The building will sell for “significantly north of $100 million,” said Greg Gerber, an executive vice president at New York-based brokerage Savills Studley, who is representing CNA.

CNA has owned the tower, known for its red exterior, since the building opened in 1972.

The insurer once occupied the entire building but has cut back to about 750,000 square feet in recent years while leasing out 13 floors to other tenants, Gerber said. The largest is the Chicago Housing Authority, with about 150,000 square feet.

As part of its deal with Buck, CNA will lease back its office space until it moves to Buck's new tower in summer 2018, Gerber said. Some of CNA's current space is for amenities, which won't be part of its rentable space in the new building.

The deal with Buck is for about 275,000 square feet, with rights to eventually add or subtract about 20 percent of that total space, Gerber said.

CNA also had advanced discussions on a similar deal with New York-based developer Tishman Speyer Properties, which has an office development site across the street from Buck's project on Franklin Street, Gerber said.

Buck's building will have about 820,000 square feet.

By moving into newer, more efficient space, CNA can accommodate all of its headquarters workers in significantly less space, saving the company more than $10 million a year in real estate costs, Gerber said. The company also sought modernized space closer to commuter trains to help in recruiting and retaining employees, he said.

“Then the discussion became, if we're going to relocate, what's going to happen with the red building?” Gerber said. “We got deep into negotiations and analysis with a couple of to-be-built buildings, and we settled on 151 N. Franklin.”

CNA has 2,000 headquarters employees and is looking to fill about 200 vacant positions, spokeswoman Sarah Pang said. The employee count is not expected to change in the new building, she said.

The company will have a new leader by the time it relocates to the John Ronan-designed tower. CNA announced in November that it has chosen a successor for CEO Thomas Motamed, who is set to retire at the end of 2016. Dino Rubusto, a longtime Chubb executive, will take the reins from Motamed after next year.

“The iconic building we call 'Big Red' has served us well since 1972, and it will always be an important part of our history and legacy,” Motamed said in a statement. “Much has changed in the way we work over the past 40 years, and CNA Center at 151 N. Franklin is designed specifically to meet our needs today and well into the future.”

Rolander said Buck is considering seeking new office tenants for CNA's space, or potentially converting many of the upper floors to residences with views of Millennium Park and Lake Michigan.

“We'll study it over the next couple of years,” Rolander said. “We may run a parallel strategy of pursuing office tenants while evaluating to see if a residential component is feasible.”

The CNA deal will kick off construction of the third new office tower of this development cycle, the first since the recession. Buck recently demolished a former Walgreens store on the site and hopes to begin building the tower in January, according to John Buck Principal Bill Rolander.

Along the Chicago River, Hines Interests' 52-story River Point and Riverside Investment & Development's 53-story tower at 150 N. Riverside Plaza have filled large portions of their space about a year ahead of their expected completions.

Downtown Chicago's overall office vacancy in the third quarter fell below 13 percent for the first time since 2008. Sales of downtown office buildings have exceeded $6 billion in 2015, an all-time high. The previous high was $5.3 billion in 2006.

With the CNA deal, Buck will have almost half the space at 151 N. Franklin pre-leased. Law firm Hinshaw & Culbertson has leased 100,000 square feet there.

Another law firm, Freeborn & Peters, signed a letter of intent with Buck before later deciding to remain at 311 S. Wacker Drive.