Visa to vastly expand SF headquarters with move to Giants waterfront project

Visa’s decision is unusual for a few reasons. While many financial services companies have reduced their San Francisco workforces amid the tech boom, Visa is expanding. Visa is also consolidating around 3,000 tech workers in a large satellite office in Foster City — moving them out of San Francisco at a time when many companies are making tech their primary focus in the city due to the soaring cost of office space.

Visa said having its tech team under one roof to collaborate on projects made more sense than splitting them between San Francisco and Foster City.

“It’s important to have a dynamic office environment that encourages collaboration, inspires creativity and reflects our stature as a world-class brand,” Visa CEO and Chairman Al Kelly said in a statement. “We’ve been very thoughtful about this decision and are excited to have two world-class locations for our Bay Area community of employees and partners.”

The company has been in the Bay Area for over 60 years, and it wants “to re-invest in San Francisco and Foster City to better support our talented team of employees and growing business needs,” Kelly said.

Workers will also move from a smaller Palo Alto office to Foster City. Other divisions, including administration, marketing, sales and human resources, will work out of San Francisco.

Some old-line financial companies like Wells Fargo and Charles Schwab have recently cut jobs in San Francisco and focused on growing in cheaper places like Austin, Texas, and Denver. (Visa also has a major technology hub in Austin.)

But Visa has a different business model, and taking a slice of all payments made with its credit cards has proved lucrative. Last month, the company reported strong earnings, with over $12 billion in profit for the year ending Sept. 30, up 11.5% from the previous year. Its stock hit a record high in September.

Thanks to its size, acquisitions and technology, Visa is “well-positioned for the evolution of digital commerce and (financial technology) and recession-resistant growth,” Bloomberg analysts wrote recently, as they forecast further revenue growth.

It’s a positive sign that Visa is staying in the Bay Area and not leaving California, said Ken Rosen, chairman of UC Berkeley’s Fisher Center for Real Estate and Urban Economics. Corporate giants McKesson and Bechtel, once San Francisco stalwarts, recently moved their headquarters out of state. Bank of America, which started the credit card program in 1958 that led to the creation of Visa, was based in San Francisco and is now headquartered in Charlotte, N.C., after being sold to NationsBank in 1998.

The Mission Rock project, for which the Giants are a co-developer, is 12 years in the making. It will start construction early next year, with plans to transform 28 acres of parking lots into 1,200 residential units and up to 1.4 million square feet of office space. An unprecedented 40% of the housing will be designated affordable, with the project’s fees for office space helping pay for it.

“I am excited Visa is coming to one of our city’s newest neighborhoods, staking their company’s future in San Francisco and bringing their headquarters to our amazing community in Mission Bay,” San Francisco Mayor London Breed said in a statement.

The project’s first phase includes four residential and office buildings, including Visa’s tower, and a new China Basin Park, just south of the Giants’ ballpark, Oracle Park. Scandinavian architecture firm Henning Larsen designed Visa’s tower, which was inspired by the Devils Postpile rock formation in the Mammoth Lakes area of Mono County. It has terraces with greenery and views of San Francisco Bay. The Giants’ partners are developer Tishman Speyer and the Port of San Francisco.

“Visa’s deep commitment to corporate responsibility, inclusion and improving lives makes them the perfect partner for Mission Rock, and we look forward to working with them over the coming months and years to create San Francisco’s newest neighborhood and destination,” Giants CEO Larry Baer said in a statement.

Visa didn’t disclose its rent, but prices in nearby Mission Bay and in new Transbay towers can exceed $100 per square foot, according to brokerage data.

The company moved its headquarters from San Francisco to Foster City in 2012, but it signed its lease at One Market Plaza in San Francisco the following year. It moved its headquarters back to San Francisco in 2014.

“Having a major corporation commit to a significant expansion in San Francisco speaks to the desire for prime space in an urban, mixed-use, transit-oriented environment,” said Robert Sammons, Bay Area senior research director for Cushman & Wakefield, a real estate brokerage. “This can certainly be a recruiting tool for the kind of workforce all companies need today in competing in a ‘full employment’ environment.”

San Francisco’s unemployment rate fell to a record-low 1.8% in September.

Visa’s deal, which comes before Mission Rock starts construction next year, also reflects the limited opportunities for office expansion in San Francisco’s red-hot market. Last year, Salesforce leased a tower in the Transbay district, near Salesforce Tower, that hasn’t been approved. Pinterest signed a deal in March at 88 Bluxome St. in the South of Market district, months before the project was approved. Companies traditionally sign leases when an office project is already under construction and within a couple years of opening, which reduces the risk of delays. But companies are committing earlier in the Bay Area amid strong competition for new offices.

Another payments company, the $35 billion startup Stripe, is leaving San Francisco because of lack of office space and moving to South San Francisco. Visa’s market capitalization is $386.5 billion, more than 10 times Stripe’s private valuation.