Centene Campus University Research Park

[JRCLT]

I think this: even with the CEO change I dont think they will be growing anymore in St Louis.  They cancelled their 2nd tower there.  Depending on who the new CEO is.  I thought they chose one but maybe not.
https://investors.centene.com/news-events/press-releases/detail/1009/centene-announces-leadership-succession-plan

Just build a new tower in Charlotte? AmIright? ; )

[Blue_Devil]

I reached out to my friend and source on this again, and rather than ignore me, he said he heard again that Centene is planning to relocate their HQ out of St. Louis. He gave me no concrete date, and did not say Charlotte this time around. Who knows at this point. 

Edited January 6, 2022 by Blue_Devil

[KJHburg]

Centene East Coast HQ is racing towards completion.  Views from greenway only today.   In a few weeks there will be only a few peaks with the leaves out.   There seems to be a half floor on top the 8th floor may a executive suite?   Notice the signing ready to hoist to the top of the building.   There is a fence now along the greenway side but also looks like there is a new greenway connector to the side of the property. 

[Hushpuppy321]

Beautiful Building!  Do we know if Centene has indicated that they will start construction on the 2nd Phase of their Campus?  I think it was 2.4 Million SF total in three (3) roughly 800K Buildings right?

[KJHburg]

Drive bys and walk bys from the greenway of the new Centene campus.  Looking good.  This is a great looking building and in a very natural setting. 

[RANYC]

Michael Neidorff, former CEO who was running the company in 2020 when it announced its decision to make its massive investment in a 2.4 million square foot Charlotte campus has died at age 79. Campus is supposed to open in Q3.  Sad news.  From his comments at various events, he seemed to be positioning himself as a major Charlotte booster.  In one set of comments, he said he and his wife were scoping out condos in Charlotte, and he appeared to hint that a Centene HQ relocation to Charlotte was a real possibility.  Sarah London has succeeded him and unclear if she has any ties to Charlotte or NC.  

[DonkeyKong]

I think it’s a still real possibility.  Their board would have had to vote on such an investment. Plus the QC is pretty great!

[CLT2014]

Anybody have internal knowledge on hiring targets at Centene by year to ramp up to the incentives amount and how recruiting is going in Charlotte? I see only ~350 people report working at Centene and indicating they are based in Charlotte on LinkedIn (rough proxy). They have 1,900 positions open at the company, most completely remote, but 210 in Charlotte.

[KJHburg]

Some drive bys today and this is looking great of the Centene Campus in University Research Park.   This campus has direct greenway access and is heavily wooded. 

[CLTNative]

Clay Co. has a nice rendering fly-through. I hadn’t seen this before, much better IRL I’m sure.

https://claycorp.com/project/centene-east-coast-headquarters

[KJHburg]

from St Louis Biz Journal the new CEO of Centene talking about office space.  Key word here is LEASED.  They will own this space 770K sq ft here in Charlotte pictured below today.  My thoughts are they are consolidating lots of their leased offices into a few larger campuses and offering a lot of people work from home options.  Implications for Charlotte good be good in the long run with more jobs based here but could mean this new building is it and they have a lot of land left they had planned future buildings on.    State Farm consolidated lots of smaller offices across the country into just 3 larger ones in Atlanta, Dallas, and Phoenix they said it made it easier on technology and security.    I can see Centene not renewing lots of leases and having those people work at home or have their jobs in their bigger offices.  They have acquired lot of companies over the years and probably gained through those mergers lots of office space.

____________________________________________________________________

anyway here is the whole article:

Centene Corp. (NYSE: CNC) anticipates a “significant downsizing” of its leased office space, CEO Sarah London said Tuesday as the company reported its first quarter results.

“We’ve made meaningful progress this quarter in evaluating our existing portfolio of real estate assets, given our commitment to increased work from home and flexible work models.

“We are in the process of determining the necessary square footage to support our employees moving forward and anticipate a significant downsizing of our current leased space,” added London, in her first earnings calls since becoming CEO of the Clayton-based managed care company.

Centene expects to reduce over half of its domestic leased real estate footprint, said Andrew Asher, Centene’s executive vice president and chief financial officer.

“Though there will be a one-time cost to this, which we will frame for you in (quarter two), the run rate benefit will be nice contributor to our Value Creation goals,” said Asher, saying more details will be released at an investor event in June. Asher referred to Centene’s Value Creation Plan, a profit strategy rolled out in 2021 that includes expense savings through “real estate optimization.”

