There is a new normal in the world of corporate relocations and a new swath of hot markets for headquarters, according to a report by site selection consultancy The Boyd Co.
As the pandemic has shifted employees' ideas of the ideal office and fewer people are being required to come in each day, corporations are seeing less need for a singular formal corporate headquarters and instead are moving to satellite offices in locations that are smaller and more suburban, Boyd said. Businesses targeting areas with lower tax rates and operating costs is nothing new, but the list of ideal markets and even the idea of what a headquarters needs to be have shifted.
“Historically off the table in most corporate restructuring programs, the headquarters office is in play like never before,” the report said.
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Below are seven cities Boyd highlighted as the next corporate relocation hot spots. The company made its selections based on the annual cost of doing business using the hypothetical construction of a new Class-A, 75K SF office that employs 200 administrative support workers and considering things like tax rates, lifestyle, travel and hospitality options, and positive demographic trends.
7. Cary, North Carolina
Total Annual Operating Costs: $18.1M
6. Kannapolis, North Carolina
Total Annual Operating Costs: $17.9M
Favorable corporate and personal tax structures are among the highest priorities for businesses. North Carolina’s property taxes are low, and it is in the process of phasing out its corporate income tax, which will move the state up businesses' radars.
Configo Health, a startup that provides analytical benchmarks for pediatric hospitals, announced a move to relocate its corporate headquarters to Asheville, North Carolina, earlier this year.
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5. St. Petersburg, Florida
Total Annual Operating Costs: $17.8M
Total Annual Operating Costs: $17.7M
Florida appeared four times in Boyd’s overall list of 15 cities, with the state’s absence of a personal income tax being marked as a noticeable incentive for employees considering relocation to the Sunshine State from a costlier metro.
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Total Annual Operating Costs: $17.2M
Mount Juliet ranked highly on this list in part due to its executive housing and commercial real estate opportunities. It also stood out for its favorable relative costs for travel expenses and construction. Labor is a particular draw, as its weighted annual earnings of just over $50K is one of the cheapest among the cities Boyd highlighted. The city is 17 miles east of Nashville, meaning it can benefit from its spillover and is close to its international airport.
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2. Minden, Nevada
Total Annual Operating Costs: $17.1M
Minden’s appeal is twofold: one, the lack of both a personal and a corporate income tax served as an enticement for potential transplants and corporations alike, though the state does levy a differential rate commerce tax based on business category. Businesses that exceed a gross revenue over $4M are required to pay.
However, the city’s proximity to the San Francisco Bay Area was a boon, in Boyd’s estimation, as companies are more likely to want to maintain relative proximity to the intellectual capital of the Bay Area. It also has relatively abundant available space, which makes construction much less of a headache over more crowded metros like the Inland Empire. Minden is also near Lake Tahoe, making it a lifestyle draw.
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1. Punta Gorda, Florida
Total Annual Operating Costs: $16.8M
Like Nevada and Tenneseee, Punta Gorda, Florida’s, appeal comes down to a combination of more favorable expense and construction costs, combined with overall fewer operating expenses and a more favorable cost of living for potential transplants. Boyd said the 2023 opening of a mixed-use resort by Sunseeker Resorts will fuel additional migration to Punta Gorda, which sits between Naples and Tampa with easy access to an international airport in Fort Myers.
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