Keep An Eye On These Hot Corporate Relocation Markets For Real Estate Opportunities

Location is everything in real estate, and nothing heats a real estate market like a major corporation relocating its headquarters or basing a big part of its operations in a new market. It almost invariably creates an influx of highly skilled and highly paid workers in the new market, which can result in rapid property appreciation. Benzinga looks at a few markets that may be primed for a corporate relocation boom.

It's no secret that many Americans have moved into the Sunbelt in the last several years, but a less-frequently studied aspect of big moves in America includes corporations and corporate headquarters. Corporations move for many of the same reasons that their workers do, such as the chance to find lower-priced property or a state and local government with a friendlier tax structure.

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To that end, commercial real estate firm CBRE reports that 465 American corporations moved their headquarters between 2018 and 2023. A CBRE survey shows that 110 of the moves were motivated by lower taxes and the ability to operate in a more business-friendly environment. However, the tech industry writ large had a different motivation.

Big Tech is scouring real estate markets for lower-priced talent instead of looking for lower-priced land. Tech worker salaries have always been at a high premium. Still, the cost of living in America's traditional tech hubs has become so high that paying competitive wages is eating up an ever-increasing share of Big Tech profits. That would explain why Tech companies represented 135 of the 465 corporate moves during the CBRE survey.

So, where are all the companies moving? CBRE's survey showed that Texas and Florida were the preferred destinations for Fortune 500 companies from 2018-2023. Moving to these states offers a very similar slate of cost benefits to both corporations and their workers. Texas and Florida have business-friendly corporate taxation rates and neither has a state income tax. The fact that land and housing are more affordable only sweetens the pie.

Some of the most popular cities in Texas for corporate relocations include:

Dallas-Fort Worth-CBRE's data showed 32 corporate headquarters moved to Dallas between 2018-2023, and SEC filing data reveals that Dallas-Fort Worth added 50% more corporate headquarters in that time. The U.S. Census also shows that Dallas-Fort Worth's population grew by 150,000 in 2023; the most in the country. Frontier Communications' new facility will add 3,000 jobs and nearly $4 billion to Texas' economy in the next decade.

Houston-This city has long been known as the "Petro-Metro" because the oil industry is the undisputed king of the local economy. Numerous gas and oil companies make their home in Houston and Chevron recently announced it would join them. Houston has added 25 corporate headquarters during the CBRE study period. Home prices are still below the national average, making it even more appealing for employees. 

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Florida's relocation picture revealed a bit of a surprise: 

When you think of corporate relocation to Florida, your first thought might be Miami or Orlando. Although they've seen growth, a surprising city is outpacing them: Jacksonville. The CBRE study shows that Jacksonville led the state in corporate relocations for fiscal year 2022-2023, with a net gain of nearly 70% in new corporate headquarters. Corporate credit firm Dun and Bradstreet recently moved to Jacksonville.

 Other popular cities for corporate relocation included Denver, Colorado, Nashville, Tennessee, Atlanta, Georgia, and Waltham, Massachusetts, a suburb of Boston. The most vacated cities on CBRE's list were San Francisco/San Jose, California, New York, Los Angeles, California, and Chicago, Illinois (in same order). One look at home prices and prime office or industrial space rental rates in most of those cities will make it easy to understand the motivation behind the moves.

Real estate investors can use this data to gain insight into where they might find long-term growth opportunities. Whenever corporations move, they bring tremendous demand for housing and new retail facilities. So, it doesn't matter which side of real estate you prefer investing in; there will be opportunities in multiple sectors. Consider these cities when scouting REITs, single-family home flips, or industrial property. The early bird gets the worm.

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