Chevron To Divest Bay Area Office Campus
USA – Chevron announced that it intends to dispose its 92-acre HQ campus in San Ramon as well as look for smaller office space in San Francisco and relocate some staff to Houston, reported GlobeSt.com on Wednesday evening (29 June, SGT).
The oil giant’s headquarters campus, known as Chevron Park, presently houses over 2,000 employees and contains 1.4 million sq ft of office space.
Chevron stated that it’s offering to shoulder the moving costs of staff who relocate to Houston, where it occupies Enron’s former headquarters, which presently accommodates 6,000 workers.
“The current real estate market provides the opportunity to right-size our office space to meet the requirements of our headquarters-based employee population,” said the oil giant.
Nonetheless, the company disclosed that its headquarters will remain in the San Francisco Bay Area “Chevron will remain headquartered in California, where the company has a 140-year history,” it noted.
Chevron started as the Pacific Coast Oil Company in the state in 1879. The company’s headquarters was located at Market Street, until the oil giant relocated to the San Ramon office campus in 2001.
Jones Lang LaSalle’s (JLL) Senior Managing Director Trent Barnby told the Wall Street Journal that the Chevron Park campus would be a prime candidate for redevelopment, but is unlikely to remain an office asset.
“It’s a redevelopment opportunity and it almost certainly won’t stay in its current form. In today’s world and (after) what’s happening with offices, that’s not going to be the highest and best use,” he explained.
Chevron’s latest move is viewed as another blow to the Bay Area’s weak office property market, with many office tenants there slashing their real estate footprints. For instance, the ancestry-tracking firm 23andMe recently disclosed that it’s moving its headquarters from a 155,000 sq ft office space in Sunnyvale to a 65,000 sq ft office in South San Francisco with a shorter tenure.
Furthermore, data from CBRE showed that office vacancy level in San Francisco reached 23.8 percent during the first quarter of the year, while office net absorption hit -1.1 million sq ft. Data from security provider Kastle also showed that physical occupancy is merely about 35 percent.