In addition to its headquarters in Clayton, Centene’s East Coast headquarters is under construction in Charlotte, North Carolina and is one of the biggest office developments set to debut in the U.S. this year, the Charlotte Business Journal reported earlier this month.

Before the coronavirus pandemic, Centene completed construction of a 27-story office tower as part of a $770 million expansion of its Clayton headquarters. The second phase called for another office tower, but was put on hold in December 2020.

A spokesperson for Centene, the St. Louis region's largest public company, said in an email like many other large employers, "we continue to evaluate our workplace and facility requirements, including our Clayton headquarters, as we activate new hybrid working styles."

Centene said based on feedback from employees and with the goal of attracting and retaining top talent, the corporation recently announced an approach that includes full remote working options and flexible working arrangements for all employees.

In 2021, Centene acquired Phoenix-based Magellan Health Services and 150,000 of the 232,000-square feet Magellan occupied in Maryland Heights was being marketed last month for sublease, as major St. Louis employers looked to unload significant chunks of office space.

In its first quarter report on Tuesday, Centene said revenue totaled $37.2 billion, a 24% increase from a year earlier. Total net earnings were $849 million for the first quarter that ended March 31, compared with $699 million in the same period of 2021. The company's stock was down more than 2% Tuesday.

On March 22, Centene announced that London, then the company’s vice chairman, would become CEO, effective immediately. She succeeded Michael Neidorff, who had been on medical leave since February. Neidorff died on April 7 at the age of 79.

“We will miss him dearly, but I can assure you that Michael’s legacy lives on in the men and women of this company and our commitment to his vision has never been stronger,” London said at the start of the earnings call.

end of article

hard to see this massive building with all the trees now leafed out. 

 

 

[KJHburg]

News out of St Louis from Centene from the St Louis Biz Journal   

""Centene Corp. (NYSE: CNC) is reducing 65% of its leased office space nationwide as the company balances the benefits of “in-person engagement” of employees with increased productivity and satisfaction of working remotely, executives said Friday at an investor event.  Over the past five months, the Clayton-based health care giant has surveyed all of its businesses and examined each of the corporation’s 300 locations, said Andrew “Drew” Asher, Centene’s executive vice president and chief financial officer.""

Key word here is Leased they will own this space in Charlotte.  However I would say any expansion of this office physically in my opinion wont happen. They own land across the street.  I guess now I would just want them to get to their employment targets here with is about 3000 jobs. 

[midtownclt]

NCPA June 16, 2022

The New Mexico Attorney General announced a $13.7 million settlement with Centene Corp. The settlement was a result of the state attorney general’s investigation of Centene’s subsidiaries’ pharmacy benefits pricing and reporting provided to the New Mexico Medicaid program. The investigation had focused on concerns that Centene was layering fees and not passing on retail discounts to New Mexico’s Medicaid program.

[KJHburg]

drive bys today of new Centene campus and they are building the day care center now which is a separate building first 2 photos. 

Every major insurance company or financial company has lots of lawsuits brought against them. I could fill this board up with the Bank of America and Wells lawsuits. 

 

[KJHburg]

I guess we can shift the conversation over to here.  More details being added to the article in the Biz Journal which Ashley Fahey broke today.

""The $1 billion question: What happens with Centene’s real estate in Charlotte?
The company paid $19 million in 2020 to acquire, in two transactions, more than 130 acres in University City. That includes the parcel at 2405 Governor Hunt Road, where the first office building will soon deliver. A 51.2-acre parcel across Governor Hunt Road was purchased in quick succession in the summer of 2020, underscoring Neidorff’s earlier statements about eventually growing the campus’ real estate beyond initial projections.  Centene continues to own 134 acres in University City, CBJ confirmed by analyzing Mecklenburg County real estate records.

When asked whether the company would lease or sell its real estate — both the office building wrapping up construction and the undeveloped land it owns — Layton said Centene has begun conversations with the state of North Carolina and city and county leaders to find another company to occupy the building.  “We really want to find the right fit for all our governmental partners,” he said. “It's a first-class building, and we're proud of it. We want to make sure that it works for all parties.”  Nationally, Centene works with Cushman & Wakefield on its real estate portfolio and will work with that brokerage in marketing the lease or sale of the Charlotte campus, a company spokesperson said.  Layton said Centene will finish the office building, down to the landscaping, in the coming weeks. No additional phases have begun construction, he confirmed.""

Does sound like not one Centene employee will ever work there.

and then there is this and I got this on good authority a while back.  Centene leased space at Camp Northend but never occupied it but now it seems maybe they will finally as their only office in the area.

""Centene next year will open what Layton called a talent hub for team meetings, training and other events for area employees. The company's 37,129-square-foot lease at Camp North End near uptown will serve as the talent hub.""

