Despite Headquarters Defections, Chicago Keeps Title As Top Spot for Investment
Chicago broke its record for luring corporate relocations and expansions last year, according to a ranking from a relocation industry journal, making it the nation’s top metropolitan area for investment for the 10th year in a row despite some high-profile headquarters defections.
The award from Site Selection magazine, announced Wednesday by the Georgia-based publication, comes after some headline-grabbing setbacks in 2022.
The honor happened to be announced the day after Chicago Mayor Lori Lightfoot failed to advance to a runoff election for a second term. The upcoming change atop City Hall could bring changes to the way the city is perceived, for better or worse, by C-suites and real estate investors in the years to come.
Aerospace giant Boeing moved its headquarters from Chicago to the suburbs of Washington, D.C., and hedge fund Citadel shifted its head office to Miami. Also last year, heavy machinery maker Caterpillar relocated from the northern suburb of Deerfield, Illinois, to Irving, Texas.
Despite the loss of prestige from those three move-outs and the struggles of the Loop business district since the onset of COVID-19, the Chicago area had 448 overall qualifying deals, seven more than the metropolitan area’s U.S.-record 441 relocations and expansions in 2021.
The Chicago area topped the Dallas area’s 426 qualified deals, the Houston area’s 255 qualified deals and the New York area's 246 qualified deals. In the category of the nation’s metro areas with more than 1 million people, Austin, Texas, won the award for the most qualifying projects per capita, with 132.Competing for Jobs
Site Selection’s honors are mentioned by cities, states and regions competing for jobs. The magazine said it has more than 41,000 subscribers, most of whom are involved in corporate relocation decisions. While the selection comes from a trade journal with limited reach, the reasons behind the selections and rankings provide commercial real estate professionals around the world with a sense of potential development opportunities.
“If winning multiple championships establishes dynasties, what do you call it when you win 10 years in a row?” Site Selection Managing Editor Adam Bruns said in a statement by the magazine and Chicago-area officials. “In Chicagoland, they hand the ball back to the ref and act like they’ve been there before. Because they have. Our project data tell us the metro area continues to attract companies and the talent those companies covet.”For the 11th straight year, Texas won the magazine's Governor’s Cup for the state with the most projects, with 1,028, well above second-place Illinois’ 487, Ohio’s 479 and California’s 375.
Kansas won the Governor’s Cup for most projects per capita, with 138. Kansas took the same honors last year.
Major Chicago investments include California-based tech company Google’s agreement to buy and hire thousands of workers in the formerly state-owned James R. Thompson Center in the Loop business district, in an expansion from the company’s already large Midwest headquarters west of there in the Fulton Market district, and Michigan-based cereal giant Kellogg’s plans to spin off into three companies, the largest of which will be based in Chicago.
Other notable investments in the city include Virginia-based candy maker Mars’ ongoing construction of what will become its largest research and development hub on Goose Island, Canada-based BMO Financial’s move to anchor a new 52-story office tower near Union Station and Dutch cold storage logistics firm NewCold’s office expansion in the 40-story office tower at 500 W. Madison St.
Southwest of Chicago, Canadian electric truck and bus maker Lion Electric opened a large plant in Joliet, Illinois. West of Chicago, Ace Hardware signed a huge headquarters lease to anchor a redevelopment of the former McDonald’s headquarters in Oak Brook, Illinois, which the fast-food giant left behind when it moved to Chicago’s Fulton Market district in 2018.
Despite concerns such as high taxes and crime, the Chicago area benefits from a central U.S. location, transportation such as O’Hare International Airport, a key position in the nation’s supply chain and proximity to top universities such as the University of Chicago and Northwestern University.
The Chicago region’s gross regional product grew 3.1% last year, with a 2.2% increase in employment, according to the economic development group World Business Chicago. The transportation and logistics sector experienced a 3.8% increase in employment, with 1,500 new jobs created.
To qualify under Site Selection’s criteria, projects must be private-sector investments of at least $1 million, create 20 or more new jobs or add 20,000 square feet or more, according to the magazine.
Boeing and Citadel are keeping a large percentage of their employees in Chicago despite the change in designation, while Caterpillar shut down its office in the northern suburbs, which it wants to sublease to another tenant.
In a statement, Lightfoot called winning the 10th consecutive Top Metro award “a resounding affirmation of Chicago’s global reputation as a thriving business hub.”
“With our central location, pipeline of inclusive and skilled talent, and diverse economy, Chicago continues to attract and retain the best and brightest in the business world,” Lightfoot said. “This impressive accomplishment is a testament of our commitment to driving sustainable and inclusive growth and ensuring that our city is a premier location for businesses to expand and thrive."
Elgin Development Group
Ryan Ori, CoStar News
- March 06, 2023