Progressive Insurance’s offering puts a tremendous amount of office space on the market, not just in Greater Cleveland but around the country, further straining it and developers’ creativity on what do with it all. This is Progressive’s Campus 1 in Mayfield Village (Hines). CLICK IMAGES TO ENLARGE THEM.
Millions of square feet of offices available — for what?
Although the global insurance provider cautioned that this day was coming, it doesn’t make its arrival any easier. Mayfield Village-based Progressive Insurance has announced that it will offer for sale millions of square feet of office space here in Greater Cleveland and around the country. This comes at a time when nearly every office-based employer is shedding office space in favor of remote work, too.
Progressive’s massive reduction of office space and its delivery to an already supply-saturated office market will strain the creativity of potential buyers and developers in deciding how best to repurpose it. Regardless of where the office property is, be it downtown or in the suburbs, an unhealthy portion of it is coming up for grabs.
Last July, NEOtrans broke the story that Progressive would be consolidating several of it properties here in Northeast Ohio. While a sale or lease was likely, Progressive opted to hold most of its properties in its portfolio for the time being. That changed, per an announcement made by Progressive this week.
“With our plans for consolidation proceeding as scheduled, we’ve recently made the decision to begin listing those properties for sale and/or lease,” a Progressive spokesman told NEOtrans in an e-mail. Those properties include:
- Campus 1 (6300 Wilson Mills Rd., Mayfield Village, OH)
- Colorado Springs campus (Colorado Springs, CO)
- Progressive Home campus (St. Petersburg, FL)
- Riverview campus (Riverview, FL)
- Progressive Fleet & Specialty (Carmel, IN)
Progressive Insurance’s Campus 1 on Wilson Mills Road at Interstate 271 was already a lonely place in November 2020. Even as the nation was just starting to come out of the worst of the COVID pandemic in Spring 2020, nearly all Progressive employees stayed home. Most have been there ever since (Google).
“As we continue to grow and reimagine our workforce, Progressive offers flexible work options for many of our employees with most people choosing to work from their homes. Our current office locations have always been a mixture of owned and leased spaces,” the Progressive spokesperson explained.
Two of those Progressive office locations were looked at by growing Park Place Technologies for their new headquarters before Progressive put them on the market. Reportedly, Park Place first looked at a building leased by Progressive on Landerbrook Drive in Mayfield Heights, next to its own leased headquarters, to expand into it. Instead, on April 5 Park Place bought Progressive’s newly vacated, 23-acre Alpha Campus, 747 Apha Dr., in Highland Heights.
“As we continue to look for ways to operate as efficiently as possible while providing the best for our employees and customers, our real estate team has completed a comprehensive market analysis and will begin marketing efforts for the sale and/or lease of some buildings involved in previously announced consolidations,” Progressive’s spokesperson said.
Progressive said it chose to make Campus 2, at 300 North Commons Blvd. in Mayfield, its corporate headquarters because it has the company’s major infrastructure, including its data center and solar array. The buildings are newer, built in 1998-2003, than the 1-million-square-foot Campus 1, built 1993-94, and have more up-to-date spaces and finish standards. The 70-acre Campus 2 also has more growth potential than the 32-acre Campus 1 if the company decides to increase its footprint in the future.
Progressive Insurance’s Campus 1 is a unique place. It features an art gallery with an extensive, renowned collection. The reason is because its construction was overseen by its former Chairman Peter Lewis, an art aficionado, who turned the high-risk auto insurance provider with 40 employees to a global, diversified company with 40,000 employees (Hines).
Last July, a notice was placed on Progressive intranet service called “The Highway” regarding its pending office reduction. A source provided NEOtrans with a copy of the notice which was confirmed as accurate by a Progressive spokesperson.
“Our average occupancy numbers since re-opening following the pandemic are at 8-10 percent in Campus 1, Campus 2, and our Alpha Campus combined,” the intranet notice said. “In real numbers, that means an average of 850 employees are filling 9,500 seats. Based on these numbers and to promote employee engagement, it just doesn’t make sense for us to maintain two campuses in close proximity. We will move people from Campus 1 to Campus 2 over the next 18 months or so.”
Yesterday, the spokesperson added “We’ll continue to review occupancy data and evaluate how office utilization impacts our real estate footprint and make the best decisions for our people and our business.”
Terry Coyne, vice chairman in the Cleveland office of commercial real estate services firm Newmark, noted that Progressive has their own real estate salespeople who will try to sell or lease their large, vacant inventory of office properties.
Progressive Insurance’s Campus 1 is big enough that it could become a mixed-use lifestyle center with live-work spaces, research facilities, retail and other hospitality services. Or it could become a massive data center for all the people around Greater Cleveland who are now working from home (KSU).
“That’s a lot of office space to put on the market at one time,” Coyne said last summer about Progressive. More recently, in response to news that Scott Fetzer Company, Hyland Software and American Greetings were all shedding large blocks of office space to the market in west-suburban Westlake, he said investors and developers may have to get creative in finding ways to repurpose these large office properties.
“I could see co-working being a possibility,” Coyne said. “And I could see full or partial demolitions and reuse as data centers, light industrial use or warehouses since some of these offices have high ceiling heights. I think the interesting thing you see is that many people think the suburbs are going to be saved from the office meltdown and this indicates that this is not the case. This is the indicative of the trend of work-from-home and it’s affecting every place.”
In another story broken by NEOtrans, Cleveland Clinic Foundation didn’t even try to sell its vacant, former TRW headquarters in east-suburban Beachwood. Despite being built in 1985 and maintained in good condition, the 476,030-square-foot office building and below-ground parking garage was demolished last year by the global health care system.
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