As published in The Hauppauge Reporter
By Richard Neuman
Vice President & Long Island Market Lead
Project and Development Services
Relocating businesses are focusing their efforts on people these days, rather than on the costs associated with moving headquarters facilities. While moving expenses are still very important, the affect a relocation may have on a company’s workforce has become the most important factor in real estate decisions. Employers are evaluating potential headquarters locations in terms of how the space might help recruit and retain talent.
A few key factors carry significant weight for firms considering a move, and the first of which is access to labor and/or talent. Proximity to skilled talent is the main consideration for most headquarters moves today, and that often means finding a new location in urban environments or gateway communities that has a young, highly educated, tech-savvy population.
In New York, for example, the generational shift in the workforce has helped inspired some corporate headquarter relocations out of the suburbs and into the city, where Millennial employees enjoy a work-live-play lifestyle. That might mean a higher-priced lease but the cost may be justified by the boost in productivity that can come with winning over top-quality talent.
Companies may also choose to relocate to remain close to, or get closer to, customers and industry influencers. Technology cannot replace the relationship-boosting benefits of mixing in the same circles as clients and industry insiders. A government contractor may find it makes good business sense for its executives and sales staff to be located in the Washington, D.C. metro region. In Nashville, Tenn., a bustling healthcare market creates a halo effect for related businesses, including the various technology companies and service providers needed to support this large industry. New York City has become an increasingly important market for tech companies, and is one of the largest tech hubs on the planet. According to the New York City Tech Map (nyctechmap.com), tech companies led by local entrepreneurs employ as many as 53,000 people, equal to nearly 1 percent of Manhattan’s workforce.
Cities with strong transit infrastructure are also attracting higher concentrations of corporate headquarters. Dallas and Atlanta, for example, are just two major cities seeing increased interest, thanks in part to their major international airports. As younger generations rely less on cars, corporate tenants increasingly prefer cities with strong public transit systems. New York City, for example, wins on both global and local infrastructure levels, with three major airports nearby, ample rail, and efficient public transit systems to help move the workforce in and out.
Once a relocation team has narrowed down its list of preferred markets, it is also likely to consider locations with walkable amenities that offer a sense of place and cohesive community within that larger setting, such as fitness centers, plentiful dining options and bars where employees can relax together after hours. A company might choose one neighborhood over another based on where employees would rather spend time outside the office, and reap rewards by limiting travel time employees spend by venturing away from campus.
The Regional Planning Association recently released its revitalization plan for the Hauppauge Industrial Park, now renamed the Hauppauge Innovation Park, which highlights the need to transform the outdated warehouse space at the park into modern facilities that meet the needs of the thriving ecommerce industry and Long Island’s workforce.
The revitalization plan includes strong focus on public spaces for gathering, interaction and creative programming. Some of the suggestions include identifying and redesigning green spaces at the park to allow for public events, as well as redesigning key corridors for pedestrian and bike accessibility and friendliness.
Big data and analytics are making it easier for corporate leaders to pinpoint the many pros and cons of any given location to ensure that a new company headquarters meets their specific requirements for both people and place. This is extremely important, given that real estate is typically the second largest expense on a company’s income statement. Relocations can have broad implications relative to employee recruitment, sales efforts and tax exposure, and it is critical to get these decisions right.