Land Use · Brokerage · Investment · Development · Project Management · Corporate Real Estate
PG&E Portfolio Asset Plan Consolidation—66% OPEX Reduction
San Ramon, CA
We were requested to provide a quick response portfolio analysis and expense reduction plan. With multiple Bay Area lease roll-overs, an opportunity was available to reduce occupancy expense and implement a new Workplace standard to support a collaborative culture and a flatter organizational management structure. Taking advantage of sub-market and regional lease cost differentials, we proposed and implemented a fast-track consolidation, closure of nearly 200,000 SF in three lease buildings, and relocation plan impacting more than 1,000 employees in three cities.
In “rapid response mode” we provided services to implement capital project planning, CAPEX plan funding documentation, new workplace standards and construction management. We concurrently managing multiple teams, for brokerage, site search, due diligence, lease negotiations, furniture procurement, IT systems, construction, building start-up, employee relocation and close out of three buildings.
Shedding nearly 200,000 SF and leasing a 137,000 SF new office spce, the workplace efficiency was improved from 330 SF/person to 225 SF/person for the affected sub-portfolio. In less than 8 months the new LEED tenant improvement interiors and workplace program created a significant increase in quantity and diversity of meeting space, conference spaces and casual “collective” work environments while reducing total space utilization by 20%. The project created a 66% reduction of occupancy expense (OPEX) and provided a capital investment pay-back in three years for these buildings. Additionally, this new lease initiative provided a land assemblage option for 38 acres and a potential alternative HQ for 4,000 - 5,000 employees.