Hines Atlas US LP, a fund affiliated with real estate investor Hines, recently agreed to buy the San Francisco headquarters of utility and energy company Pacific Gas and Electric (PG&E). The complex, which is made up of two properties totaling 1.4 million square feet of San Francisco office space, was reportedly sold for $800 million.
The two properties — located at 77 Beale St. and 245 Market St. — were allegedly the subject of a bidding war between several high-profile firms, just missing the mark of their initial $1 billion valuation due to necessary renovation investments.
PG&E Relocates to Oakland; Hines Bets on San Francisco Office Market
The property at 245 Market St. has been PG&E’s headquarters since its completion in 1925, while 77 Beale St. was built in the 1970s to enhance the company’s presence in the Bay Area. Now, PG&E is looking to relocate its headquarters to 300 Lakeside Drive in Oakland — about 20 minutes east of its current San Francisco headquarters — in a bid to simplify its footprint and lower costs. Two additional Bay Area offices will also be consolidated into the new headquarters — 3401 Crow Canyon Road in San Ramon and 1850 Gateway Blvd. in Concord. PG&E plans to begin the relocation in 2022 and expects it to be completed by 2023.
Hines Global Income Trust Inc. — a public REIT also affiliated with Hines — recently made the news with its acquisition of 1015 Half St., a 396,000-square-foot trophy office space in Washington, D.C. Back in San Francisco, Hines is also developing Parcel F, one of the planned additions to San Francisco’s skyline. The skyscraper will stand right next to the Salesforce Transit Center and will include 275,000 square feet of San Francisco office space, as well as 165 condominium units and 189 hotel rooms. In addition to the recent acquisition and the property under development, Hines has a total of 11 San Francisco properties in its portfolio.