Who said office is dead?
Although the work-from-home shift is sure to endure in some capacity, two big tenants inked lease renewals at the San Francisco office tower co-owned by Vornado Realty Trust and the Trump Organization.
Bank of America committed to 10 additional years at 555 California Street and will be consolidating all its San Francisco offices into the tower. Goldman Sachs renewed its entire 90,000-square-foot lease, Bloomberg reported.
Vornado announced the leases on its fourth-quarter earnings call as a triumph in the country’s worst-performing office market.
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“We have never lost a major tenant at this building,” said president Michael Franco on the call. Rental income at 555 California rose slightly year-over-year in the final quarter of 2020, while rental income in New York and theMART in Chicago fell.
San Francisco office rents and occupancies are forecast to slip 22 percent this year as more companies embrace remote workplaces, per Bloomberg. Out-migration has been especially pronounced in the nation’s most expensive housing markets, notably San Francisco and Manhattan.
Vornado and the Trump Organization tried to sell a 70 percent stake in their Bay Area tower and a Manhattan property, 1290 Avenue of the Americas, last year. Vornado halted the effort in November and is focusing on refinancing the assets.
[Bloomberg] — Erin Hudson