Wells Fargo’s step back from property lending has been well-documented. The bank announced last year that it would streamline its mortgage division — after overseeing multiple rounds of layoffs in the segment. This year, Wells said it would sell most of its commercial real-estate loan servicing to nonbank firm Trimont.

But the most striking cut may be the bank’s reported move to sell its San Francisco headquarters. The office at 420 Montgomery St. in the city may be put on the market as early as this month, The Wall Street Journal reported Tuesday, citing people familiar with the matter.

Some observers will likely highlight various data points as indicative of a trend de-emphasizing the West Coast. Charlie Scharf, when he took Wells’ CEO role in 2019, chose to be based in New York City. The bank has built up a presence in Charlotte, North Carolina, since it acquired Wachovia in 2008. And only about 10% of Wells’ workforce is based in California, the Journal noted.

As it turns out, though, the bank’s headquarters, if a sale happens, would only shift six blocks.

“Bringing more San Francisco employees together at our 333 Market St. location will create a more collaborative work environment through access to more modern workspaces, enhanced technology and amenities,” a Wells Fargo spokesperson told Bloomberg in an emailed statement. “Wells Fargo’s corporate headquarters remains in San Francisco, and we have no plans to move it out of the city.”

Wells Fargo hired Eastdil Secured, a real-estate investment bank it sold in 2019 — and in which it still holds a minority stake — as an adviser on the Montgomery Street transaction, The Wall Street Journal reported. Wells has begun informal talks with potential buyers, the publication noted, citing an anonymous source.

"As part of our multi-year effort to build a stronger, more efficient Wells Fargo, we continually assess our real estate portfolio … to ensure we are best meeting the needs of employees and customers, responding to consumer and economic trends, and managing our costs responsibly,” the bank said in a statement seen by the Journal and Reuters.

Valley National offloads $925M

Wells would hardly be alone in that.

New Jersey-based Valley National Bank announced Tuesday that it closed on the sale of $925 million in commercial real estate loans to Brookfield Asset Management.

Ira Robbins, Valley’s CEO, said the move helps “to accelerate progress toward our strategic balance sheet goals.” 

As early as March, Robbins had signaled a plan to pull back from CRE loans. 

Exposure to that segment was a driving factor in a surprise $252 million loss that New York Community Bank reported in January. The loss sent the bank’s share price into a tailspin that only stabilized when new investors agreed to give the bank a $1.05 billion cash infusion in exchange for some management changes.

Valley saw its own stock drop nearly 24% during NYCB’s five weeks in crisis, even though Robbins took care to draw a distinction between the multifamily dwellings and downtown high-rises largely seen as riskier lending than the suburban properties that have been Valley’s bread and butter.

“Throughout the year, we have patiently monitored loan sale opportunities in the context of our deep understanding of the intrinsic value of our assets, and the unique dynamics of the markets that we serve,” Robbins said Tuesday. “This deliberate approach resulted in only a modest transaction discount to par … which further reflects the strength and desirability of our diverse commercial real estate portfolio.”

Valley expects to take an “incremental, immaterial” loss in the fourth quarter, tied to the roughly 1% discount on the $102 million in loans that had not been moved to held for sale by Sept. 30, it said.

The acquisition “demonstrates [Brookfield’s] ability to step in as an alternative lender to provide creative, flexible capital solutions,” Bill Powell, the firm’s managing partner for credit, said Tuesday, adding that Brookfield is “thrilled” over what it sees as the first step in an expected “long-term partnership.”

Valley will retain customer-facing servicing responsibilities on the loans.

The New Jersey bank is just the latest bank this year to offload some of its CRE holdings to the market’s buyers: WaFd announced in May it would sell roughly 2,000 commercial multifamily real estate loans to Bank of America for about $2.9 billion. NYCB, meanwhile, sold its residential mortgage servicing business to nonbank firm Mr. Cooper for $1.4 billion.

JPMorgan doubles down on Orlando

Still, another bank Tuesday laid out plans to double down on its brick-and-mortar footprint in an area away from its headquarters. New York City-based JPMorgan Chase said it would launch a renovation to its 250,000-square-foot campus in the Orlando, Florida, area early next year. The bank aims to add 300 jobs, a 12% boost to Chase’s workforce in the region. Most of those hires will be in consumer banking and card services, but the bank also expects its Chase Travel business will see a bump, it said.

“We’re proud to invest in this growing region that plays such a strategic role in serving our customers and look forward to seeing our investments in Central Florida come to life,” Mike Ashworth, JPMorgan’s chief operations officer for consumer and community banking, said in a release Tuesday.

JPMorgan announced plans in February to add 13 branches in central Florida and the Space Coast, in a larger effort to open 500 new locations by 2027.