One of downtown Seattle's skyline fixtures will soon be the latest casualty of U.S. Bank's real estate downsizing efforts as the financial institution prepares to shed another slice of its vast office portfolio.
The commercial banking giant will be vacating four of its seven floors in the U.S. Bank Center tower at 1420 Fifth Ave., a representative for the institution confirmed to CoStar News. The move will shrink its longstanding footprint in the property from about 135,300 square feet down to just shy of 16,700 square feet. Blackstone affiliate Perform Properties, the landlord of the 44-story skyscraper, is working with a team of CBRE brokers to market the soon-to-be-vacated space.
"Like any company with significant office space, we are always looking for ways to focus our real estate to better serve employee, client and business needs," said Jeff Shelman, the bank's senior vice president and head of enterprise external communications. He added that the U.S. Bank branch on the ground floor of the tower will be unaffected by the office moves above it, and the firm's headcount won't be impacted by "the reduction of space."
The nearly 118,600-square-foot listing — which hit the market late last month — will be available for any prospective move-in at the start of 2026, according to marketing materials.
The Minneapolis-based U.S. Bancorp subsidiary has anchored the roughly 944,000-square-foot tower for more than three decades. It finalized a multifloor lease and naming rights deal in the early 1990s and, until now, has largely maintained its presence in the building throughout multiple ownership periods and a revolving door of tenants.
Yet, as with other companies adjusting their real estate footprints in response to evolving workforces, the pandemic's impact on how and where U.S. Bank employees work ultimately meant the institution didn't need as much space as it had prior to the global crisis.
Elsewhere in the Pacific Northwest, U.S. Bank last year opted against renewing its lease for five floors at its 1.1 million-square-foot U.S. Bancorp Tower in Portland, Oregon, known locally as "Big Pink." The financial institution occupies more than 222,250 square feet across several floors that it plans to vacate before the end of this year. The looming exit triggered global investment bank UBS' decision to list the property for sale.
The marquee office tower sold last month for $45 million, just a fraction of the nearly $373 million it was valued at when a UBS affiliate acquired its stake in the high-rise about half a decade ago.
Cutting ties
The bank's downsizing moves echo those made by other large office tenants across the United States that are shrinking their real estate footprints in response to changes still rippling out from the pandemic that prompted nationwide shutdowns half a decade ago.
Whether it is through renegotiated terms, sublease listings or letting leases expire, companies are economizing their real estate portfolios by signing smaller leases or getting rid of their space altogether.
Tenants collectively handed back upward of 65 million square feet last year, boosting the total to more than 180 million square feet of move-outs since the start of 2020, according to CoStar data. What's more, the leases being signed these days have shrunk considerably, averaging about 20% smaller than their pre-pandemic averages.
The shift toward a more prudent approach to real estate growth has loaded up the national real estate market with millions of square feet of available office space, driving up the average vacancy rate to a record high of more than 14%, according to the data.
Escalated return-to-office mandates among Fortune 500 heavyweights such as Amazon, Starbucks and Walmart have helped bolster optimism among landlords that the worst of the pandemic-induced woes have largely passed, clearing the runway for a widespread national office market recovery.
Yet U.S. Bank's ongoing real estate cuts show that companies are not yet done with evaluating their real estate holdings, especially as they relate to work models that have become permanently ingrained in their corporate culture.