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Bank of America is consolidating at the office park it anchors along Southside Boulevard, making buildings, including Building 100, available for lease to other tenants. Aetna will move there.
Jax Daily Record Wednesday, May 25, 201612:00 PM EST

Aetna leaving Downtown, moving 800 jobs to the suburbs

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Aetna is leaving Jacksonville’s Southbank for the newly named Gramercy Woods office park in Southside, moving the large employer from a Downtown office tower to a suburban campus environment.

The insurer said Tuesday it would move 800 employees, starting in mid-2017, from the 22-story Aetna Building at 841 Prudential Drive. The move will be completed by August 2017 when its lease expires. Employees were notified Tuesday.

The company said in a news release that it chose the Gramercy site at 9000 Southside Blvd., long known as the Bank of America office park, with potential growth in mind.

Aetna did not expand Tuesday on that growth, but a report filed with the city in December said the company could add 150-300 jobs in Jacksonville.

“Aetna cherishes its close relationship with the city of Jacksonville,” said Mark LaBorde, Aetna senior vice president of enterprise sales, product and marketing, in news release.

“As we take steps to address our future needs, we’re very pleased that we’ll be staying in Jacksonville and continuing our commitment to the local community and its organizations,” he said.

Aetna provides health benefits to more than 1.5 million people in Florida. It offers traditional voluntary and consumer-directed health insurance products and related services.

Jacksonville is one of the company’s larger employment sites with a workforce in sales, service, network, medical management and other functions.

Aetna will leave 170,000 square feet Downtown for 132,000 square feet of space in Building 100 at Gramercy Woods.

The move did not take the city by surprise.

The Downtown Investment Authority has been working with the building’s owner since at least September to keep Aetna’s existing and potential new jobs Downtown.

Executive Director Aundra Wallace said in April the authority could offer a maximum Recapture Enhanced Value grant of about $2.4 million over 10-12 years to help the landlord offset the costs of improvements.

He said Aetna did not want incentives from the city, just the best deal from its landlord.

Wallace said Tuesday that it was good that Aetna was remaining in Jacksonville. He has known its space needs were based on competitive pricing and that a suburban move would better fit its business model.

“We made a good faith effort with the landlord to be as competitive as we possibly could,” he said. Wallace said the authority was limited to the types of incentives it could offer because of the operation’s salary ranges.

He said the competition for Aetna was between the Downtown building and two suburban sites and that the company was not considering leaving Jacksonville.

The Aetna building on the Southbank is owned by GV-IP Jacksonville Owner LLC, part of IP Capital Partners of Boca Raton.

When asked Monday about the potential for Aetna’s vacancy, IP Capital Partners founding partner and President Jason Isaacson said the company does not comment on tenants. He could not be reached Tuesday.

The move is a strategic fit for the Bank of America office park owner, Gramercy Property Trust Inc.

The New York-based company has been working through the regulatory process to rebrand the 10-building park as Gramercy Woods as lead tenant Bank of America consolidates space and makes room for more tenants.

It also has been seeking approvals to build a parking garage to accommodate the potential influx of employees.

“We want to create a new office environment that promotes employee well-being while supporting Aetna’s culture and business requirements,” Aetna’s LaBorde said in the release.

Gramercy Park’s amenities include the two-story Building 500, which has a cafĂ©, fitness center and training and conference centers. Gramercy Woods comprises 90 acres.

Gramercy Property Trust, a real estate investment trust, announced Tuesday evening that it signed four leases totaling 1.1 million square feet at the campus, which comprises 1.2 million square feet of office space.

The renaming as Gramercy Woods is part of the transaction.

“Gramercy is very excited to continue the transformation of this office campus,” said Benjamin Harris, president. He said the transactions diversify its rent roll and extend the average lease term at the campus.

Gramercy did not identify the tenants, but the largest is a new 15-year lease with a major financial institution for about 822,500 square feet, which matches Bank of America. That tenant also will occupy another 49,000 square feet on a seven-year lease, according to the release.

Among the other leases is a 10-year lease for 132,000 square feet with a large national life insurance company, which appears to be Aetna.

In December 2014, Colliers International Northeast Florida started to market the 10-story, almost 260,000-square-foot Building 100 and the five-floor, almost 122,300-square-foot Building 700.

At Colliers, the team of Chuck Diebel, Bob Selton, Preston Phillips and Lisa McLatchey represent the property.

Aetna was represented by Monty Harris and Robert Sevim of the Savills Studley real estate firm.

Aetna’s lease would take up half of Building 100 and likely will provide naming rights to the building.

The move doesn’t take the community by surprise, either. Aetna has been scouting for office space since at least June 2015.

The company said then its lease at the Southbank Aetna Building would expire in two years – August 2017 – and it was reviewing the market to determine if it would renew on-site or relocate.

Another factor that could impact its space needs is the proposed acquisition of Humana Inc. The deal is not expected to be completed until later this year as it moves through the regulatory process.

Aetna has been leasing space in the almost 495,000-square-foot tower along Prudential Drive since 1999, when it bought the Prudential HealthCare business from Prudential and consolidated operations there.

The tower was built in 1955 for Prudential Insurance Co. IP Capital Partners LLC bought it in December 2013.

When sold to IP Capital Partners, the Aetna Building was 98 percent leased to 13 tenants, including four major health care-related tenants that occupied more than 85 percent of the property.

In addition to Aetna, major tenants include Baptist Health System, One Call Care Management and UF Health. Baptist’s Downtown campus is adjacent to the Aetna Building and the system has been expanding into nearby office space.

Prudential, meanwhile, occupies a neighboring Southbank structure.

Baptist Health spokeswoman Cindy Hamilton said Tuesday the system leases 100,000 square feet at the Aetna building. She said there are no discussions at this time to lease more space.

The Aetna Building likely will be renamed after the move.

Isaacson said JLL, formerly known as Jones Lang LaSalle, represents the building.

It might not take long to add tenants, considering JLL’s first-quarter office-market report found that vacancy was at an all-time low in the Central Business District.

The 14.6 percent vacancy rate for office space Downtown compares with a 16.1 percent rate in the suburbs, according to JLL.

Wallace said he is comfortable the space will be filled in the Aetna Building within two years. He said Aetna’s lease does not expire until 2017, “so we have them for another complete year and the landlord is already working with other prospective tenants.”

“I certainly believe that space is going to be backfilled,” he said.

[email protected]

@MathisKb

(904) 356-2466

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