Wells Fargo is preparing to sell its longtime San Francisco headquarters, a move that will result in the banking giant's consolidation in a nearby building as it aims to streamline its real estate portfolio.
While San Francisco will remain its corporate hub, the company will soon list the downtown building at 420 Montgomery St. that has housed both its headquarters as well as the Wells Fargo Museum for the past several decades, a spokesperson confirmed to CoStar News. Eastdil Secured has been brought on to help market the roughly 409,000-square-foot property that has already attracted the attention of potential buyers.
The bank plans to relocate employees and its headquarters to 333 Market St., a nearby Financial District tower where Wells Fargo has occupied nearly all 33 floors, or roughly 630,000 square feet, for more than 15 years.
“Wells Fargo’s corporate headquarters remains in San Francisco, and we have no plans to move it out of the city,” Wells Fargo spokesperson Edith Robles said in an emailed statement. “This is a move to a more modern building that can deliver a better experience for our employees and customers. Bringing more San Francisco employees together at our 333 Market St. location will create a more collaborative work environment through access to more modern workspaces, enhanced technology and amenities."
The decision to sell is largely a reaction to the bank's continued shift to other financial hubs such as New York City or Charlotte, North Carolina, where many of its top executives are now based.
Company leadership, including CEO Charles Scharf, is based in New York. The firm earlier this year kicked off a massive conversion project to replace the former Neiman Marcus department store at 20 Hudson Yards with nearly half a million square feet of office space for the bank's operations.
Wells Fargo occupies about 25.3 million square feet of office space across North America, according to CoStar data, a footprint that also includes major hubs in cities such as Minneapolis, San Antonio, St. Louis and Raleigh, North Carolina.
Heart in San Francisco
Despite its growth elsewhere, California plays a critical role both for Wells Fargo's history as well as its future real estate plans.
The bank employs about 23,000 people, or roughly 10% of its total workforce, across the state. San Francisco, in particular, "remains important to the bank," Robles said, given that Wells Fargo was founded in the city during the Gold Rush in the mid-1800s.
Yet those sentimental ties haven't been immune from the financial heavyweight's efforts to streamline its real estate footprint and curb extraneous expenses.
“As part of our multiyear effort to build a stronger, more efficient Wells Fargo, we continually assess our real estate portfolio to ensure we are best meeting the needs of employees and customers, responding to consumer and economic trends, and managing our costs responsibly,” Robles said.
Wells Fargo has made a series of cuts to its vast real estate portfolio in recent years to accommodate changes to its workforce and office needs. Last year it sold the two-building office property at 550 California St. for over $40 million, significantly less than the $108 million it paid in 2005.
The recent changes Wells Fargo has made to its San Francisco real estate footprint expands a companywide downsizing the financial giant kicked off in early 2021 when it began hunting for a subtenant to take over more than 130,200 square feet of office space it had been leasing at 45 Fremont St. as well as almost 70,000 square feet it had occupied across the bay in Oakland.
All told, the company has said it plans to reduce its office real estate footprint by as much as 20% by the end of this year.