Citigroup, which this year told employees they could work at home at least part time, plans to exit its 41-story namesake tower in downtown San Francisco for a new home half the size on the Embarcadero.
PGIM Real Estate listed Citigroup’s six floors at 1 Sansome Street as a direct listing available in January 2023, the San Francisco Business Times reported. People close to the company said it will relocate to 1 Market Street, where it will lease about 54,000 square feet. Citigroup’s lease on about 105,000 square feet in the tower expires next year.
The bank announced a flexible work policy earlier this year. Employees have the option to partly work from home, a move that sets it apart from similar companies that are requiring their employees to return to the office.
Many companies have been re-evaluating their needs, leading to an increase in subleases across San Francisco, and direct free space is also freeing up. Local commercial real estate brokers expect more established companies will decrease their real estate footprints due to the new workplace policies.
“There is going to be a tremendous amount of space hitting the market on a direct basis — a space dump,” Tony Zucker, executive vice president at Dunhill Partners West, told the Business Times. “Companies are realizing that people are just not coming back to the office.”
Office availability in San Francisco rose by 1.2 million square feet in the third quarter from the prior three months. The city’s office vacancy rate stands at 21.2 percent.
Yelp, along with Zynga, Eventbrite and others have reduced their office space after switching to hybrid work models. Salesforce announced flexible work policies earlier this year, although it recently said it’s encouraging employees to come back for in-person gatherings and events.
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