Zendesk Doubles Down on Mid-Market DreamSeptember 13, 2013
San Francisco Business Times
by J.K. Dineen
Zendesk is tripling its Mid-Market campus with a 73,000-square-foot expansion into the historic Eastern Outfitting Co. building at 1019 Market St.
With the full building lease, the customer service software company will occupy about 110,000 square feet in two buildings near the corner of Sixth and Market streets. Zendesk’s current office is at 989 Market St., where it occupies approximately 42,000 square feet. Zendesk was one of the first tech companies to embrace the city’s effort to lure creative companies to Mid-Market.
The building was bought two years ago for $9.5 million by San Francisco-based Cannae Partners and financial partner Westport Capital Partners LLC. Contractor Howard Wright is in the process of completing a $9.5 million renovation that will highlight the building’s wooden beams, brick walls, high ceilings and view down onto Market Street to the north and Stevenson Street to the south.
Zendesk, which was represented by Donette Clarens and Liz Hart of Cornish & Carey Newmark Knight Frank, did not return a call seeking comment. Cannae Partners, which is headed up by partners Jay Atkinson, Bob Basso, Jamin Seid, also declined to comment. As did Mark Geisreiter and Matt Kroger of the CAC Group, who represented Cannae Partners.
Talking to the Business Times earlier this year, Atkinson said he and partners scoured South of Market and Showplace Square before finding a historic Mid-Market building that could be adapted for the creative user who now dominates the San Francisco leasing market.
“Mid-Market is definitely a new submarket within the city, but it’s quickly becoming a very proven one, considering the amount of institutional investment pouring into office, retail, or multi-family,” he said.
Even in a neighborhood with some noteworthy historic buildings, the Eastern Outfitting Co. building stands out. The seven-story 1909 building, designed by George Applegarth, features Corinthian columns and a five-story bay window.
The 1979 book “Splendid Survivors,” San Francisco Architectural Heritage’s guide to downtown San Francisco, described it as “a handsome example of an enframed window wall with a pair of giant Corinthian columns framing a large, angled bay window.” The book says the building had been regarded as a “leader in the expected rejuvenation of this part of Market Street” but that “unfortunately little else has followed its lead.” Architect and Engineer magazine called it “an example of simple monumental design adapted to the practical requirement of a commercial business.”
The family trust Cannae bought the building from had owned it for 40 years, bringing it up to current seismic standards in 2000 in hopes of landing a dot-com tenant. But the crash of 2001 put that notion to rest and the family partially filled it with the sort of tenants that had been there previously — a hodgepodge of garment businesses, artists and others. There were sealed doors and little offices with non-bearing walls scattered throughout the seven floors. Sheetrock and ceiling tiles covered up the brick and woodwork, according to Basso.