Relocating to More Favorable Markets
10 High-Impact Moves to Reduce Total Cost of Occupancy
To optimize labor availability, skillsets, affordability and incentives, explore emerging markets that could futureproof your workforce, provide resiliency against climate risk and give you greater access to green power.
Corporate Real Estate & Facilities (CRE&F) leaders, in conjunction with their lines of business, can explore lesser-known, up-and-coming markets to better support the growth of key technology and knowledge worker skills for less cost and with less competition. Relocations can have added benefits of access to green power to help achieve net-zero targets and resiliency against environmental factors (e.g., fires, floods, hurricanes).
Migration patterns brought on by the pandemic have opened up new, lower-cost locations that offer deep pools of talent in less-competitive environments. U.S. cities, such as Phoenix, Raleigh, Columbus and Kansas City, along with international markets, such as Ottawa, Buenos Aires and Barcelona, can provide significant labor costs savings and greater access to talent in less competitive labor environments.
How to Begin?
CBRE’s Labor Analytics Group recommends beginning with conversations across the enterprise and the various Lines of Business. Ask the following questions:
- How much specialized talent will be needed to drive future growth and lower expenses?
- Can the business quantify market longevity and scalability to determine where the tipping point exists before running out of labor?
- Can the corporate or Line-of-Business balance sheet absorb the short-term impact on severance exposure and lease buyouts to secure new space in primary/secondary markets to better align to growth and digital transformation?
Having the right workforce in the right locations can produce millions of dollars in long-term run rate savings, while improving performance and reducing enterprise risk.
Portfolio strategy, powered with labor analytics, can directly influence the acquisition and retention of key talent cohorts (e.g., tech talent) aligned with business imperatives that make an enterprise more resilient.
While CRE&F savings are generally focused on cost of occupancy, market selection can generate significant labor savings—prompted by CRE&F strategy. Examples of savings CBRE’s clients have achieved include:
- Fortune 500 health care organization: $350 million in labor cost savings (10 years) and 975 jobs created in Irving, TX.
- Public finance corporation: $52.3 million in labor cost savings (10 years) and 500 jobs created in Pittsburgh, PA.
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