States and Cities you Should Consider Relocating your Office to Post COVID-19

Corporate real estate is predicted to be impacted dramatically as a result of COVID-19 and the shift to remote work. The question now is, will workers and businesses take advantage of the work from home programs in order to relocate? With 77% of HR executives expecting the trend of remote work to continue, even a year after COVID-19 substantially subsided, now is the time to consider the future of your office.

Additionally, 74% of CFO's have stated that their companies will reduce office space due to their workers adapting to working from home, which raises the question is there is a need for expensive city-based office space?

So, if you are considering relocating or downsizing your office due to these reasons, what are the best states or cities for business? Check out top U.S. Site Selection and Incentives professional at BDO, Tom Stringer's views on which locations throughout the U.S. are proving popular with businesses during this time. 

Texas 

Texas is ranked the number one location California companies decide to relocate to, with approximately 660 relocating from California over the past two years. Texas traditionally has attracted companies as it has one of the lowest tax burdens in the U.S. Texas also boasts a large state population meaning there is a greater talent pool of workers hailing from local universities for businesses to choose from. 

The effect of COVID-19 has made workers in large U.S. cities such a New York realize that a huge proportion of their wage is eaten up by rent, food, and income tax. Now that they can no longer experience city life, many are questioning if the downsides are worth it. The idea of living in states such as Texas which offer them more disposable income and space is becoming increasingly attractive. 

Additionally, in a pre-COVID-19 survey by West Monroe Partners, 80% of a group of 200 business leaders said they are considering moving to Texas in the next three years to take advantage of the strong talent and employee base. 

So, which cities in Texas are best for business? 

Austin

A large number of businesses and individuals are relocating to Austin to take advantage of the incentives that it offers. Austin offers various relocation incentive benefits for businesses such as up to 3% wage reimbursement per job and up to 50% property tax reimbursement. For example, electric car giant Tesla was lured to Austin due to the tax incentives it was offered in order to create an estimated 5,000 jobs for the local economy.

Additionally, Austin has been included in the 25 high-growth U.S. cities which are predicted to account for approximately 60 percent of net job growth by 2030. Austin and Phoenix standout due to their diverse economies and high concentrations of tech professionals which help boost job creation. 

Austin's prime location right in the middle of the "Texas Triangle" gives businesses and residents easy access to other major locations within the state. It is also a great place for businesses to relocate to due to its quality of life. It has consistently topped the various quality of life indexes and lists such as 'Best Place to Start a Business', 'Best Places to Live in the U.S.', 'America's Best Job Market', and 'Most Recession-Recovered Large City'.

Houston

Houston already has more Fortune 500 headquarters than any other U.S. city when New York City is not included. Houston offers incentive programs to help small businesses thrive such as 'Build Up Houston' which helps with business development, marketing, finance, HR, and other strategies. Houston is also a great place to live as the overall cost of living is below average amongst U.S. popular metro areas and paycheques stretch further. These benefits make it a perfect fit for growing businesses that want to create a great culture for their employees. 

Arizona - Phoenix

Arizona has a pro-business climate with limited regulations and no corporate franchise tax. This makes it a great option for businesses seeking to relocate their operations to other states in order to take advantage of tax incentives. Arizona also offers an Angel Investment Tax Credit for investing in qualified small businesses. Additionally, the state has recently attracted huge companies such as Microsoft who plan to create 3 world-class data campuses which will bring with it an influx of jobs. 

Phoenix is rapidly gaining popularity as a metro area for businesses within Arizona. According to Tom, the numbers haven't fully caught up yet but it is predicted that approximately 100 people relocate to Phoenix every day, and more than half of them are from California, particularly Northern California.

Phoenix is a very attractive area due to its high quality of life and lower business costs. It also is experiencing an emerging tech scene which is attracting top talent. With new development plans and transportation improvements, Phoenix is a great option for businesses considering relocating their office. Phoenix is also more affordable than other major cities, for example, the median home price is $273,000.

