Talent attraction and retention remains paramount in corporate location decisions as companies chase the best and brightest young talent to the center of our cities. Since 2014, headquarters operations moved from suburban markets to a central business district three times more often than downtown headquarters relocated to the suburbs. Is this the right approach to talent attraction, and are these companies achieving their objectives?
Cushman & Wakefield’s comprehensive CBD vs. Suburbs? The Millennial Effect whitepaper examines all the questions you have about corporate relocation and this talented generation. Here are just a few:
Is the trend of companies moving to urban cores over?
Cushman & Wakefield believes that the lure of central business districts for corporate offices will continue unabated in the near-term due to superior access to talent. Looking at the density of the most sought after, highly-educated Millennial cohort, we find that this group most prevalently resides within centrally-located urban areas. In the central business districts of the nation’s top 10 metro areas, the concentration of this group is more than double the US average, reinforcing the perception that top talent flocks to large cities and neighborhoods surrounding downtown.
Will the suburbs rise again? What’s the catch?
There are several indicators pointing to a revival of the suburbs as an attractive destination. As Millennials start families, their location preferences may align more with qualities abundant in the suburbs. Furthermore, among all Fortune 500 corporate HQ relocations since 2014, over 40% have been suburban to suburban location moves demonstrating the continued satisfaction with suburban labor pools and amenities. Additionally, suburban office developers are working to create elements of an urban, walkable environment of their own by rethinking the formula for suburban office parks, as “live, work, play” becomes a buzz phrase in real estate.
It is important to note that not all suburban locations are created equal. Those locations with the most success attracting large corporate users are still easily accessible via public transit creating an easier commute for those employees who still choose to reside downtown or embrace a car-less lifestyle.
How important is a real estate strategy for corporate location decisions?
A location strategy that stays true to organization goals while supporting flexibility in how people work, develop new ideas and share content is a best practice approach that all companies should emulate.
Michael McDermott is a Director in Cushman & Wakefield’s Strategic Consulting group. Mr. McDermott has 11 years’ experience in strategically aligning real estate with the operational needs of corporate owners and tenants. He is responsible for management of site selection, portfolio optimization and workplace analysis projects from the initial investigation through successful completion. His areas of expertise include headquarters location strategy, labor analytics, urban planning and portfolio rationalization using business intelligence software. He is also a regular speaker and contributor to Cushman & Wakefield’s thought leadership.
Erica Ruder is a Director in Cushman & Wakefield’s Strategic Consulting group. Erica has more than 10 years’ experience in corporate real estate in both strategy and investment related roles. Focused on the intersection of human capital, real estate and location, Erica develops data-driven recommendations to improve her clients’ real estate‐related operations. Specifically, Ms. Ruder’s area of expertise is centered on the relationship between human resource strategy and labor markets for the purpose of improving corporate real estate portfolios and building competitive advantages. Erica creates solutions for clients across a wide variety of asset types including headquarters and shared services facilities, and also provides recommendations for portfolio-wide strategies.