One of the nation's largest insurance companies is adopting a shrunken real estate strategy, most recently with a move to offload more than half its space in a Philadelphia high-rise.
Bloomfield, Connecticut-based Cigna has leveraged a recent renewal period to downsize its space in Center City's Two Liberty Place tower to less than 165,250 square feet. The move dissolves nearly 141,000 square feet from the company's previous presence in the 37-story tower.
It's the latest shift the insurance behemoth has made among its offices across the United States as it continues to tweak its vast real estate portfolio in response to changes still rippling out from the pandemic that prompted nationwide shutdowns starting in 2020.
Cigna's cuts started with the downsizing of a 185,000-square-foot outpost in Visalia, California, that ultimately resulted in its permanent closure in 2022. It has since moved out of the 682,000-square-foot Bloomfield, Connecticut, building that previously served as its global headquarters, and has made other changes to its Connecticut headquarters over the past several years.
The company was formed in 1982 through the merger of Philadelphia's Insurance Company of North America and the Connecticut General Life Insurance Company.
Cigna has cut thousands of employees from its corporate workforce between 2023 and 2025, all part of a multipronged approach to reduce its real estate expenses in response to the shift toward a more remote or hybrid workforce.
Market is looking up
Even considering the downsizing, Cigna remains Two Liberty Place's largest tenant, by far.
The company initially moved into the Philadelphia tower after signing a more than 306,175-square-foot lease in 2019, a deal that amounted to about half of the roughly 951,500-square-foot skyscraper.
Yet that was signed shortly before the pandemic sent the national office market in a tailspin, leaving tenants scrambling to adapt to the impacts of flexible and hybrid work policies, arrested hiring plans and layoffs, among other shifts induced by the global health crisis.
That has especially been the case for tenants such as Cigna that locked into deals in the run-up to the 2020 outbreak.
Tenants collectively handed back upward of 65 million square feet in 2024, boosting the total to more than 180 million square feet of move-outs since the start of 2020, according to CoStar data. What's more, if and when they restart leasing plans, those deals often amount to less space than they initially occupied.
Yet the pace of large-scale moveouts and downsizes is slowing, a signal office stakeholders say is proof that the post-pandemic recovery has officially taken hold.
The national vacancy rate of about 14% has largely hit its peak, according to CoStar research. While U.S. office leasing has yet to fully recover to pre-pandemic levels, the 12 million square feet of deals signed in the third quarter is the most since 2019.
Even while it is making cuts to some outposts, Cigna is still investing in growing others.
Earlier this month, it signed a deal to take on more space at the Two Grand Central Tower in Manhattan. Cigna has also in recent months agreed to expand existing offices it has in Alabama, North Carolina, Tennessee, Florida and Colorado.