
This would seem to only exacerbate the criticism that the MID does not in fact stimulate homeownership in the segment of the market that needs it the most. But perhaps this is the only politically palatable way of removing it – gradually.
Photo by Erol Ahmed on Unsplash