EXCLUSIVE: Liberty Mutual Shrinking Back Bay Footprint With Wayfair Poised To Swoop In
One of Boston’s oldest companies could make room for one of its fastest-growing.
Liberty Mutual plans to consolidate home office operations into buildings it already occupies at 30 St. James and 157/175 Berkeley St. in Back Bay beginning in Q4 and continuing through early 2020. The move involves the company leaving space it currently occupies at 10 St. James Ave. and 75 Arlington St.
The measure would add more than 300K SF to the Back Bay sublease market, but it is already drawing attention from one of the neighborhood’s biggest tenants. Wayfair is in advanced talks with Liberty Mutual to take most, if not all, of the space vacated at 10 St. James and 75 Arlington, according to multiple sources familiar with the matter.
Liberty Mutual expects the consolidation — part of a campaign the company calls Flex Space already in place at 16 other Liberty Mutual offices — to save the company roughly $30M annually by 2020. The move was announced in a memo sent to employees Tuesday by Melanie Foley, an executive vice president with the company.
The Boston-based insurance company sold the two buildings it plans to vacate in early 2017 to Toyko-based Mori Trust Co. for $673M. Liberty Mutual leased back its space there despite moving many employees into the nearby, $300M 157 Berkeley tower it completed in 2013.
Wayfair announced in November it was in the market for up to 1M SF of additional Boston office space on top of the more than 655K SF it has at its Copley Place headquarters. The planned growth comes after it already announced in June a deal for 395K SF at 500 Boylston St. and 222 Clarendon St.
Foley’s email indicates the consolidation is partially a result of remote work causing an increase in unused office space. The company's space on Berkeley Street and at 30 St. James will be redesigned and reorganized into "neighborhoods," with some office space being converted into conference rooms and shared spaces.
The move follows John Hancock Financial Services’ plan to leave its 465K SF Seaport headquarters at 601 Congress St. by the end of this year and consolidate operations at its 1.2M SF Back Bay campus.
Representatives with Liberty Mutual told Bisnow before this article published that the company does not comment on "market speculation or rumor." After publication a spokesperson issued a revised statement.
"Liberty Mutual regularly assesses our real estate portfolio against business needs," the spokesperson said. "Ongoing changes in our business and work environment, primarily the implementation of flexible workspace for our Boston employees, will result in the need for a smaller real estate footprint in Boston."
A Wayfair spokesperson told Bisnow the company had no comment.
UPDATE, AUG. 15, 3:50 P.M. ET: This story has been updated to include Liberty Mutual's latest statements.
