Is Bishop Ranch the right size for downsized Chevron footprint in East Bay?

Mum’s the word from Chevron––but brokers’ tongues are wagging ’s about the oil giant’s future in the East Bay.

The chatter started after a high-profile announcement earlier this week that it’s selling its 92-acre headquarters campus in San Ramon and offering to cover moving costs for employees that voluntarily move to its Houston offices.

A Chevron spokesperson would not answer questions about how much space the company is looking to lease or where. The company referred to a previous statement that it is staying in the city and moving to a “modern leased space” in the third quarter of 2023 in an attempt to “right-size” its office space.

That hasn’t stopped real estate professionals from making some basic observations and guessing that Chevron will be heading next door to Bishop Ranch, the 585-acre office park that is currently undergoing a transition into a mixed-use downtown for the city with retail, housing and office space.

When asked about Chevron’s possible future plans at Bishop Ranch, CEO Alex Mehran, Jr. would only say via email that, “For 40 years, Chevron has been our largest and one of our most valued customers at Bishop Ranch. Throughout those years, we have continuously worked with the company to meet its real estate objectives in the East Bay, and we will continue to do so.”

Chevron and Bishop Ranch have had a close relationship ever since the oil company began moving its operations from San Francisco to San Ramon in the 1980s. By the end of the 1990s it had sold off its two San Francisco office buildings and rented over 2 million square feet of office space in the 585-acre office park before opening its own campus, Chevron Park, on land adjacent to Bishop Ranch. Even with 1.4 million square feet of office space at Chevron Park, it continued to lease out additional space at Bishop Ranch for many years.

Now that Chevron is putting its campus on the market, Bishop Ranch is one of the top contenders for where it could move its headquarters, according to Stephen Jackson, VP of Investments at the East Bay branch of Marcus and Millichap.

“Bishop Ranch is a great property adjacent to Chevron,” he said via email.

Jackson said he was not surprised that the oil giant was looking to sell its campus, calling it “outdated” and adding that “moving out of California will help the quality of life of their employees” who will find a more affordable housing market in Texas.

Referring to a previous sale for a 45-acre parcel he helped broker in Livermore, he said he believed the Chevron property would trade for “similar metrics” of around $1 million per acre. Much as with the Livermore property, which was sold by Sutter Health to Harridge Development Group, he believes the new owner will be a “group experienced with master planning” who will look to turn the property into a multi-use site similar to what Bishop Ranch is doing, but with more housing and limited retail.

“This is a great opportunity to reshape the area with multiple uses,” he said.

Despite Chevron’s downsizing and the turn away from office space in the area, Jackson said the East Bay is still a “thriving” spot for companies that want a Bay Area presence. He pointed out that Chevron will still have a “significant footprint” in the state and expected its land in San Ramon to “have lots of competition” when it comes to market next year.

At the same time, he said he can understand why companies such Chevron are leaving the Bay, given the high costs of living.

“Those companies need to make decisions for the best of their company and employees,” he said. “We will miss them but they will miss being in Northern California.”

Read more

Houston

Chevron to sell 92-acre HQ campus in San Ramon