These Companies Are Relocating Headquarters In Search Of Young, Qualified Talent
It used to be much simpler. Young professionals would graduate from college, research companies within their field and move to wherever the jobs were. That’s no longer the case, Resource Real Estate’s Marty Caverly said. Now companies are the ones researching and relocating.
Today’s young talent is much more concerned with a city’s lifestyle offerings than its job market. This shift in priorities has forced companies to follow the talent, investing millions in office development and expansion in the country’s leading and secondary markets — a trend that is growing in prevalence as the labor market tightens and young talent becomes more scarce.
“They’re more concerned about quality of life versus jobs,” said Caverly, manager of Resource Real Estate Innovative Office REIT. That is causing young professionals to migrate to markets like tech-dominated San Francisco and leading financial hub New York City, and to other growing 18- to 24-hour cities like Minneapolis, Seattle, Boston, Portland and Denver. These markets have catered to Millennials live/work/play preferences with high-end apartments, an endless supply of food and beverage offerings, and ample entertainment — all within walking distance of public transportation.
“Where you have a lot of young, creative, educated people moving and jobs following them, it will have a positive impact on all [real estate], including multifamily,” Resource Real Estate executive vice president Kevin Finkel said. “It all starts with jobs."
Check out several examples of companies that have, or are in the process of, relocating headquarters in search of young talent.
General Electric Co.
Last January, General Electric announced plans to relocate its headquarters from the suburbs of Connecticut to Boston, transitioning about 800 jobs to the city. This was big news considering several states were competing to lure the company, including New York, Georgia and Rhode Island; Boston offered nearly $145M in incentives to GE. Boston has experienced a building boom since the recession, particularly in its urban core, driven by Millennials' desire to be in more walkable, amenity-laden areas.
Marriott International Inc. revealed plans earlier this year for its new digs in Bethesda, Md.'s Downtown. The site is within a business complex at 7750 Wisconsin Ave. that will include a 22-story office tower for the world’s largest hotelier's 3,500-plus employees. The $600M project is being developed by Boston Properties and is expected to come online by 2022.
In a shift away from the sprawling suburbs, McDonald’s Corp. is moving its HQ to downtown Chicago by 2018. The move won’t be far as the leading fast-food chain has been based in the Chicago suburb of Oak Brook, Ill., since 1971. (And it's a homecoming. The behemoth was HQ'd in downtown Chicago before that.) The new facility will top 500k SF and is being built on the site of Oprah's old Harpo Studios.
In pursuit of young talent, HomeAdvisor announced plans to shift its HQ from Golden, Colo., to a hip neighborhood in Denver’s River North Arts District that is known for its foodie-approved restaurant offerings and co-working office environment. HomeAdvisor will take two stories and 58k SF in a new building scheduled to deliver in late 2017 or early 2018.
Fierce competition for tech workers and web developers is driving Expedia’s plans to spend $1.2B on a new headquarters in Seattle, relocating from its home in Bellevue, Wash. The online travel agency is betting on amenities like an indoor gym, food and beverage vendors, and ample outdoor space to appeal to young talent. The firm is looking to have the 40-acre former Amgen site up and running in 2019.
The Coca-Cola Co.
In 2013, Coca-Cola transferred 2,000 tech workers from its suburban office in Atlanta to a skyscraper in the city’s urban core. The office in Peachtree Center opened mid-2014 in what Coca-Cola officials called an “information technology center of excellence.”
The social media giant shifted HQs from Palo Alto, Calif., to tech-dominated San Francisco in 2012. It's now a neighbor of technology giants Zynga and Airbnb. Supposedly, Twitter, Bing and Google had also been up for the space at 572 7th St., but Pinterest beat them out.
Aetna has been in talks for several months about moving its headquarters to Boston from Hartford, a decision that has the city in an uproar. The insurer has been inquiring about a 400k SF space for its 6,100 employees, though some are skeptical the insurer can find that much available space in Boston, and relocation talks seem to have stalled when Aetna's merger with Humana was blocked. The company has been in Hartford since 1853.