#6 – Inside Our Industry – Corporate Expansions Will Be In Suburbs, Mid-Sized Cities – Part 1Posted on
We were NOT surprised to see the following headline in a recent IndustryWeek post. After all, this is where we have been developing for 34 years!
Corporate Expansions Will Be in Suburbs, Mid-Sized Cities – Part 1
IW Staff – July 17, 2020
While 61% of projects are moving forward, the location choices at the top of the list include Boise, Colorado Springs and Columbia, S.C.
The impact of COVID-19 has extended into the decision-making process that determines where a company will locate.
Suburban areas and mid-size cities, followed by rural areas, will be the biggest winners of new corporate expansions and relocations, with large urban areas falling to the bottom of the list, according to a survey released on July 16 by the Site Selectors Guild.
“Everything from physical distancing to changing transit preferences has affected the way that corporations view location decisions,” said Rick Weddle, CEO of the Site Selectors Guild.
Conducted the week of June 29, 2020, in partnership with Development Counsellors International (DCI), the survey of Guild members aimed to uncover changes and new trends in corporate location strategy brought on by the COVID-19 crisis.
The top findings of this research follow:
Suburbs and Mid-Size Cities Will Be the Next Winners for Corporate Location Projects
The pandemic has brought suburban areas and mid-size cities into the forefront of consideration for future site selection projects and even put rural areas well ahead of large urban areas. When members were asked about locations that are “likely” or “very likely” to be considered by corporations looking to expand, relocate or open new facilities in the next 12 months, 64% chose suburban areas, 57% chose mid-size cities, 31% chose rural areas, and just 10% chose large urban areas.
Consultants indicated that New York would be hit especially hard among the nation’s largest cities. Of the consultants who agreed that large urban centers are “not at all” or “unlikely” to be considered for future projects, 100% said that New York City would be among the least likely locations to be considered for future projects in the next 12 months. Los Angeles and Chicago followed with 63% and 42%, respectively.
Consultants were also asked to name specific mid-size cities that would be strong potential candidates for new locations or expansion projects in the next year and named the following cities (presented in alphabetical order):
- Boise, ID
- Colorado Springs, CO
- Columbia, SC
- Columbus, OH
- Greenville, SC
- Huntsville, AL
- Indianapolis, IN
- Kansas City, MO
- Raleigh-Durham, NC
- Reno, NV
- Tucson, AZ
Consultants Report 61% of Site Selection Projects are Moving Forward
Consultants reported an uptick in projects moving forward in June compared to April, with 61% of Guild members reporting that companies are moving forward with site selection projects, a 16% increase since April. Of Guild members surveyed, 34% said that companies are pausing site selection projects, and 5% reported companies are consolidating facilities or canceling site selection projects.
There was also a general consensus that office projects will remain on hold until there is a clearer understanding on what the “office of the future” will look like and footprint requirements. Guild members also indicated that manufacturing will continue to be driven by the need to de-risk the global supply chain. There will be an accelerated rate of reshoring as well as more, smaller regional facilities to mitigate risk.
Next week we will share the rest of the report that looks at the top industry sectors that Guild members say will be the leaders in project expansion activity.