Blue Shield is moving its headquarters and 1,200 workers to downtown Oakland, which will jump-start a long-stalled office tower. The nonprofit health plan said it is escaping rising rents in San Francisco, its current location, the East Bay Times reports.

The company will move into 601 City Center in Oakland mid-2019, leaving 50 Beale St. in San Francisco. The firm leased 200K SF in a building being developed by Shorenstein Realty Services for a JV of a Shorenstein investment fund and MetLife.

“We believe the move to Oakland will lower our administrative costs, allow us to invest in our people, services and products and better position us to scale our business as we grow to serve more members across the state,” Blue Shield president Paul Markovich said.

Markovich said more than two-thirds of the employees who work in the San Francisco office live in the East Bay. Blue Shield could save as much as $26M over the term of the new lease.

The 600K SF building is expected to begin construction this year, making it one of the first buildings in a several years to break ground in downtown Oakland. The project has been approved, but stalled in 2008, according to the San Francisco Business Times. With this lease, a third of the 24-story building will be leased, leaving floors two through 17 available.

Shorenstein senior vice president and regional leasing manager Tom McDonnell and Cushman & Wakefield executive director John Dolby and managing director Dane Hooks repped the landlord. JLL managing director and corporate real estate strategist Tom Maloney repped Blue Shield.

JLL is marketing Blue Shield’s current 139,557 SF San Francisco office for lease.

Also expected to break ground this year is 1100 Broadway, after the University of California’s Office of the President signed a lease.