Wells Fargo takes huge lease inland
A regional headquarters of the home mortgage division of Wells Fargo & Co. is relocating in San Bernardino in what is believed to be the largest office lease ever in the Inland Empire, the developer announced Wednesday.
The deal, with an estimated value of about $80 million, underscores the attraction the region has for employers eager to take advantage of its expanding educated workforce and the resulting growth of the office market.
“The Inland Empire was traditionally known as an industrial market, but that’s not the case anymore,” said Paul Marshall, who heads Southern California operations for the building’s developer, Opus West Corp. “It’s become very well rounded.”
Although housing sales in the Inland Empire have hit a lull, the area’s growth pace is expected to lead Southern California in the decades ahead, said John Husing, a Redlands-based economist who studies the region. “The most recent group to start moving here en masse have been well-educated younger people who have in their minds a certain lifestyle that’s impossible in Orange, Los Angeles and San Diego counties because of home prices.”
For those people, $500,000 can buy what would be considered “executive” housing in coastal cities, Husing said, and they’ll work for less pay than they would get in coastal counties if they can avoid long commutes.
Since about 2000, Husing said, “Companies that traditionally stayed in coastal counties and served this huge economy from there are finding it in their interest to be here.”
Wells Fargo is moving about 1,600 employees into its new regional headquarters, a 285,000-square-foot building on the northeast corner of Tippecanoe Avenue and Hospitality Lane in San Bernardino. Wells Fargo will occupy about 90% of the building.
Office buildings in the cities of San Bernardino and Riverside have proven especially attractive to Fortune 500 companies, said real estate broker Ron Heim of Cushman & Wakefield.
“We are getting a lot more white-collar jobs and less blue-collar jobs,” Heim said.
The Inland Empire’s overall office vacancy is about 8.8%, down from 12.7% a year ago, according to Cushman & Wakefield research. Average monthly office rents are $2.04 a square foot, compared with $1.84 last year.
The market tightened even though almost 1 million square feet of new space was added in the last year. Heim said that office construction was starting to slow down a bit and that the number of new lease deals had declined slightly in recent months, but he expects the pace to pick up again next year.
Wells Fargo Home Mortgage came to the Inland Empire with acquisitions of two rivals there in the 1990s and decided to stay, said Cheryl Howard, senior vice president of corporate real estate. The move to the new building is consolidating the offices of those two former competitors.
Offices in coastal counties are “very expensive,” she said, and the new offices in San Bernardino will enable the company to retain and recruit “a very diverse and educated workforce.”
Opus West plans to erect another office building in Rancho Cucamonga, Marshall said. It also has one shopping center in Chino Hills under construction and another slated to get underway there in October.