The parent company of Fireman’s Fund Insurance Co. is closing its longtime campus in Marin County and moving to Petaluma, taking steps that would allow it to transfer more than 500 workers later this year.
A U.S. division of Allianz, the German insurance company that owns Fireman’s Fund, said Monday it has leased a building in a Petaluma business park with the capacity to house 550 workers. Allianz did not specify how many workers it intends to place in Petaluma as it integrates Fireman’s Fund into its U.S. insurance operations.
“The location suits the current needs of the combined Allianz subsidiaries and will provide considerable cost savings,” the company said Monday in a statement.
Allianz will move three business units in November into the 85,000-square-foot location on North McDowell Boulevard, spokesman Richard Manson said. The move comes as the German insurance giant looks to complete the integration of Fireman’s Fund that began last year and expand further into the U.S. market.
Fireman’s Fund is the fifth-largest private employer in Marin County, with 720 workers at its Novato campus in mid-2014, according to the North Bay Business Journal. Many of its employees live in Sonoma County and commute to its campus in Novato, which has served as the company’s home since 1982.
It becomes the latest Marin County company to move to Petaluma, a trend fueled by the city’s proximity to San Francisco 39 miles to the south and the relative affordability of both commercial office space and housing. Biosearch Technologies moved from Novato in 2013 and Labcon moved from San Rafael in 2003, said Ingrid Alverde, economic development manager for the city of Petaluma.
“We have definitely seen a lot of movement for sure,” Alverde said.
The average top-end office space in Marin County costs $2.53 per square foot, while in Sonoma County it is $1.99 per square foot, said Brian Foster, managing director of DTZ, who represented the building owner, Colony Capital, in the deal.
“It’s an easy decision when you look at the options,” Foster said.
Office space became plentiful in Petaluma following the financial crisis and downsizing by tech companies in Sonoma County’s Telecom Valley. Nearly a third of the office space in the city was vacant in 2011, Alverde said.
But empty offices are filling up again as the economy improves. Today, only 16 percent of the office space in Petaluma is vacant, half the number of just four years ago, Alverde said.
“Most of our growth is still coming from expansion rather than relocation,” Alverde said.
As a result, the city’s commercial tenants are becoming much more diversified. Technology still has a presence, such as Cyan Inc., which has 260 employees on North McDowell and is in the process of being bought by Ciena Corp. But it is complemented by Athleta, a women’s clothing maker, as well as food businesses such as Amy’s Kitchen and Clover Stornetta Farms. Industrial space is tight, with an 8 percent vacancy rate, and retail space is even more scarce, with a 4 percent vacancy rate.
“Petaluma is usually the first one to feel the heat of the recovery,” said Ben Stone, executive director of the Sonoma County Economic Development Board.
The tremendous real estate activity in San Francisco is having reverberations in the North Bay, Stone said. A technology boom is fueling demand for office space in areas such as South of Market. Meanwhile, millennials who work for Silicon Valley firms but prefer to live in the city in areas such as the Mission District are driving up demand for housing.