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Salesforce Inc. plans to give up nearly one-quarter of its office space in Indiana’s tallest building, according to a new listing posted Thursday by the Indianapolis office of Dallas-based brokerage CBRE.
Salesforce put three contiguous floors at Salesforce Tower—about 61,700 square feet—on the market for sublease, accounting for 24.7% of the 250,000 square feet it leases in the 48-story office building at 111 Monument Circle, where it is has been a signature tenant since 2017.
The move comes a day after the company announced it was giving up the remaining 100,000 square feet of space at its Salesforce East campus in its headquarters city of San Francisco. The company employs nearly 80,000 people worldwide—about 2,300 in Indianapolis—but has been focused on cutting costs and restructuring its real estate in the face of a possible economic downturn.
The sublease for Salesforce Tower includes floors 20, 21, and 22, with floors 20 and 22 each consisting of 21,025 square feet and the 21st floor having 19,739 square feet, according to a brochure from CBRE, which does not include an asking rent price.
Each floor is expected to be fully furnished, with roughly 90 work stations and 15 meeting rooms per floor. The sublease would expire June 30, 2030.
Salesforce currently occupies 13 floors in the 1.1 million-square-foot tower. It also occupied space in the five-story OneAmerica Gibson Building at 433 N. Capitol Ave. but vacated the building and subleased much of the space to other users.
In January, Salesforce filed paperwork with the U.S. Securities and Exchange Commission outlining a plan to lay off about 10% of its workforce and scale back on its office space to reduce costs. It was short on details about how specific divisions and bases of operation would be affected, and it’s still unclear how many employees in Indianapolis have so far been affected by the layoffs.
A Salesforce representative said the latest sublease plan in Indianapolis was part of the strategy announced in January.
Salesforce entered the Indianapolis market in 2013 by acquiring locally based cloud marketing firm ExactTarget for $2.5 billion. In 2016, it announced a plan to relocate much of its local operations into what was then called the Chase Tower. It secured naming rights for the building and added Salesforce signage in 2017.
The tower is owned by Oklahoma City-based Square Deal Investment Management, which bought it for $192.5 million in early 2021.
Salesforce, whose tools for sales and customer service have made it one of the most high-profile cloud computing companies, is one of several major tech companies to reduce their workforces nationwide in the past several months after over-hiring early in the pandemic.
Local representatives for CBRE declined comment and directed inquiries for more information to Salesforce.
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Glad they didn’t give up the whole building for the new Chicago tower. I was really worried the whole office would move north
Scott Dorsey is still local and active in the local tech scene. He’s also on the board of Salesforce. I don’t anticipate them leaving. And when I checked a little while ago, Salesforce had many positions hiring in Indy.
This 25% space reduction is a relatively small reduction in the world of remote work. I don’t think it’s worth worrying too much about by itself.
Scott Dorsey is not on the board of Salesforce.
https://www.salesforce.com/company/leadership/
Salesforce is expected to offload as much as 125,000 square feet of office space in its 60-story namesake skyscraper in Chicago, about two months before the company is set to move into the nearly completed trophy tower.
San Francisco-based Salesforce will begin formally marketing a large block of its 500,000-square-foot space along the Chicago River soon, a company spokeswoman confirmed, citing previously announced job cuts and plans to cut back on real estate.
Salesforce is set to move into the 1.2 million-square-foot tower, which broke ground in the early weeks of COVID-19, by late May.
Considering the prevalence of remote work, a 25% reduction in physical footprint isn’t bad. Many companies that aren’t tech companies and don’t have as much ability to allow remote work have cut much more office space, which is a lot more concerning.
It’s a 50 story file cabinet! Is the skyscraper dead? Will anyone ever build another office building skyscraper?
When necessary, towers been getting converted into hotels, apartments, and condos. I don’t think Salesforce Tower will get to that point, but that’s worst case scenario.
According to architects and developers, suburban-style complexes are harder to convert. We should keep a close eye on those to prevent a house of cards from falling.
Robert H.
Thanks for the info.
So glad to see that Scott Dorsey is still local and a strong advocate for
Indianapolis.
When We all are work from home what could possibly go wrong.
Located on floors 20-22 of a Downtown tower, the new Target will have great sight lines.
That’s probably never going to happen, let alone in this building.
I see what you did there, Channing K. 🙂