Insurers Dive Into Grand Building Expansion Plans

Insurers Dive Into Grand Building Expansion Plans

Life insurance sales may be flat but major insurance companies are pressing ahead with ambitious real estate projects.

Companies that have recently announced multimillion-dollar expansions, renovations and change of addresses include Thrivent Financial, MassMutual, Guardian Life, Jackson National, MetLife, Nationwide and Transamerica.

An improving economy and higher interest rates, which deliver better earnings on fixed investments, may be playing a role as insurers feel more confident about their economic fortunes.

Insurers want the overall look and feel of their offices to represent their values, said Matthew Tinder, a spokesman for the American Institute of Architects. Advisors are likely to feel the positive trickle-down effect of the new construction wave.

Especially among the density and noise of an urban downtown, recognizable, state-of-the-art buildings provide a quiet place to meet with clients, reinforce the insurance company brand and leave prospects with a favorable impression of the institution with which advisors are affiliated.

“Even if advisors may not visit corporate headquarters often, when companies are strong and project a modern, professional image, it can only serve to bolster our industry, the advisor community, and clients,” said Kevin Mayeux, CEO of the National Association of Insurance and Financial Advisors in Falls Church, Va.

Innovative And Progressive
These days, those insurers’ values translate to interior floor plans, free-flowing spaces, efficient HVAC systems and access to top-flight technology.

Insurers want clients, advisors, support staff, college graduates and regulators to come away with the impression that the company is innovative and progressive, a company with which people want to do business.

A “halo” effect emanating from a landmark building – think the Transamerica Pyramid in San Francisco, the John Hancock Tower in Boston or the Willis Tower in Chicago – can only help advisors even if they don’t necessarily visit the home office regularly.

With nationwide insurers typically spread out over a half dozen or more locations, construction and renovation is always ongoing. That can make it hard to know whether insurers have entered an especially active real estate cycle.

Around the country, life insurers owned and occupied real estate values equivalent to $6.16 billion last year, compared to $6.14 billion in 2007, according to calculation supplied by the American Council of Life Insurers using NAIC data.

The value of owned-and-occupied life insurance real estate sank to an 18-year low of $5.58 billion in 2005, the data show.

Unveiling Plans
Among the latest developments was MassMutual’s recent unveiling of a 310,000-square-foot, 17-story tower at Fan Pier on Boston’s waterfront.

Roger Crandall, MassMutual chairman, president and CEO, called the project “a standout piece of architecture” that will help the Springfield, Mass.-based company tap into Boston’s young college-educated talent pool and innovative spirit.

The new Boston campus is part of MassMutual’s plan to expand and reinvest in Massachusetts over the next several years, the company said.

Ever conscious of cutting operating costs, the building is expected to earn LEED certification, the sought-after environmental and energy seal of approval, by making efficient use of sunlight and other elements and preventing excess water runoff.

Breaking Ground
In Minneapolis, Thrivent Financial broke ground on a 350,000-square-foot, eight-story, stone, metal and glass rectangle that will include a small park, coffee shop, chapel and art gallery open to the public, the company said.

Completion of the $130 million product is scheduled for mid-2020.

Client expectations and the industry has changed and Thrivent needs to change with it, said CEO Brad Hewitt.

Last summer, Northwestern Mutual’s employees began moving into their new 1.1 million-square-foot, 32-story tower.

The ground-floor commons area features a 40-foot-long gas fireplace, a coffee shop and a park. At the top, balconies outside the top floors offer sweeping views of Lake Michigan, downtown Milwaukee and beyond.

Bathed in light, the building is a showcase of open floor plans, state-of-the-art technology and long-term commitment to an old industrial downtown.

Perhaps most important, the building aims to be a magnet for young talent as insurers compete fiercely with investment banks and mutual funds for senior executives, mid-level actuaries and financial advisors at every level.

Repurposing Space, Changing Address
Much of the real estate activity hovers around renovation or leasing office space in a more modern building – sometimes both at once.

In April, New York-based Guardian Life moved 300 technology employees to a renovated mixed-use complex called Bell Works in Holmdel, N.J., at the former site of Bell Labs designed by mid-century modern master Eero Saarinen.

Employees relocated to 90,000 square feet of space in a complex with more than 2 million square feet. It sits along an esplanade lined with shops, cafes, restaurants, a fitness facility and a public library.

Guardian Life also announced it was moving its headquarters from 7 Hanover Square at the top of Lower Manhattan to 150,000 square feet of space in a high-rise at Hudson Yards, a cluster of gleaming office towers rising over railway tracks on Manhattan’s west side.

In Cedar Rapids, Iowa, Transamerica’s parent company AEGON will spend $40 million to renovate 480,000 square feet of space in two adjacent buildings, and connect them both.

Capital improvements to the company’s southwest Cedar Rapids campus will allow Transamerica to consolidate the 2,600 employees working in Cedar Rapids into one location.

That will make for a more agile company and foster collaboration, which is how the company expects to operate 10 years from now, according to Transamerica President and CEO Mark Mullin.

More:2Q Individual Life Insurance New Premium Grows At 2%

Source:insurancenewsnet

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