Move over New York: Naples a top city for corporate headquarters post-pandemic, study says

Move over New York and Chicago. Step aside San Francisco.

A new study names Naples as a top city for corporate headquarters post-pandemic.

The Boyd Co., a corporate site selection consultant based in Princeton, New Jersey, conducted the national study.

The results reflect the "new normal" of remote work and the growing "fiscal and quality of life challenges" in more traditional hubs for head offices, such as "The Big Apple."

Here's what we know:

More:Best places to live 2022: Naples, Fort Myers fall in U.S. News annual rankings

Earlier:In the Know: SWFL tops in U.S. for corporate relocations, rising home prices; and Old Navy's future

What factors did the study look at?

The study included an examination of annual operating expenses and a review of state tax structures.

The cost analysis is based on operating a new, top tier Class A, 75,000-square-foot corporate headquarters, with 200 administrative support workers, from top to bottom.

The estimated outlay in Naples: Roughly $19.2 million a year.

That compared to more than $21.1 million in Everett, Washington, the most expensive to operate in, and less than $17.8 million in East Brainerd, Tennessee, the cheapest – among the top cities named in the study.

Asked if the study is confined to city limits, John Boyd, principal of The Boyd Co., said it's not, with labor pools, support services and real estate options extending beyond those boundaries.

For Naples, that means "you should assume the wider Collier County."

The study factored in all major geographically-variable cost factors considered critical to the corporate site selection process, including labor, real estate, construction, utilities, taxes and travel.

Other Florida cities make the list

Naples is among a total of 30 cities identified as meeting the "new headquarters relocation drivers."

The top three in the country are: Minden, Nevada, in the western region, East Brainerd, Tennessee, in the central region, and Ponte Vedra, Florida, in the eastern region.

Eight of the top cities are in Florida. The others are:

• Aventura
• Boca Raton
• Lake Mary
• Palm Bay
• Sarasota
• Sunrise

Nationally, the main drivers behind the selection of new headquarters locations include tax advantages, which can be found in Florida, where there's not a state income tax and corporate taxes remain relatively low.

What other features drive companies to relocate?

Other relocation drivers post-pandemic include:

• Attractive lifestyle amenities
• Strong travel and hospitality support services for corporate and client meetings and events
• Positive in-migration demographics and business attraction trends
• Desirable housing for company executives

Many companies are looking to reduce the square footage of their main offices because they still have so many employees working remotely, and they're in a "cost containment mode," concerned about a potential recession.

The study states the days of one large, downtown corporate office are "fastdisappearing."

The report finds "Today, many companies are transitioning to a hub-and-spokemodel, with one downsized central head office hub and additional smallerspokes – or satellite offices for administrative support."

That's expected to continue benefiting smaller office markets, such as Naples, which are described by The Boyd Co. as "very much alive and well throughout most of the country."

In sum: "Many site-seeking companies are concluding that improving the bottom line on the costside of the ledger will be far easier than on the revenue side coming out of the pandemic in 2023."

That could just spell more trouble for big cities.

Columbia Business School finance professor Stijn Van Nieuwerburgh has warned of an “urban doom loop," with empty offices leaving gaping holes in municipal budgets and hurting property values.

The Boyd Co. provides independent location advice to U.S. and overseas companies. Its clients include JP Morgan Chase, Dell, HP, Boeing, Royal Caribbean Cruises, Shell and other Fortune 500 companies.