K
aiser Permanente is significantly downsizing its presence in Downtown Oakland. The health care giant has reduced its office headquarters by a third, and may shed more space at the Ordway Building, where it leases 366,800 square feet. Regulatory filings suggest Kaiser could trim its footprint to 153,000 square feet, a 58% reduction. This would come after exercising an early termination option on one lease in July, shrinking its hub to 236,700 square feet.

    CIM Group, the owner of the Ordway Building, notified its lender of the anticipated downsizing, which is expected to severely impact the building's cash flow. Kaiser has two remaining leases at the property: one for 153,000 square feet set to expire next year and another for 83,700 square feet scheduled to end in 2027. The company can terminate this lease with a breakup fee if it gives 15 months' notice.

    Kaiser's spokesperson downplayed the significance of the downsizing, stating that the Ordway building remains its national headquarters. However, the company has been scaling back its Oakland presence, including relocating 1,200 workers to offices in Pleasanton and selling two office properties last year. Rising crime in Oakland has also contributed to Kaiser's decision to bolster security measures for employees.