Nashville

Many remote workers and businesses are relocating from Chicago to Nashville, particularly within financial services. According to Tom, this is another area that relocation numbers have not caught up. 

Specific industries such as manufacturing technology, media, creative arts, film and TV production, and radio production have been steadily relocating to Nashville because of it's connections to the country music, which expanded further as an entertainment standpoint.

Nashville is a great destination particularly for businesses from the northeast as the state still experiences full seasons. There is also a no-tax jurisdiction which is a huge incentive to help businesses save money post-COVID-19. 

Idaho - Boise

Idaho's capital Boise is becoming a hot spot for entrepreneurs moving from San Francisco and Los Angeles. Employers are concerned about their worker's quality of life and mental health after months of remote work and as a result, are considering states and cities with a good culture as they reevaluate their office location. Boise is becoming increasingly attractive due to its rich music scene, close proximity to nature, and broadening access to talent, in particular computer science graduates. 

Georgia - Savannah

In a bid to boost its technology industry, Savannah is offering tech workers incentives to relocate to the city. The Savannah Technology Workforce Incentive, a COVID-19 era creation, offers $2,000 grants to cover moving expenses for remote tech workers who choose to relocate to Savannah this year. The workers are not required to work for employers in Georgia. 

Businesses should also consider relocating their offices to Savannah due to it's reasonably priced real estate market, and close proximity to the beach making it an attractive area to live post-COVID-19. 

Kansas - Topeka

Topeka, Kansas is worth consideration when businesses are choosing a new office location post-COVID-19 due to its low cost of living. To lure remote workers Topeka is running a 'Choose Topeka' program. If workers choose Topeka as their new home they can be awarded up to $15,000. Additionally, if they are recruited, their salary can be up to $85,000 which is double the city's median wage. Benefits can also be up to $15,000.

Connecticut - Newtown 

Since the pandemic, approximately 16,000 New Yorkers have already moved to Connecticut, along with 10 companies that account for a combined 75,000 square feet of commercial space. Connecticut's high standard of public schools and space in comparison to larger cities is attracting parents who are losing interest in raising their children in small flats within congested cities. 

Newtown is one area in Connecticut which is offering $10,000 in cash to new home buyers through its housing initiative, plus a "welcome package" worth $2,500.

Vermont

Vermont has been running a ‘New Worker Relocation Grant Program’ since January 2020 to lure W-2 workers to the state. Vermont may reimburse up to $7,500 to those who move to cover relocation costs, making this state a very attractive option for those considering relocating their office post-COVID-19.

North Carolina

North Carolina has been an extremely popular destination, especially with financial services. The university system in the state is highly looked upon which is a great incentive for businesses to access top talent and remote working parents concerned about their children’s future. The area has proved to be a popular relocation destination from New York as it is not as hot as Florida or as far away.

Orlando, Florida

Orlando, Florida has had an impressive performance over the last 10 years within financial services. The cost of living, great culture, lack of state income tax, and great university systems are all very strong incentives in Orlando along with the great weather in the summer which businesses should consider.

Oklahoma

Oklahoma is considered a very hip state which is heavily focusing on its university system to lure tech start-ups. The city of Tula in particular is worth considering when pondering locations to relocate your office to due to the ‘Tulsa Remote’ program. Tulsa Remote offers self-employed individuals who live outside Oklahoma $10,000 to relocate for one year. Their goal for 2020 is to recruit 250 remote workers.

We hope this list of states helped you with your decisions regarding office relocation…

Prior to and post COVID-19 states and key cities in the U.S have been offering both businesses and individuals incentives to relocate to their area. As discussed in our webinar, the mass exodus of residents and businesses from major U.S. cities such as New York has intensified the desire for relocation. We hope this list has helped you decide whether office relocation is for you and if so, which state best suits your business needs.

Disclaimer: PGC does not endorse any personal views or opinions of the author. All information here is for general informational purposes only and is not intended to be a substitute for professional and/or legal services.