Companies Are Recalibrating Their Priorities
In recent years many companies have been propelled to recalibrate priorities for their location strategies and resulting real estate footprints. The top site selection factors for occupiers today include the following:
Q1 2023
ICT/broadband — ICT/broadband is now a major site selection factor, jumping from #26 in 2021 to #6 in 2022. This is presumably a reflection of hybrid working, which has seen a huge increase in popularity recently. According to CBRE, by some measures a majority of Americans have the option of hybrid work, and over 70 percent of employees plan to expand their hybrid working options over the next three years.
Energy costs — With energy costs ranked as #8, many businesses are seeking ways to offset ongoing operating expenses. Economic incentives are just one avenue companies can pursue to help alleviate these costs, especially during a period of rising inflation and changing market dynamics. In particular, many companies are poised to benefit from federal tax credits enacted as part of the 2022 Inflation Reduction Act (IRA), which allocated $369 billion for clean energy infrastructure to bring U.S. carbon emissions down 40 percent by 2030. Part of this transition will be facilitated with tax incentives to help investors reduce their utility costs in the coming years by investing in renewable energy infrastructure and improving energy storage.
Major federal bills recently signed into law are spurring robust and rapid movement in the private sector. Construction costs — As demonstrated in this survey, construction costs are now a stronger site selection consideration, jumping from #19 in 2021 to #10 this year. The current period of elevated inflation presents particular challenges for the construction sector. While margins can vary significantly across projects in different sectors and locations, CBRE expects rising construction spending this year to support higher margins as contractors try to recoup higher input costs absorbed in 2022. Taken together, we expect total construction cost escalation in 2023 to be slightly higher than the historical norm but well below that of 2022.
Project Announcements
Kikkoman Foods Plans Jefferson, Wisconsin, Operations
04/26/2024
BWX Technologies Expands Cambridge, Ontario, Nuclear Production Operations
04/26/2024
Greenheck Group Plans Knoxville, Tennessee, Operations
04/26/2024
Local Bounti Plans Pasco, Washington, Indoor Agricultural Operations
04/26/2024
Innovative Construction Group Plans Siler City, North Carolina, Production Operations
04/26/2024
Crystal Window and Door Systems Plans Mansfield, Texas, Headquarters-Production Operations
04/25/2024
Most Read
-
2023's Leading Metro Locations: Hotspots of Economic Growth
Q4 2023
-
2023 Top States for Doing Business Meet the Needs of Site Selectors
Q3 2023
-
38th Annual Corporate Survey: Are Unrealized Predictions of an Economic Slump Leading Small to Mid-Size Companies to Put Off Expansion Plans?
Q1 2024
-
Making Hybrid More Human in 2024
Q1 2024
-
Manufacturing Momentum Is Building
Q1 2024
-
20th Annual Consultants Survey: Clients Prioritize Access to Skilled Labor, Responsive State & Local Government
Q1 2024
-
Public-Private Partnerships Incentivize Industrial Development
Q1 2024