One of the largest financial institutions in the country is the latest company to downsize its San Francisco office footprint in the wake of the COVID-19 pandemic.
Capital One Financial, which currently has 121,000-square-foot offices at 201 Third St., will be moving into about 40,000-square-feet at 100 California St., according to a statement by JLL. The brokerage represented Pembroke Real Estate, the landlord of the nearly 300,000-square-foot building in the city's Financial District.
The region saw its office vacancy rate grow from 6.9% in 2020 to 30.5% today, above San Francisco's greater market average of 22.5% and the national rate of 13.8%. The Financial District has been marred by tenants moving out of their offices in the wake of remote work trends that prompted users to reevaluate their office needs and, in some cases, leave the market all together.
The nation’s ninth largest bank occupies four floors at its current base; that office has been listed as available ahead of Capital One's lease expiration in September, according to marketing materials from JLL.
The smaller deal marks the latest retrenchment move for Capital One in and outside of San Francisco. The company leased 3.2 million square feet of corporate office space in 2023, according to reports, down 50% from 6.4 million square feet in 2017.
Other companies that have downsized in San Francisco include online review platform Yelp; the firm put its 161,000-square-foot lease at 140 New Montgomery up for sublease in 2021 as it announced a transition to a remote-first work model. In March, Glassdoor closed its remaining U.S. offices in San Francisco and Chicago, according to previous reporting by CoStar News.
Tenant Moves
In total, Capital One owned and leased 9.2 million square feet of office space in 2023, down about 30% from 12.8 million in 2018.
The company's recent lease, despite marking a nearly 70% drop in size for Capital One, serves a win for 100 California. Prior to the deal, the building was 58% vacant after Pembroke lost two tenants in 2023.
Tailoring company Holy Stitch vacated the building after just one year and relocated to Market Street, and longtime tenant 24-Hour Fitness closed its location on the ground floor.
Capital One is now the office's second largest tenant, trailing cloud computing company Twilio that takes about 75,654 square feet.
Pembroke paid $182.25 million for 100 California in 2014. The landlord is planning upgrades for the property that includes a new conference center, a fitness facility and a new restaurant.
This article was updated on June 7 to clarify that Capital One Financial will not be trading offices, it will be moving.