Citigroup, the third-largest U.S. bank by assets, is putting 90 branch buildings in California up for sale, with plans to lease them back.
The company is seeking more than $300 million for the properties, said a person with knowledge of the offering. The buildings, located mostly in the San Francisco Bay area, Los Angeles County and Orange County, will have net operating income of $15.9 million, said the person, who asked not to be identified because the offering is private.
Profit at Citigroup's North American consumer unit slid 14 percent in the first quarter to $1.1 billion, and Chief Executive Officer Michael Corbat has been seeking ways to cut costs. He announced plans in December to shutter 44 U.S. branches along with locations in Brazil, Hong Kong and South Korea, and has agreed to sell consumer-banking units in Turkey and Uruguay.
The planned sale "is intended to capitalize on the high demand for well-situated rental properties," Andrew Brent, a spokesman for Citigroup, said in an e-mailed statement. "It will have no impact on our employees or customers as we will continue to operate the branches after the sale."
The New York-based bank plans to sell the California properties either to one buyer or as nine sub-portfolios, according to a marketing brochure by Jones Lang LaSalle, the broker representing Citigroup. The properties have a total of 561,291 square feet (52,146 square meters) of space.
Guy Ponticiello, a managing director at Jones Lang's Capital Markets unit, declined to comment on the offering.