Wells Fargo Moving Out of Long Time Headquarters In San Francisco

San Francisco-based bank Wells Fargo announced this week that they will be moving out of their headquarters for decades at 420 Montgomery Street in the financial district for offices elsewhere in the city, becoming the latest institution to leave their original offices in the city.

While things were expected to recover for San Francisco offices and vacancy rates this year, new studies and reports found that things have continued to grow worse. The vacancy rate of 35.9% at the end of 2023 had been expected to go down, but high priority moveouts shifted that figure. X leaving San Francisco entirely, as well as companies like Salesforce abandoning entire buildings made the vacancy rate actually go up. As of Q3 2024, the vacancy rate was at an all time high of 37.3%. Office prices themselves have also plummeted, going from $90 per square foot to $62 per square foot.

With so many losses, the city has been doing everything possible to keep offices and conferences in the city. They have had some successes as of late, including managing to keep the Dreamforce Conference in the city. They have also been successful in having cities looking to move out of the downtown or financial district areas to at least go to offices elsewhere in the city. Many tech companies have done this, and on Tuesday, the city breathed a sigh of relief when Wells Fargo announced that, despite their move out of 420 Montgomery Street, their headquarters would be moved to 333 Market Street in the city.

While Wells Fargo has shifted somewhat towards the East Coast in recent years with most executives located in New York City or Charlotte, they have continued to keep their headquarters in San Francisco, where it has been located dating back to 1852.

“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,” said Wells Fargo spokesperson Edith Robles on Tuesday. “The new location is a more modern building that can deliver a better experience for our employees and customers. Wells Fargo has been serving San Francisco customers since 1852 and the city remains important to the bank.”

This trend of companies not leaving and instead switching offices is expected to grow in the coming years as lease rates continue to go down.

“A lot of this is, surprise, about money,” explained building occupancy researcher Michelle Duggan to the Globe on Wednesday. “You have big companies leaving their longtime headquarters only to plop themselves not too far away. And a big part of that is due to costs. Lease prices are falling all over the city, so why renew at, say $85 a square foot when you can get the same for $55 a square foot not that far away? There is the cost of moving, but in the long run switching offices and locking in cheap lease rates is best for a lot of companies.

“This has been happening all over San Francisco. Building owners have been desperate for tenants. At first, many kept the original rates and just tried to hold out. But that vacancy rate kept growing. So they had to go to the new market price and, well, here we are. It’s just the reality for San Francisco right now and for many surrounding cities.”