As part of a cost-savings plan, Pacific Gas & Electric Co. has agreed to sell its San Francisco headquarters to Hines Atlas US LP for $800M.
The California utility company’s shedding of its 77 Beale St. and 245 Market St. assets in a deal brokered by CBRE comes as part of a commitment made last year to pass the net gain from the sale on to customers, according to a statement. The deal still requires approval by the California Public Utilities Commission.
The sale also includes property at 25 Beale St., 215 Market St. and 50 Main St., according to a Securities and Exchange Commission filing.
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"We've made a commitment to keep customer costs as low as possible, and one way we're following through on that is by selling non-core assets including real estate,” PG&E Corp. CEO Patti Poppe said in a statement. “This sale and relocation will achieve cost savings that directly help reduce customer bills. At the same time, it will give us an efficient and effective Bay Area workspace as we focus on delivering for all of the communities we serve.”
The sale could result in the distribution of between $390M and $420M to customers over the course of five years, offsetting energy rate hikes otherwise expected from safety and operational improvement work.
The plans follow PG&E’s emergence from bankruptcy last year and a subsequent focus on achieving financial stability and savings for customers. In February, the company sold Transmission Tower Wireless Licenses, which apply to more than 700 towers, to SBA Communications Corp. for $973M as another move toward financial stability.
If the S.F. headquarters sale is approved, PG&E will relocate to 300 Lakeside Drive in Oakland in 2022. The move is expected to yield cost savings and provide more flexibility for office layout and density. The location is also anticipated to be more convenient for PG&E employees, as a majority live in the East Bay.
"We're so excited to deepen our ties to the wonderful Oakland community. As an economic and innovation hub for California, Oakland is the perfect place for PG&E to call our hometown,” Poppe said.
As part of the intended move, PG&E would consolidate two other East Bay locations in San Ramon and Concord into the Oakland headquarters.
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