Pacific Gas and Electric (NYSE: PCG) will sell its iconic San Francisco headquarters to a real estate venture for $800 million, the company said Monday.
The deal with Hines Atlas US includes PG&E properties at 77 Beale St. and 245 Market St., in the heart of the city’s high-priced financial district.
The sale comes nearly a year after PG&E emerged from an extended bankruptcy process stemming from its role in sparking some of the most destructive wildfires in California history, including the 2018 Camp Fire, which killed 85 people and destroyed the town of Paradise. (See Lawyers Close PG&E Bankruptcy Case.)
It represents what is supposed to be a significant cost-cutting measure for the company, which is moving its headquarters to lower-priced Oakland, across the San Francisco Bay, beginning next year.
“We are working hard every day to make fundamental changes at PG&E and become the utility our customers expect and deserve,” PG&E CEO Patti Poppe said in a statement. “We’ve made a commitment to keep customer costs as low as possible, and one way we’re following through on that is by selling non-core assets including real estate.”
Closing of the transaction is contingent upon approval by the California Public Utilities Commission. The utility is also asking the PUC for permission to return up to $420 million of the proceeds from the gain on the sale to its customers over five years.
“This offset would help moderate rate growth as the company continues to make significant safety and operational investments,” PG&E said.
PG&E said its new Oakland headquarters will use space more efficiently and better accommodate new working arrangements in a post-COVID-19 pandemic environment. It will also reduce commute times for most of its headquarters-based employees, many of whom already live in the East Bay, the company said.
“We’re so excited to deepen our ties to the wonderful Oakland community. As an economic and innovation hub for California, Oakland is the perfect place for PG&E to call our hometown,” Poppe said.
