PG&E to sell San Francisco headquarters complex for $800m

PG&E to sell San Francisco headquarters complex for $800m

PG&E Corporation and Pacific Gas and Electric Company (PG&E) has agreed to sell its San Francisco headquarters complex, which includes 77 Beale Street and 245 Market Street, to Hines Atlas US LP, a Delaware limited partnership, for $800 million.

”In keeping with commitments PG&E made last year, the company is seeking California Public Utilities Commission (CPUC) approval to return the net gain realized on the sale to PG&E customers,” said the company in a statement.

PG&E said it remains on track for a phased move into its new headquarters at 300 Lakeside Drive in Oakland, beginning in the first half of 2022.

PG&E expects the move to Oakland to result in substantially lower headquarters costs over a long-term period.

Under the terms of the sale agreement, the transaction closing is contingent on CPUC approval of the sale. PG&E will be proposing to the CPUC to distribute approximately $390 million to $420 million to customers resulting from the gain on sale over a five-year period to offset future customer rates.

“We are working hard every day to make fundamental changes at PG&E and become the utility our customers expect and deserve,” said PG&E Corporation Chief Executive Officer Patti Poppe.

“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. 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,” she added.

“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,” continued Ms. Poppe.

PG&E also plans to consolidate two other East Bay satellite office locations—3401 Crow Canyon Road in San Ramon and 1850 Gateway Boulevard in Concord—into the new Oakland headquarters. This overall plan simplifies PG&E’s Bay Area real estate footprint and further lowers its real estate costs for the benefit of customers.

CBRE’s San Francisco Capital Markets team served as PG&E’s exclusive listing broker.