
The PG&E campus in San Francisco will soon make way for a Hines megaproject
US developer Hines and South Korea’s National Pension Service have set a new bar for their longtime partnership by announcing a $2.5 billion commercial and residential megaproject in downtown San Francisco.
After completing the $800 million acquisition of the Pacific Gas & Electric Company campus in the South Financial District this week, Hines and the NPS on Tuesday released their transformation plans for the northern California power utility’s headquarters.
The details include the redevelopment of two existing office buildings and the construction of a residential tower that could reach 818 feet (249 metres) and 75 storeys high, according to an application submitted to the San Francisco Planning Department.
The revamp of the PG&E complex comes under the $1.5 billion build-to-core strategy announced by Hines and its Korean partner late last year, the Houston-based firm said in a release.
Next-Generation Offices
“The site of PG&E’s headquarters is undoubtedly one of the best locations along the entire West Coast and we believe these projects will be the epitome of the next generation of office buildings, designed to answer future tenant needs by addressing what their employees want,” said Paul Paradis, senior managing director at Hines. “We are excited to be on the front lines of cutting-edge innovation in the built environment.”

Paul Paradis, senior managing director at Hines
Situated about a 15-minute walk west from the Embarcadero waterfront of the San Francisco Bay, the PG&E campus spans 1.6 million square feet (148,645 square metres) and occupies a block surrounded by Market, Main, Mission and Beale streets in the city’s chief business district.
The project calls for the restoration of a 600,000 square foot office complex dating back to the early 1900s and the transformation and repositioning of a 1 million square foot, 34-storey office tower to face Mission instead of Beale, Hines said.
The planned residential tower, which would be among the four tallest buildings in San Francisco upon completion, envisions 761 dwelling units across 845,000 square feet, plus 5,000 square feet of retail space on the ground floor. An existing two-storey parking garage would be demolished to make way for the landmark structure.
California regulators last month approved the $800 million sale of the PG&E headquarters to the Hines-led venture, with the utility agreeing to return $400 million from the net gain on the sale to electricity customers over a five-year period to help moderate future rate growth. PG&E will begin moving into a new headquarters across the San Francisco Bay in the city of Oakland during the first half of 2022.
Globe-Spanning Partnership
Hines and the NPS, a $672 billion fund manager for one of the world’s biggest pension plans, invested in the PG&E project under a strategy encompassing residential, office, logistics and mixed-use opportunities worldwide.

The PG&E headquarters at 245 Market Street, San Francisco
“This venture targets a build-to-core strategy to create a portfolio of prime assets resilient to market uncertainties,” said Scott Kim, head of the real estate investment division at the NPS. “This project embodies NPS and Hines’ belief that long-term investments in proven locations, supported by innovation and new technology, will capture sustained demand and create outsized value.”
The partnership between Hines and the NPS stretches back more than a decade to when the US firm advised the Korean fund on its €570 million acquisition of the Sony Center in Berlin. Hines acted as the asset manager for that property after the acquisition, with the NPS having sold the eight-building complex at the Potsdamer Plotz to Oxford Properties and Madison International Realty for €1.1 billion (now $1.3 billion) in 2017.
In the same year that the NPS sold off its Berlin asset, the fund teamed up with Hines to invest $525 million to buy a piece of SL Green’s One Vanderbilt Avenue project in Manhattan. In that venture, the NPS purchased a 27.6 percent stake, while Hines acquired 1.4 percent.
In May 2020, the NPS joined with Hines again to take a 49.5 percent stake in SL Green’s One Madison Avenue project in New York. The partners committed to invest at least $492.2 million to acquire that slice of the 26-storey office development.
Privately held Hines was founded in 1957 and now has a presence in 255 cities in 27 countries, overseeing investment assets under management totalling $83.6 billion.
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