SAN FRANCISCO AND OAKLAND, CALIF. — PG&E Corp. (NYSE: PCG), parent company of West Coast utilities company Pacific Gas and Electric Co., has entered into a long-term lease at 300 Lakeside, a 824,469-square-foot office building situated along Lake Merritt in Oakland.
Starting in 2022, the publicly traded firm will move away from its longtime downtown San Francisco headquarters at 77 Beale St. and 245 Market St. The company plans to sell the buildings, pending approval of the bankruptcy court.
PG&E entered into bankruptcy protection in January 2019 that included a $13.5 billion settlement for approximately 70,000 victims of the Northern California wildfires in 2017 and 2018, according to the San Francisco Business Times. The company’s power lines were reported to have sparked the fires.
PG&E plans to request approval from the California Public Utilities Commission to return the net gain realized upon the future sale of its San Francisco headquarters to its customers. The company currently owns and occupies roughly 1 million square feet of office space in San Francisco, according to the San Francisco Business Times.
PG&E’s lease in Oakland includes a purchase option from landlord TMG Partners taking effect in 2023, the same year that PG&E plans to complete its phased move into the recently renovated office building. TMG will continue upgrades of the 28-story property on behalf of PG&E, including design, engineering and constructing of new workspaces. The owner plans to finish renovations in 2023.
“Our new Oakland headquarters will be significantly more cost-effective, is better suited to the needs of our business and is a critical part of fulfilling our commitment to operate in a fiscally responsible way that will enable us to achieve our operational and safety goals,” says Bill Smith, incoming interim CEO of PG&E Corp. “Savings from lower headquarters costs will tangibly benefit our customers financially.”
PG&E also plans to consolidate two other East Bay satellite office locations — 3401 Crow Canyon Road in San Ramon and 1850 Gateway Blvd. in Concord — into the new Oakland headquarters, beginning in 2025. This plan will simplify PG&E’s Bay Area real estate footprint and lower its operating costs, as well as provide an easier commute time as the company says the bulk of its workforce resides in the East Bay area.
“We are pleased to assist PG&E as it emerges post-bankruptcy and seeks cost and operational efficiencies,” says Matt Field, president of TMG Partners. “We recognized that 300 Lakeside could provide a transitional opportunity where the company is able to optimize its footprint and phase into the new space in a compact timeline in a location that is easily accessible to a majority of their employees. We worked together to structure the transaction to provide the flexibility for the company to elect whether to own or lease its completed headquarters.”
Built in 1960 as a headquarters for Kaiser Permanente, 300 Lakeside features new common areas, a conference center with a 393-seat auditorium, bike room, tenant lockers and showers, modern elevators, café and a food truck zone.
The campus also includes a 1,339-stall parking garage with a landscaped and open rooftop and approximately 130,000 square feet of retail and office space in a two-story building at 344 Thomas L Berkeley Way. TMG Partners will retain ownership of the garage and Thomas L Berkeley Way building.
Founded in 1984 and headquartered in San Francisco, TMG Partners is a real estate development and management company with a portfolio of more than 30 million square feet across Oakland, San Francisco, San Jose and other Bay Area cities that includes office, retail, residential and industrial properties.
PG&E Corp. is a holding company headquartered in San Francisco and is a separate entity from Pacific Gas and Electric Co., an energy company that serves 16 million Californians across a 70,000-square-mile service area in Northern and Central California.
PG&E’s stock price closed on Monday, June 8 at $12.70 per share, down from $19.77 a year ago.
— John Nelson