Insurance companies shape portfolios with better quality office
62% of insurance relocations since 2019 have been to higher quality space
- Elsa Wilson
Insurance occupiers continue to commit to better quality space as they enforce RTO policies. Since 2019, 62% of insurance tenants that have relocated have upgraded their office building class.
In an industry with a large presence across smaller markets, the trend is particularly prevalent in gateway cities. Since 2019, 76% of insurance relocations signed in Boston, Chicago, LA, NYC, San Francisco, Seattle, and Washington, DC have been moves to better quality buildings.
In tandem with an uptick in insurance return-to-office requirements, leasing activity within the industry has seen a recent surge in momentum. As of August 2023, trailing 12-month leasing volume sat at 17% below 2019 levels as commitment to the office increases.
Like other industries, many insurance tenants are electing to reduce their overall footprints but are signing longer-term leases for best-in-class space. Insurance relocations signed between 2019 – Q1 2020 averaged at 25k s.f. at an 82-month term. For relocations signed since Q2 2020, deals now average at 19k s.f. with an 86-month term.