Financial services firms are diversifying their portfolios to support long-term, sustained growth
- Sarah Bouzarouata
The pandemic accelerated a longstanding shift of organizations diversifying their portfolios to more affordable growth markets. Since 2016, employment in select growing financial services (FS) markets increased by 24.3%, while employment within traditional FS markets saw minimal growth, at 0.6%.
More recently, FS firms have looked to diversify their portfolios for reasons that transcend cost optimization, aligning their location strategy behind a clear vision linked to business objectives that factor in sustainability, DEI, and technology priorities. Since 2019, FS net employment growth was primarily driven by Dallas (+32K), Atlanta (+13K), and Charlotte (+13K). Dallas now houses the second highest number of FS jobs in the U.S.
Traditional financial centers have recovered 97% of pre-pandemic job levels, and still capture an outsized share of total FS employment at 22%. While sublease space is accelerating, the majority of space shed in the last nine months has been by fintech companies. Conversely, well-capitalized firms like KKR and Citadel remain bullish on gateway markets like NY, both expanding their office footprints recently.