I am sure the land separated from their main property will be put on the market immediately the 51.2 acres.

 

[KJHburg]

Example of what happened in Atlanta with State Farm earlier this year.

""State Farm is retaining 6,600 employees at its Dunwoody campus, after subleasing one of the buildings to Carvana.   That confirmation comes after Carvana ((NYSE: CVNA) announced this week it was putting 3,500 jobs in one of the towers overlooking the campus. State Farm says it did not “actively market” the building for sublease, but lower real estate costs translates to lower costs for customers, according to a company spokesperson. In 2019, State Farm also sublet 350,000 square feet to Carvana in Tempe, Arizona.  Last July, State Farm announced a permanent shift toward hybrid work nationwide. That move allowed for the company’s “flexible real estate strategy,” a spokesperson said.   State Farm’s 2.2 million-square-foot campus brought more urban, walkable development to suburban Dunwoody. The first building on the campus, now occupied by Carvana, connects directly to the Dunwoody MARTA station and indicates both companies’ commitment to public transit access. State Farm employees are currently using the other two buildings, which total about 1.1 million square feet.""

So their never occupied new building in Dunwoody was quickly snapped up and totally leased.  Lets hope for another situation like this one that will end up even better for Charlotte. 

[DJ8hep]

This project has been really impressive with the stunning and massive facility! It’s so unfortunate they decided to back out, especially since the building is nearly complete… I would be very curious to know what the fate of this project will now be…

[Take2]

I am completely crushed about this!! I understand people working from home though.  But living in SW Concord I was really looking forward to the influx of jobs and people relocating. 

   I actually thought this was some kind of joke at first because of the shock of what I was reading. 

   Maybe relocations are becoming a choice based not on company relocations, but a choice based on simply where one wants to live. Clearly companies are letting their employees wfh . But how will this affect how Charlotte promotes itself. Strange days we are in for sure.

[kayman]

Charlotte should be marketing itself as a destination for live/work/stay/play then people (and companies) will choose to be here.  This is a lesson for creating more livability and desirability in those wanting to be here

Edited August 21, 2022 by kayman

[JRCLT]

Charlotte should be marketing itself as destination for live/work/stay/play then people (and companies) will choose to be here.  This is a lesson for creating more livability and desirability in those wanting to be here

Yes, Charlotte needs to be a great place to live not just great economic incentives for a company.

[TheOneRJ]

Very odd for them to back out literally last minute and want to occupy zero square footage of their campus.

[southslider]

12 minutes ago, TheOneRJ said:

Very odd for them to back out literally last minute and want to occupy zero square footage of their campus.

Like running from the altar before your "I dos"

[gman430]

David Tepper must be involved.  

[KJHburg]

I guess the good about this is that Centene hired 700 people locally and is looking for 200 more and won't get a dollar of incentives for it.  If a new employer came to town and announced 700 jobs most on this board would be happy.  Local ED agencies need to work overtime marketing this building for a new owner or tenant.  I think some company could swoop in and if buying it get it for way below replacement costs too as Centene would want to get rid of it quickly. 

This decision has nothing to do with desirability of Charlotte as a destination for employees.  Insurance companies are very cost conscious to say the least (and I know I worked for one)  It is about work from home and a company allowing 90% of its employees to do so.  Other companies don't feel that way especially the most innovative tech companies like Google and Apple  which in the last 2 months greatly expanded their physical footprint in the Raleigh Durham area.  

So Charlotte has this wonderful probably single tenant building to market and 700 new jobs already in the community.  

[CLT2014]

4 hours ago, TheOneRJ said:

Very odd for them to back out literally last minute and want to occupy zero square footage of their campus.

Centene got a new CEO in late March... as soon as she took over the "Wow this campus is going to be amazing and we're going to have 6,000 people someday" type of messaging stopped. Within 30 days she made a clear statement that she planned to SIGNIFICANTLY cut back on Centene's office footprint nationwide.... then they canceled a building expansion in St. Louis shortly after.... yet people in Charlotte thought we were immune even though Sarah London is never quoted being excited about the Charlotte campus like the old CEO who was a major booster. The writing was so clearly on the wall.

It probably took a few months for the teams she had re-evaluating the campus to finish their report, deliver options for what to do with the campus, the CEO to secure board of directors approvals, the media communications plan to be announced, et.... She actually covered a lot in her first 5 months and the coincidence this announcement coincides with the close delivery of the campus probably has more to do with the timing of the new CEO coming to power versus the campus construction progress itself.