The Conversation: The Shifting Landscape of Corporate Relocation in the Post-Pandemic Era
Introduction:
The aftermath of the COVID-19 pandemic has triggered significant changes in corporate strategies, particularly in the realm of relocations and site selections. In a recent episode of “America’s Commercial Real Estate Show,” host Michael Ball delves into this transformative landscape with John Boyd, Jr., Principal at the Boyd Company, who sheds light on the top U.S. cities for corporate relocations and the factors influencing these decisions.
Top U.S. Cities for Relocations:
John Boy begins by discussing a recently completed report on the top U.S. cities for relocations. The criteria for identifying these cities include superior tax climates, proximity to airports with hospitality infrastructure, low operating costs, talent in migration, and attractive lifestyle amenities. Notably, sub-markets in states without personal or corporate income taxes are gaining preference, with a focus on more manageable and cost-effective areas.
Manufacturing Shifts:
The conversation pivots to the manufacturing sector, exploring how COVID-19 has influenced companies’ decisions on where to establish manufacturing facilities. John Boy highlights the rise of near-shoring, with Mexico attracting projects that might have previously gone to China. He emphasizes that reassurance is crucial for manufacturers, particularly in high-growth industries like semiconductors and electric vehicles, which also receive substantial federal government support.
Role of Tax Incentives:
Addressing the contentious issue of tax incentives, John Boy acknowledges their significance in corporate site selection. While debated among lawmakers and the public, incentives are viewed as a necessary element for companies considering relocation due to the substantial costs involved. They signal a state’s commitment to supporting the success of a corporate project.
Winning States:
The discussion narrows down to states that have emerged as winners in the post-pandemic corporate relocation trend. States like Texas, Tennessee, Florida, Georgia, the Carolinas, Arizona, and Nevada are applauded for their pro-business climates. The conversation emphasizes the correlation between states without income taxes and population growth, citing Florida’s substantial influx of residents.
Factors Influencing Relocation:
John Boy stresses the importance of factors such as business-friendly policies, infrastructure investments, and a diverse housing portfolio in attracting relocations. The emphasis on corridors, like the sh-130 Corridor in Central Texas, demonstrates the critical role of operating costs and supportive policies in securing major projects.
Labor Availability and Importance:
Labor availability emerges as a critical consideration, especially in the face of the great resignation and labor shortages. The discussion emphasizes the need for maximizing labor assets and recruiting a workforce. The appeal of sub-markets lies in their proximity to hospitality and travel infrastructure, providing a conducive environment for both work and lifestyle.
Tech Companies and Remote Working:
The conversation expands to the preferences of tech companies, highlighting the shift toward decentralized head offices and the hub-and-spoke model. The remote working trend is expected to persist, offering cost savings and acting as a powerful recruiting tool. The implications of remote work on urban centers and the importance of wellness and health amenities in office spaces are also discussed.
Conclusion:
As the episode concludes, the audience is left with a deeper understanding of the intricate factors influencing corporate relocations in the post-pandemic era. The importance of a pro-business climate, tax incentives, labor availability, and a focus on employee well-being are underscored as companies navigate the dynamic landscape of corporate relocations and site selections.
A Miami Perspective:
At Hawkins Commercial Realty, we have had numbers of buyers and prospective tenants contact us seeking various types of commercial properties, with industrial and office properties seemingly the most common commercial property need for transplants, with retail location needs following closely behind. In our conversations, the move seems driven by – in order of frequency – weather (yeah, baby!), lack of a state income tax (and again!), and politics (not picking a side, just reporting). With COVID it is as if large numbers of people that decided to move to Miami or elsewhere in Florida realized, at more or less the same time, that they could go ahead and move now.