The Latest Trends in Corporate Site Selection
by King White, on Nov 13, 2023 10:00:00 AM
In the ever-evolving business landscape, corporate site selection has emerged as a strategic imperative that can profoundly influence a company’s growth, operational efficiency and overall success. As markets shift, technologies advance and customer preferences evolve, staying attuned to the latest trends in site selection has become essential for companies seeking a competitive edge. In this blog, we explore some of the most impactful trends shaping corporate site selection decisions in today’s dynamic business environment.
1. Proximity to Talent Hubs
One of the foremost trends in corporate site selection revolves around talent acquisition. Companies are gravitating toward locations with skilled labor ranging from manufacturing to software engineering workers. Factors such as the development of workforce skills, availability of educational institutions, and technology clusters and innovation hubs can also influence a site selection decision depending on the project type.
2. Resilience and Risk Mitigation
The upheavals caused by global events such as the COVID-19 pandemic have underscored the importance of resilience in corporate operations. Site selection now involves assessing a region’s preparedness for crises, supply chain stability and the availability of essential resources.
3. Sustainable Practices
Sustainability has transcended from a buzzword to a core business principle. Corporations are selecting sites that align with their environmental and social responsibility goals. Green buildings, renewable energy sources, eco-friendly transportation options and political landscape have become pivotal considerations in site selection.
4. Impact of Work from Home
The rise of work-from-home (WFH) has introduced new dynamics to corporate site selection, especially for professional services projects such as corporate headquarters, software engineering and contact centers. Companies are reevaluating their office space needs, considering satellite offices in suburban or rural areas to accommodate a distributed workforce while maintaining collaboration opportunities. This post-COVID trend has disrupted the entire commercial real estate office market. However, there are strong indications of some shifting dynamics, and many employers are mandating workers to return to the office. Only time will tell what the long-term implications will be.
5. Data Infrastructure and Connectivity
In the digital age, access to robust data infrastructure and reliable connectivity is non-negotiable. Corporate site selection now involves evaluating a location’s digital ecosystem, including broadband availability, power load, 5G connectivity and data center infrastructure. For example, data center site selection projects take these demands to an entirely different level with massive demand for power and connectivity, especially with the emergence of AI technology, which is driving demand for data center capacity.
6. Global Supply Chain and E-Commerce Growth
The global supply chain was impacted significantly during the COVID pandemic, causing many companies to rethink their global supply chain and reliance on countries such as China. In addition, the surge in e-commerce has elevated the importance of strategically located distribution centers. Companies are selecting sites that facilitate efficient supply chain management, reducing delivery times and operational costs.
7. Tax and Economic Incentive Considerations
Economic development organizations are vying for corporate investments to help drive job creation and capital investment in their regions. Corporations are leveraging tax credits, tax abatements, cash grants, infrastructure grants, utility discounts and favorable regulations offered by various regions to enhance their competitiveness and reduce operational costs.
8. Real Estate Conditions
It is a tale of two real estate types: the supply and demand of office versus industrial real estate for site selection projects. For office-related site selection projects such as headquarters, software engineering and contact centers, there is ample supply of options available due to high vacancy and sublease availability. Conversely, the availability of quality industrial warehouses and manufacturing real estate is more challenging. There is currently a significant shortage of large land sites for manufacturing projects that have adequate infrastructure. Similarly, the availability of modern warehouse space has been low due to supply chain shifts and e-commerce sector growth.
9. Health and Wellness Focus
Employee well-being has taken center stage in corporate culture. Companies are selecting locations and buildings that promote employee health and wellness with considerations for access to recreational spaces, healthcare facilities and work-life balance. The “live, work and play” and “flight to quality” approach has become critical for office-related projects in the site selection process.
10. Community Engagement and Social Impact
Corporate social responsibility is a driving force in site selection. Businesses are aligning with locations that share their values and offer opportunities for community engagement and positive social impact. We have a few clients that specifically target depressed areas of the country to help bring jobs that significantly and positively impact the communities they choose to locate.
In conclusion, corporate site selection has evolved into a multidimensional strategy that encompasses talent, sustainability, technology, resilience and social responsibility. Each project is unique, and each client has different objectives. Navigating these trends requires a holistic approach that considers both the immediate needs and the long-term goals of the company. By embracing these trends and making informed decisions, corporations can position themselves for success in a rapidly changing business landscape. The art of site selection is no longer just about location; it’s about crafting a strategic foundation for a prosperous future.