PG&E has requested authorization from CPUC to return the net gain realized on the sale to customers
Relocation to Oakland is expected to result in substantial savings in the long run
PG&E Corporation and Pacific Gas and Electric Company (together, “PG&E” or the “Company”) today announced an agreement to sell the Company’s headquarters complex in San Francisco, which includes 77 Beale Street and 245 Market Street , to Hines Atlas US LP, a Delaware Limited Partnership, for $ 800 million. In accordance with commitments made by PG&E last year, the Company is seeking approval from the California Public Utilities Commission (“CPUC”) to return the net gain realized on the sale to PG&E customers.
The CBRE Financial Markets team in San Francisco was the exclusive broker for PG&E.
PG&E remains on track for a gradual move to its new headquarters at 300 Lakeside Drive in Oakland, starting in the first half of 2022. This move is part of PG&E’s larger commitment to implement changes for the benefit in the long term of its customers and communities. PG&E expects the move to Oakland to result in a substantial reduction in head office costs over the long term.
“We work hard every day to make fundamental changes at PG&E and become the utility our customers expect and deserve,” said Patti Poppe, CEO of PG&E Corporation. “We are committed to keeping customer costs as low as possible, and one way to do that is to sell non-core assets, including real estate. This sale and relocation will result in savings that will directly contribute to reducing the number of customers. At the same time, this will give us an efficient and effective workspace in the Bay Area, as we focus on delivering services to all the communities we serve. “
Under the terms of the sales contract, the closing of the transaction is subject to the approval of the sale by the CPUC. PG&E will propose to CPUC to distribute approximately $ 390 million to $ 420 million to customers resulting from the gain on sale over a five-year period to offset future customer rates. This compensation would help moderate rate growth as the company continues to make significant investments in safety and operations.
Oakland’s new head office uses space more efficiently for PG&E’s workforce and offers greater flexibility in layout and density. Its design can both promote occupational health and safety and adapt to potential new working arrangements in a post-COVID-19 environment. In addition, most of the colleagues at PG&E Headquarters are expected to commute shorter and less impactful, with the majority living in East Bay and with multiple transportation options serving the Lakeside Drive location.
“We are thrilled to deepen our ties with the wonderful community of Oakland. As an economic and innovation center for California, Oakland is the perfect place for PG&E to call our hometown,” continued Ms. Poppe.
PG&E also plans to consolidate two other East Bay satellite offices – 3401 Crow Canyon Road in San Ramon and 1850 Gateway Boulevard in Concord – into the new Oakland headquarters. This comprehensive plan simplifies PG&E Bay Area’s real estate footprint and further reduces its real estate costs to the benefit of clients.
This sale is in line with PG&E’s focus on financial health and customer accessibility and is not expected to impact its equity requirements for 2021. In addition, PG&E announced another strategic sale of non-core assets earlier this year: the $ 973 million to sell wireless licenses for transmission towers to SBA Communications Corporation.
About PG&E Corporation
PG&E Corporation (NYSE: PCG) is a holding company headquartered in San Francisco. It is the parent company of Pacific Gas and Electric Company, an energy company that serves 16 million Californians over a 70,000 square mile service area in northern and central California. For more information visit http://www.pgecorp.com. In this press release, they are collectively referred to as “PG&E”.
This press release contains forward-looking statements that are not historical facts, including statements about the beliefs, expectations, estimates, future plans and strategies of PG&E Corporation and Pacific Gas and Electric Company, including, but not limited to, the sale of the San Francisco corporate headquarters complex. These statements are based on current expectations and assumptions, which management believes to be reasonable, and on information currently available to management, but are necessarily subject to various risks and uncertainties. In addition to the risk that these assumptions may prove to be incorrect, factors that could cause actual results to differ materially from those contemplated by forward-looking statements include factors disclosed in the joint annual report of PG&E Corporation and Pacific Gas and Electric Company on Form 10- K for the fiscal year ended December 31, 2020, their latest quarterly report on Form 10-Q for the quarter ended March 31, 2021 and other reports filed with the SEC, available on the PG&E Corporation website at the address www.pgecorp.com and on the SEC website at www.sec.gov. PG&E Corporation and Pacific Gas and Electric Company do not undertake to publicly update or revise forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent required by law.
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