|Most Expensive Locations for|
|Location||Total Annual Operating Costs|
|New York, N.Y.||$30,692,937|
|San Francisco, Calif.||$29,270,119|
|San Jose, Calif.||$28,604,920|
|Los Angeles, Calif.||$27,641,789|
|Orange County, Calif.||$27,024,297|
|Least Expensive Locations for|
|Location||Total Annual Operating Costs|
|Sioux Falls, S.D.||$21,138,565|
|Little Rock, Ark.||$21,520,831|
|Virginia Beach, Va.||$21,785,735|
|Oklahoma City, Okla.||$21,792,588|
|Des Moines, Iowa||$22,650,130|
he southward migration of regional headquarters operations from Northern U.S. states will continue unless government officials in the Northeast and
"More regional headquarters projects are in play right now because of costs," says John Boyd, president of The Boyd Company Inc. in
Boyd recently conducted a comparative analysis of total annual operating costs in 50
The study found that
As it did with an earlier bioscience location study by Boyd's organization,
"In our regional headquarters site searches, we are prioritizing cost efficiencies and we tend to look for cities that can be described as 'regional centers of influence,'" Boyd says. "Within a well-defined regional or even smaller market, we look for centers of economic activity in terms of such factors as air travel, retail and wholesale trade, centers of academic concentration, regional banking centers, regional centers of excellence in health-care delivery, and centers of softer considerations such as recreation and culture."
The regional headquarters is a "destination site for advancing upwardly mobile employees from other company sites within or outside the region," Boyd says. "As a result, lifestyle considerations of the transferee and his or her dependents need to show well at the regional home-office city. This includes having a sound public school system and an affordable housing market in tune with the needs of lower and middle management and incoming technical personnel."
Sony Ericcson Selects
Air access to key markets and a business-friendly tax structure will always rank high on the list of site criteria for regional headquarters, notes Boyd. "In addition, our clients are increasingly viewing those states that do not impose a personal income tax as a valuable H.R. tool, putting them at a competitive national recruiting advantage."
All of these factors were pivotal in persuading Sony Ericcson to relocate its regional headquarters for North America from Raleigh-Durham to
Sony Ericcson announced in November that it is consolidating its North American hub in
Georgia Gov. Sonny Perdue welcomed the company with open arms. "Sony Ericcson's decision to select
The news continued a string of regional and corporate headquarters announcements for the metro
The fast-food company expanded its
Bryan Heller, vice president of TPA Realty Associates in Johns Creek, Ga., represented TPA in the Wendy's/Arby's headquarters deal. TPA is the management firm for AEW Capital Management, the owner of the building that houses the headquarters of the restaurant chain.
"Arby's had been in that building [at 1155 Perimeter Center West] since 2005, and CB Richard Ellis represented the company," Heller says. "They liked that building for many reasons: efficient floorplates, access to MARTA across the street, good signage and access to
The company leased 181,000 sq. ft. (16,815 sq. m.) through 2019 to accommodate a work force that could grow as high as 700 employees, notes Heller. "Overall, they really like
Access to Talent Plays Role
Bob Bertini, corporate spokesman for Wendy's/Arby's, tells Site Selection that the company selected
Bertini added that "
The company invested $3.5 million by adding 52,500 sq. ft. (4,877 sq. m.) to its total commitment when the headquarters decision was announced in late 2008, Bertini noted. "By next year, a total of 120 jobs will be relocated as part of this deal," he says.
Mary Douglass, the Georgia Department of Economic Development official who assisted Wendy's/Arby's, says that when it comes to searches for headquarters sites, "companies are primarily looking for talent. Generally, that is the number one driver for a corporate headquarters -- a diversified and educated pool of labor.
Boyd says that with cost containment becoming paramount, other cities are joining
"Smaller-market cities showing well for regional headquarters operations are those offering operating cost and tax advantages and other attractions, whether in commerce, logistics, finance, academia or lifestyle," says Boyd. "Some cities are positioned well to attract regional office investment from proximate cities deemed too expensive or having more difficult business climates."
Consolidation increasingly is the norm, rather than expansion, he notes. "A combination of factors such as sophisticated telecommunications techniques, improved air and ground transportation linkages to smaller-market cities, national media proliferation and more current cost concerns tied to a recessionary economy are behind the trend of our clients maintaining fewer regional headquarters sites than they did 20 or 30 years ago," he says. "Whereas firms used to maintain upwards of 10 or 15 regional offices, today the number is more like three or four."