Blue Cross Downsizes Loop Lease With Move to Aon Center

Another major downtown Chicago office tenant is downsizing its office space, the latest consolidation of demand through a move within the Loop.

Health insurer Blue Cross Blue Shield inked a 95,000-square-foot lease at the Aon Center, Chicago’s fourth-tallest skyscraper, opened in 1973. The company will leave its longtime offices at 225 North Michigan Avenue, where it had been using 220,000 square feet, to move to Aon Center, next door to the Blue Cross Building at 300 East Randolph, which hosts the largest portion of the company’s downtown office space.

“The Blue Cross Blue Shield Association is the kind of tenant Aon Center has built its reputation on serving,” said Jamey Dix of the Telos Group, represented 601W in lease negotiations.

The 83-story property was purchased by 601W for $712 million in 2015, and put at least $6.5 million into renovations of a plaza open to the public that connects the property to Millenium Park. In 2017, a full-scale fitness center was added on the 70th floor as well as a new tenant lounge with a bar and cafe.

“The building, amenities, and surrounding neighborhood will help Blue Cross Blue Shield Association attract and maintain the strong workforce that they need,” Dix said.

Blue Cross’ decision to downsize adds to the all-time-high supply of office availability in Chicago’s central business district. Both direct vacancies and sublease offerings have set records this year in the area, as tenants with increasing numbers of remote workers have increasingly cut back on real estate as their lease terms approach expiration.

The reduction also follows Blue Cross’ Chicago-based parent Health Care Service Corp. cutting a quarter of its suburban office space with a move to more than 133,000 square feet at 3500 Lacey Road in Downers Grove.

Blue Cross’ move within the Loop is meant to make its workplace more collaborative, and give its workers a flexible environment. Its parent company has allowed hybrid work schedules to continue for many employees, and companies have found that they can reduce their footprints and maintain space for employees that want to commute to take advantage of building amenities several times per week.

“We are excited about a new space that represents our long-term investment in our employees’ workplace experience, with a particular focus on ‘we space’ versus ‘me space,’” Blue Cross’ Jennifer Vachon said in a statement.

Representatives of the 225 North Michigan property, which is a 25-story tower next to a 44-story twin at 205 North Michigan, did not immediately respond to requests for comment. Blue Cross Blue Shield renewed its lease there for 17 years in 2007 after a lengthy search in the East Loop ended with the decision to stay.

The Blue Cross Building is still home to Health Care Service’s downtown offices, though the parent company in 2019 added to its area footprint with a 65,000 square foot lease of its own in the Aon Center.