PG&E's San Francisco Offices Seen Fetching More Than $1 Billion
(Bloomberg) -- California Governor Gavin Newsom said all options are on the table for addressing the crisis engulfing PG&E Corp. as it struggles to come up with funds to pay as much as $30 billion in liabilities from wildfires. That includes looking at selling one of its most-valuable assets: San Francisco office space.
Real estate professionals are guessing what the properties might fetch. The utility owns a 1.7 million-square-foot (158,000-square-meter) headquarters complex in the city, according to its latest annual report. The offices sit in the sought-after South of Market neighborhood, where tech giants like Facebook Inc., Alphabet Inc. and Microsoft Corp. have been expanding.
“There’s no space in San Francisco,” said Steve Barker, Bay Area branch manager for brokerage Savills Studley. “Any block of space like that would be hugely valuable.”
A sale could easily bring in $1,000 a square foot, Barker said. That would imply a value of more than $1 billion, assuming no major upgrades are necessary.
“PG&E regularly evaluates the way the company is structured -- strategically, operationally, and financially -- so that we are best positioned to operate efficiently and to provide safe service to our customers,” Andrea Menniti, a spokeswoman for the utility, said in an emailed statement.
Of course, an expected bankruptcy filing could complicate a potential deal for the properties. And the company may have to juggle other asset sales. San Francisco’s public utility is already looking at buying some of PG&E’s infrastructure.
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