Insurance giant Travelers Cos. is moving out of big blocks of leased space in downtown Hartford, as it relocates and consolidates a thousand employees to its main campus in the heart of the city after completing renovations that began in 2017.
Travelers wouldn’t comment Monday on how much leased space was being emptied by the insurer. However, the property-casualty insurer is a major tenant in One Financial Plaza, the “Gold Building,” and State House Square, both on Main Street, and in One American Row, the “Boat Building.”
The property-casualty insurer said the consolidation was not touched off by COVID-19, but the completion of renovations on its main campus, which includes the historic Travelers Tower. However, it comes as a time when the pandemic has many employers taking a hard look at how much space they will need in a workplace where more employees are expected to be working at home permanently.
The Hartford Business Journal Monday reported that a total of 150,000 square feet — including 100,000 square feet at the Gold Building — was being vacated. Travelers Monday wouldn’t comment on that tally.
“We’re nearing the end of a multiyear plan to renovate our facilities to create an even more collaborative environment while making better use of our space,” Travelers spokesperson Kate S. Thermansen said, in a statement. “As part of that, we’re simply consolidating the small number of floors we lease into the owned buildings of our main campus.”
The campus has two main structures: the tower and the nearby plaza building.
Travelers, which has delayed a return to the office because of the spread of the aggressive delta variant, has said employees are being offered the option to work from home up to two days a week. The insurer also said its offices are likely to be reshaped to accommodate work areas that are shared by workers.
Thermansen stressed that Travelers isn’t moving any of its 6,000 employees in downtown Hartford out of the city.
Even when Travelers moves out of leased space, it is still responsible for paying the rent unless it can sublease the space. Subleasing, however, can push down asking rents when tenants move out of spaces before their leases are up. They can competitively undercut what a building owner is asking for similar space in the same building.
According to sources familiar with the local real estate market, Travelers now leases about 210,000 square feet at the Gold Building. Recently, the co-owners of the office tower signed two leases: one for 47,000 with Sun Life Financial and another for 17,800 insurance and benefits broker AssuredPartners.
“Travelers has substantial lease obligations at the Gold Building until 2025 and we are confident based on our current leasing activity that we will backfill the spaces as Travelers formally notifies us of any consolidations,” Jane Davey, director of acquisitions and asset management at Hartford-based LAZ Investments, said Monday. LAZ Investments and Shelbourne Global Solutions LLC of Brooklyn, N.Y. own the office tower.
At State House Square, general manager David Jakubowski said Travelers is moving out of 55,000 square feet where the lease runs out in mid-2025 and the insurer is seeking to sublease it. Another larger, 160,000 square feet space, which houses Travelers bond unit, will remain occupied. That lease expires in late 2024.
“Over the past couple of years, we have been moving some employees from State House Square into the owned buildings of our main campus,” Thermansen said. “Approximately 500 employees will remain in that building for now.”
In addition, sources said Travelers leases 60,000 square feet at the Boat Building.
The downsizing of office space in markets around the country, including Hartford, could make it a rough go emerging from the pandemic. But some commercial real estate brokers in Hartford said they are cautiously optimistic that recent leases — including Hartford HealthCare’s at 100 Pearl St. — will offset some of the space shed by Travelers.
“Most people that haven’t returned to their offices yet will eventually — at least on a hybrid work schedule — and that will ultimately bode well for the overall health of the downtown Hartford office market,” Larry Levere, director of office brokerage at Sentry Commercial in Hartford, said.
Contact Kenneth R. Gosselin at email@example.com.