First Republic Bank was founded in 1985 with a small office and 10 employees in downtown San Francisco. The bank's headquarters are still located on Pine Street but the office space is now spread across three buildings, two blocks and nearly four decades.
First Republic's (NYSE: FRC), which announced its first-quarter earnings on Monday, is expected to have a major impact on the city.
Real estate sources claim that the company's space in San Francisco is 750,000 square feet.
First Republic, according to insiders, was planning to create a campus-like environment in San Francisco around Pine, Market, and Front streets. The bank is likely now evaluating which space it will place on the market.
The headquarters of the bank at 111 Pine St., in San Francisco's Financial District, is approximately 158,000 square foot. First Republic began leasing this location from Double Wood Investments Inc. in 1989, the local landlord who still owns this building. On Tuesday, the company was not available for immediate comment.
First Republic's largest lease in the city, according to sources, is located at 1 Front St. After expanding the space in 2019, First Republic occupies nearly 455,000 square foot. Paramount Group is the owner and I have reached out to them. I will update this article if I receive a response.
Honorway Investment Corp. also owns 388 Market St. and leases about 132,000 square foot of space.
Will it be attractive to subleasees? If they already have signage on the property, will they be able transfer their rights to sign? Tenants always wonder about the motives of the sublessor, and why the space is being subleased. "Is this a distressed situation?" Tony Zucker, executive Vice President at Dunhill Partners West. If the sublandlord defaults on the lease, the tenant would have to deal with the landlord. A landlord might be open to direct leasing with a tenant in a market such as today if they are concerned about the status and reputation of the sublessor. In this case, First Republic Bank.
First Republic's potential estate cuts will add to San Francisco’s already high office vacancy rates, which reached 30% in the first quarter and are expected to increase.
First Republic experienced a rush on deposits, as investors and depositors feared that it could be the next to fail after Silicon Valley Bank failed in March. The bank lost around $100 billion over a few days in March. This is excluding the $30 billion of deposits that were provided by 11 large banks as part of a rescue attempt.
First Republic's deposits were $104.5 billion at the end the first quarter of this year, compared to $176.4 billion at the same time last year. The bank attributed the slight drop in deposits this month, from April 21 to $102.7 billion to clients withdrawing cash to pay their taxes.