Why Corporate Real Estate Leaders Are Choosing Secondary Cities - Business Facilities Magazine

"C orporate real estate strategy has entered a new phase. Expansion decisions are no longer driven by brand prestige or default gateway markets. Today's environment demands cost discipline, workforce stability, operational resilience, and long-term flexibility. For companies considering expansion or relocation, smaller metros - often called secondary cities - are increasingly landing on the shortlist. Not as compromises. As competitive, strategic options."

"Over the last several years, three forces have converged: Sustained cost pressure Evolving workforce expectations Increased operational risk awareness Higher interest rates have made capital more expensive. Lease obligations are under scrutiny. Long-term fixed costs matter more. At the same time, employees are prioritizing affordability, lifestyle balance, and manageable commutes. Corporate real estate teams are being asked to deliver environments that support productivity without inflating overhead. Secondary cities frequently meet that mandate."

Corporate real estate strategy has shifted toward prioritizing cost discipline, workforce stability, operational resilience, and long-term flexibility. Expansion and relocation decisions increasingly include smaller metros, known as secondary cities, as competitive strategic options rather than compromises. Three converging forces drive the shift: sustained cost pressure, evolving workforce expectations, and greater operational risk awareness. Higher interest rates increase capital costs and focus attention on lease obligations and long-term fixed costs. Employees increasingly prioritize affordability, lifestyle balance, and manageable commutes. Secondary cities commonly offer lower Class A lease rates, slower wage escalation, more affordable housing, reduced congestion, strong regional talent pipelines, and higher retention.

Read at Business Facilities Magazine