Tucson is expected to be one of the big winners of new corporate expansions and relocations as companies shy away from large, urban areas.
The COVID-19 pandemic has brought suburban and mid-size cities to the forefront for future investment, according to a recent survey of the Site Selectors Guild, the international site selection consulting group.
The guild specifically cited Tucson as one of the mid-size cities that is a strong candidate for new locations or expansions in the next year.
“As advisors on corporate location strategy across all industries, guild members are the first to see emerging trends and changes in corporate location decisions before they are ever made public,” said Jay Garner, guild board chair and president of Garner Economics LLC. “This perspective is particularly telling.”
Guild members said of places “likely or very likely” to be considered by corporations, the majority would be in mid-size cities or suburban and rural areas. Only 10% of members surveyed said large, urban areas would be considered.
“Everything from physical distancing to changing transit preferences has affected the way that corporations view location decisions,” said Rick Weddle, president and CEO of the Site Selectors Guild. “We hope this insight from our members will help both corporate decision makers and economic developers understand the changing landscape as well as new opportunities.”
Tucson’s appeal was already evident to Harsch Investment Properties, a real estate acquisition and development company.
The Portland, Oregon-based company recently opened a regional office in Tucson after completing an industrial building near the airport. It has 30 tenants around the state in more than 700,000 square feet of commercial space.
“We are thrilled to be opening an office in Tucson to manage all of our properties in Arizona,” said Bill Rodewald, senior vice president. “We have looked forward to the day when our Arizona portfolio would grow to the point that justified an office dedicated to serving our tenants and helping them grow.”
Harsch is an example of a company drawn to Tucson because of lower costs, business-friendly environment and workforce, said Joe Snell, president and CEO of Sun Corridor Inc., a regional economic development group.
And when companies such as Harsch pick Tucson, it puts the city on the radar that is complemented by citations from groups such as the Site Selectors Guild.
“We’re seeing quite a bit of interest,” Snell said. “We’ve spoken with quite a few manufacturers that are questioning their supply chain and shifting their focus from efficiency to resiliency.”
Several companies from Asia are considering a “closer to home” operation for distribution and fulfillment, he said.
For Tucson to be ready to accommodate new companies, Sun Corridor is putting together a working group to look at issues such as adequate child care and connectivity for remote working.
“How do we ensure we’re in a great position? Do we have the assets? What do we need to fix?” Snell said. “We want to be the group that has the main assets.”
Tucson has twice hosted the Site Selectors Guild, which also singled out Boise, Idaho; Colorado Springs, Colorado; and Reno, Nevada, as mid-size cities that are strong candidates for investment.
Guild members report more than 60% of expansion or relocation projects are moving forward with the majority of activity predicted to resume in 2021.
