Lakeland named as one of the top locations for corporate offices in post-pandemic model

The Lakeland area is well positioned to attract corporate administration offices because of its low operating costs compared to other U.S. cities, a national report said.

"This is a very positive finding for Lakeland,” said John Boyd Jr., principal of The Boyd Company Inc., a location-consulting firm, which released the report Feb. 7.

In the report titled: “Lakeland Among Top U.S. Cities for the ‘New Normal’ Corporate Offices,” it names Lakeland as one of the top U.S. cities because it ranks second lowest for operating costs among 40 other top suburban office markets across the country.

The report shows total annual operating costs ranging from a high of $19.5 million in Palo Alto, California, to a low of $14.2 million in Wilmington, North Carolina, for a hypothetical 150-worker office.

Operating costs in Lakeland come in at $14.5 million, which is among the lowest on the East Coast in the national survey. Cities with the least operating costs include Franklin, Tennessee, in the central U.S. region; Minden, Nevada, in the western region and Wilmington, North Carolina, in the eastern region.

“The study reflects 'new normal' remote working trends, the growing popularity of suburban office markets, state income tax structures, operating costs and the growing quality-of-life challenges in major urban hubs of corporate office concentration like New York, Philadelphia, Chicago, San Francisco and others,” a Boyd Company news release said.

The report features a detailed comparative operating-cost analysis detailing all major geographically variable costs important to corporate office site selection, including labor, real estate, construction, utilities, taxes and travel.

Boyd called the new paradigm for site selection across the county the “hub and spoke” model. In the post-pandemic era, companies have favored decentralized and smaller buildings where they can tap into local talent pools like the Lakeland region.

'We are very competitive'

The Lakeland Economic Development Council agrees with the assessment contained in the Boyd report based on the metrics used by its authors.

“Where they talk about corporations with the hub and spoke – that resonates, as Lakeland has a history of being a location for central administrative or satellite offices such Auto Owners, GEICO, Lockheed Martin, Marriott Vacation Club, Metrc, etc.," said Katie Worthington Decker, senior vice president at LEDC. "Not to mention Publix’s recent commitment to the Downtown Lakeland Technology Campus to expand their corporate presence here.

“This doesn’t feel as new a trend for us, but with the ‘new normal,’ as the article references, it could create more opportunities for us,” she said. “We feel we are very competitive in all the metrics outlined with the other cities, especially those on the East Coast.”

The report also cited data from Phoenix-based U-Haul. The data is a useful tool to measure nationwide migration trends because of its expansive dealer network of 23,000 locations throughout the 50 states and 10 Canadian provinces.

Texas is the No. 1 growth state for the sixth time in eight years and has ranked no lower than second on the U-Haul Growth Index throughout that stretch. Florida shows that it is highly appealing to new residents, netting almost as many one-way U-Haul customers as Texas in 2023.

The Sunshine State has been a top-four growth state for nine years in a row as of the latest 2023 survey. Florida topped the U-Haul Growth Index in 2019. After Texas, Florida ranks second, North Carolina third, South Carolina fourth and Tennessee fifth in the U-Haul survey.

“While U-Haul migration trends do not necessarily correlate directly to population or economic growth, the U-Haul Growth Index is another useful gauge of how well states and cities are attracting residents and expanding their labor pools for current and future employers,” the Boyd report said.

Worthington Decker said the U-Haul study mentioned in the report gives Lakeland a top 20 ranking and she offered rankings on further studies and surveys to support the glowing picture of the Lakeland satellite corporate office market, including:

• No. 36 Best Performing City, The Milken Institute.

• No. 2 Fastest Growing Metropolitan Area, SiteSeer.

• No. 4 Fast Growing City, US News.

• 57th Lowest Cost of Living (up from 28th  lowest), Niche

• No. 20 U.S. City with the Most Cutting-Edge Tech Workers.

• No. 3 Top Boomtown in America, Lending Tree.

• No. 9 in Talent Attraction, Lightcast.

Quality of life

While there are many positive business factors the Boyd report used to make its case for Lakeland, “quality of life is equally important,” she said.

“The private sector’s significant investment in Bonnet Springs, arts and culture, third spaces (restaurants, bars, attractions) has been an integral part of our attractiveness as is the city’s decades of investment in parks, trails, recreational facilities and other infrastructure projects,” Worthington Decker said.

Among the deeper dive into office trends, the Boyd report also cites the business climate driving its findings.

'Additional eyes': LDDA is installing 14 security cameras through Downtown Lakeland

As companies reduce the square footage of their office space, exchange private desks for collaboration areas and add amenities aimed at encouraging workers to come back to the office after pandemic remote work at homes, offices are looking different and locations for corporate offices are changing, the Boyd report said.

This re-working of physical office space coincides with attempts to contain costs, especially because financing costs for facilities are inflated, taxes are rising and economists are still predicting a recession among other challenges for the economy this year.

Most companies kept the best of the pandemic-related changes to the working environment as workers returned to the office or as they work in a hybrid mode, the report said. This has had an impact on where companies want to locate their offices.

“The facilities network of one large, multi-function downtown corporate headquarters office is becoming more of a rarity,” the Boyd report said. “Today, many companies are transitioning to a hub-and-spoke model with one downsized headquarters facility and additional smaller spokes — or satellite central administrative offices where functions like finance, accounting, I.T. HR, legal, sales, training and other support operations are carried out on a regional or national basis.

“With these central administrative offices performing more of the functions historically carried out at the corporate headquarters site, companies are also focusing their site selection planning on attractive, smaller market suburban locations offering lower operating costs, improved tax climates and high-growth in-migration trends aimed at enhancing recruiting opportunities both in the near term and with an eye towards longer range staffing needs.”

Also, as more companies mandate three days or a full return for five days to the office, the suburban office locations help to encourage compliance by offering workers more convenient commutes, the report said.

“While Millennial and Generation Z recruits are not necessarily interested in gated communities and golf courses, they do like open spaces, jogging trails, parks, along with more affordable housing options often associated with the suburbs,” the report said.

Further, crime and homelessness can be drivers behind the corporate office exodus from many of the largest U.S. cities, so places like Lakeland offer “a more satisfying lifestyle and positive business environment.”

This article originally appeared on The Ledger: Report: Lakeland among the top locations for corporate offices