Capital One Financial to downsize SF office to 40K sf in new location

Capital One Financial will move its operations to a newly leased 40,000-square-foot office in San Francisco, shaving two-thirds off its local real estate footprint in the process.

The Virginia-based bank signed lease and sublease deals for two of 15 floors at 100 California Street, in the Financial District, the San Francisco Business Times reported.

The bank inked a lease for one floor from Pembroke, which bought the 290,000-square-foot, Mid-Century Modern building in 2014 for $182.25 million.

Capital One also subleased a floor from Stem, a cleantech firm subleasing the story from master tenant Twilio, an unidentified market source told the Business Times.

Terms of both deals were not disclosed.

The bank now leases four floors at 201 3rd Street, or 120,000 square feet. Its lease at the building that bears its name expires in September.

Online listings show the bank has been advertising one of its floors for sublease.

Capital One reported owning and leasing 9.2 million square feet of offices last year, down 30 percent from 12.8 million square feet in 2018. 

The bank leased 3.2 million square feet of offices last year, according to regulatory filings, down 50 percent from 6.4 million square feet in 2017. 

Its portfolio of owned offices rose to 6 million square feet last year, from 4.8 million square feet  since 2017.

The 100 California deal will shrink the bank’s leased portfolio further.

Pembroke, owner of the 15-story building built in 1960, is still advertising a handful of full floors for lease. Pembroke and JLL planned to announce upgrades at the building this week, including a new dedicated outdoor seating area and a renovated facade for the lower podium, the companies told the Business Times. 

JLL is also seeking someone to lease a 6,000-square-foot restaurant on the ground floor. 

In the past year, Pembroke has also lost two retail tenants, 24 Hour Fitness and Holy Stitch, a tailor shop.

— Dana Bartholomew

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