Snapshots

High-profile corporate relocation activity is slowing, but still favors Sun Belt

November 07, 2023

Contributors:

Jacob Rowden
Elena Lanning

Major corporate relocations have slowed in the past year in conjunction with a broader slowdown in large leases, but companies are still opting in most cases to relocate to lower-cost, smaller markets, with a strong bias for major Sun Belt secondary markets.

Based on SEC filings, the pace of public company relocations fell by more than 25% year-over-year through the first half of 2023, but activity is beginning to stabilize with relocations growing 3% in the past quarter.

Of 11 headquarters relocations announced in Q3, none had destinations in gateway markets, and seven companies departed gateway metro areas for secondary or tertiary markets. More than half of the relocations announced in Q3 were into Florida, Dallas-Fort Worth, or Charlotte.

While the Sun Belt remains the primary beneficiary of a wave of migration enabled by newfound employee flexibility during the pandemic, the pace of domestic migration is slowing as price discounts to gateway markets have narrowed and housing affordability is under pressure universally due to elevated mortgage rates. Large influxes of population over the past decade are also creating infrastructure challenges in some of the premier growth markets of the past cycle.

Redfin “migration” rates out of gateway markets had returned to within 10% of pre-pandemic levels in Q3, and migration into Sun Belt markets has returned to within 20% of pre-pandemic levels after more than doubling those rates at the height of the pandemic.

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