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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.

“It has accelerated and there is a desire to look outside (San Francisco),” Stone said.

Allianz will move into a 140,000-square-foot building that previously housed Tellabs, which purchased Petaluma telecom equipment developer Advanced Fibre Communications in 2004 and closed its Sonoma County operations in 2012.

The fate of Fireman’s Fund workers has been in flux since Allianz began restructuring the insurance company last fall. In September, Allianz announced it was combining the Novato company’s commercial property and casualty lines into Allianz Global Corporate & Specialty. In April, it sold the insurer’s personal lines, the last remaining part of the business, for $365 million to ACE Ltd.

The Petaluma location will house its global corporate and specialty business, which is assuming Fireman’s Fund commercial business, its domestic managed operations and services unit and its resolution management unit, which has consolidated Fireman’s Fund legacy policy business.

Fireman’s Fund was founded in San Francisco in 1863 by retired sea captain William Holdredge to insure homes and businesses during the Gold Rush boom. It survived the 1906 earthquake and insured Charles Lindbergh’s Spirit of St. Louis.

Allianz, one of the world’s largest insurance companies, bought Fireman’s Fund in 1991 for more than $3 billion.

In recent years, it has gone through a string of executives as Allianz tried to figure out its role in the U.S. property and casualty market. Bob McDonald, a former CEO of Allianz Life of North America, has blogged that the Fireman’s Fund purchase was hampered by employees who “were raised to be bureaucrats and excelled at practicing that art” and Allianz executives who felt powerless to change the culture.

You can reach Staff Writer Bill Swindell at 521-5223 or bill.swindell@pressdemocrat.com. On Twitter @BillSwindell.