Seattle-based Pemco Insurance is “exploring” the sale of its Westlake headquarters and appears open to the possibility of leaving the city, where it was founded nearly 75 years ago.
The decision to list the five-floor, 90,000 square foot building at 1300 Dexter Ave. N., announced Thursday morning, in part reflects Pemco’s plans to let employees work remotely even after the pandemic, the company said.
“Simply put, we have more space than we need in today’s business environment,” Stan McNaughton, president and CEO of Pemco, or Public Employees Mutual Insurance Co., said in an emailed statement. The building, which had around 225 employees before the pandemic, is largely empty today.
Pemco is “financially stable,” and the sale decision is also driven by “its fiscal responsibility to act in the best interest of its owner-members,” McNaughton added.
As to where Pemco might move, however, the statement said only that “PEMCO has no plans to leave the Pacific Northwest where it’s been a proud community member since 1949.”
The company is “still evaluating what size and type of headquarters is needed for its hybrid work model and where it should be located,” the statement added.
Pemco didn’t make McNaughton available for questions. Asked whether the statement’s reference to the Pacific Northwest and not Seattle indicated Pemco might consider leaving Seattle, a company spokesperson declined to provide a definitive response.
“As other companies in the region and within the insurance industry have done, PEMCO views the potential sale of our Westlake properties as an important next step in implementing our hybrid model — freeing us to define new places and ways to work with customers, our communities, and each other,” spokesperson Derek Wing said by email Thursday afternoon.
“We remain committed to the Pacific Northwest and look forward to continuing to make a positive impact here,” he added.
The company also operates a regional office in Spokane out of leased office space, and is “also considering our options in Spokane,” Wing said.
Pemco has a total workforce of 536 and 2021 revenues of $481.5 million, Wing said.
Pemco paid $31.5 million in 2015 for the Dexter headquarters building and property, which were recently appraised for $43 million, county records show. The company said it is also selling three adjacent properties.
McNaughton said the sale was part of a strategic shift brought on in part by the pandemic.
“We’re leaning into the future, evolving as a company by focusing on ‘how’ we do business, not ‘where.’ For us, that means continuing to embrace cloud-based technology and supporting our hybrid work,” McNaughton said.
A Pemco departure from Seattle comes as the city feels increasing pressure from employers over issues such as taxes and crime, and growing competition from neighboring cities such as Bellevue.
“We don’t think of HQ1 being Seattle any longer,” Amazon CEO Andrew Jassy told last year’s GeekWire Summit. “We really think of it as Puget Sound. … We have a lot of people in Seattle, but we also have a lot of people in Bellevue and it is where most of our growth will end up being.”
Even if Pemco doesn’t leave Seattle, its embrace of a hybrid model adds fuel to concerns that Seattle’s offices may not refill even after the pandemic fades.
Office occupancy in downtown Seattle was just 40% as of May 22, according to cellphone location data from Placer.ai posted by the Downtown Seattle Association. That’s roughly a 7-point improvement over the prior three months, but it’s not clear how much higher office occupancy is likely to go, or how quickly.
Nationally, office occupancy appears stuck at around 43%, according to a weekly 10-city index from Kastle Systems, a security firm that tracks office occupancy by employees’ key card usage.
“The monthlong consistency suggests these occupancy rates may be the new normal for businesses nationwide,” Kastle noted this week, adding that “with COVID-19 cases spiking, we could see a shift in occupancy in the coming weeks.”
Pemco sells policies for auto, home, renters, condo, boat, pet and other insurance to residents of Washington and Oregon.