After Chevron Deal, Sunset Feels “Bullish on Building New Offices”

Sunset’s Alex Mehran with 2600 Camino Ramon (Sunset Development, Google Maps)

Chevron sold its 1.3-million-square-foot headquarters in San Ramon to local developer Sunset Development after acquiring the property from the company in the early 1980s. The oil giant’s headquarters are located in the Bishop Ranch master planned development, a mixed-use office, retail and restaurant project in San Ramon, which is owned by Sunset.

Chevron will downsize its headquarters from a 92-acre campus to a 400,000-square-foot building in Bishop Ranch, and plans to move thousands of employees to Houston.

Public records indicate Sunset paid nearly $175 million for the Chevron headquarters, according to the San Jose Mercury News. Sunset did not disclose future plans for the site at 2600 Camino Ramon and stated “this parcel is at the gateway to Bishop Ranch and will be a key part of our planning as we create a distinct California community.”

For now, Sunset will work with Chevron to create a headquarters building that will entice employees to come into the office at a time where many Bay Area employees continue to work remotely.

“It’s not fun when no one is in the office, and not only that but the lights remain on, so I think companies are really trying to find a way for people to gather in a way that makes them want to come in,” Alex Mehran Jr, president of Sunset, told TRD. “You also need to support all the people who might not have a fancy home office. I think us leaders sometimes have a bias where we think everyone has a home office where you could block out noise, but that’s not the case. Most people are working in a closet or bedroom.”

While the demand for housing could encourage Sunset to redevelop the site into residential units, Mehran sees an opportunity for suburban cities, such as San Ramon, to capitalize on employees’ work preferences to build office space closer to where they live.

“There’s a whole laundry list of issues of people moving out of the city encounter, and one of the biggest is the commute,” Mehran said. “People made an issue with their pocketbooks and said we’re going to work where we live. We really need to put offices where people live and our development team is looking to take advantage of that. We’re really bullish on building new offices in this area.”

The Bishop Ranch development is planned to create a “suburban downtown” in the East Bay where people can purchase housing at a lower cost compared to other parts of the Bay Area and have a centralized community, according to Mehran. A large part of creating housing is providing nearby retail centers such as the $300 million, 300,000-square-foot City Center Bishop Ranch at 6000 Bollinger Canyon Road that opened in late 2018.

“We cater to people that want a better lifestyle and want recreation,” he said. “We need to add a lot more retail, along with the housing, to create more opportunities to get people from the Bay Area.”