Wells Fargo will keep a significant stake in San Francisco after signing the biggest lease since the pandemic started, a 10-year renewal on its headquarters office.
The national bank, whose roots date back to the California gold rush, has recommitted to leasing over 622,300 square feet of office space for its headquarters in the Financial District, the San Francisco Business Times reported.
Wells Fargo closed a deal to renew its lease at 333 Market St., a building owned by Columbia Property Trust. The bank has occupied the space since 2018 and extended for 10 years, unidentified sources said. Terms of the deal were not disclosed.
The renewal follows a series of office downsizing moves by Wells Fargo during the pandemic.
In April, the bank moved out of a 34-story skyscraper at 45 Fremont St. in the Financial District, where it had occupied 146,500 square feet for two decades.
It was also looking to list a 13-story, 332,670-square-foot tower at 550 California St. in Downtown, aiming to save money by trimming its real estate footprint by 7 percent.
Wells Fargo said it was part of an effort to assess its real estate portfolio to ensure it meets the needs of employees and customers, respond to consumer and economic trends and manage costs.
“We are committed to our San Francisco-based employees,” the bank said in a statement. “We will continue to have a major employee presence in San Francisco, but we have more real estate than we need to support these employees. San Francisco remains the location of our company’s headquarters.”
The 333 Market renewal is the largest lease signed since the start of the pandemic, eclipsing another large renewal planned by Levi Strauss & Co. for its Levi’s Plaza headquarters in Jackson Square, according to the Business Times.
That 335,000 square-foot deal was announced in June 2021 and is still pending as the retailer continues to negotiate the terms with landlord Jamestown.
Overall office vacancy dipped from 22.4 percent at the end of last year to 21.8% in the first quarter of 2022, according to real estate services firm JLL.
In an office market that once had less than 4 percent vacancy, companies continue to give up space. Last month, close to 380,000 square feet became available for leasing.
Among the many companies that have downsized: data analytics company Splunk gave up its 215,000 square foot headquarters; digital real estate company Qualia Labs put up nearly 40,000 square feet for sublease; real estate law firm Farella Braun + Martel gave up 125,000 square feet; while the State Bar of California plans to sell its 250,000-square-foot headquarters.
[San Francisco Business Times] – Dana Bartholomew
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