Site Selection magazine has listed Chicago as the best city for corporate investment for the fourth consecutive year. This comes as little surprise with the long list of large corporations that have been moving their headquarters into downtown Chicago. So, what makes this city such an attractive investment for businesses?
Home to Headquarters
Since Google moved to Chicago, a number of other large companies have thrown their hat in the ring, such as McDonald’s, Wilson Sporting Goods, Cars.com and Motorola Solutions. While the stream of corporate giants relocating to Chicago appears to have slowed, other large businesses (Kraft-Heinz, ConAgra and GE) have announced their plans to relocate to downtown Chicago as well. This trend has extended beyond the corporate giants, as World Business Chicago reports that the entire Chicago metro area saw 350 corporate expansions and relocations in 2016.
Within Chicago’s city limits is one of the country’s largest concentration of universities. Which unsurprisingly leads to 36 percent of people in Chicago earning a four year college degree, compared to the 30 percent national average. Corporations are moving to be closer to where their employees want to live, which allows them to create a greater range of amenities to provide a higher quality of life for their workforce. Compared to California, New York and Boston, Chicago has a low cost of living while maintaining a high caliber quality of life (clean parks, museums, elite restaurant scene, iconic sports teams, etc.).
Good For Business
Chicago leads all major U.S. cities in direct foreign investments, which is a critical element of creating a successful global economy. With the 350 corporate expansions and relocations in 2016, came nearly $2.8 billion in new investments and roughly 14,000 jobs. Chicago is a leader when it comes to business growth, and that doesn’t exclude small businesses. The city of Chicago ranks among the best in the world for tech startups to plant their roots, as Chicago has a reasonable cost of living and cost of operating a company. After three consecutive years as the leader of corporate relocations, more top talent is following. This has helped lift Chicago to become a renowned technology hub, as well as a location for companies and their employees to flourish.
The last four years have been significant for the city of Chicago, as it grows into its role as the nation’s best location to invest. With access to highly educated talent, an elite business community and a leading startup scene, Chicago appears poised for ongoing, long-term success.
Recently, the Financial Accounting Standards Board (FASB) updated their standards effectively changing the way companies must list their lease on their balance sheet. This will undoubtedly have rippling effects on businesses, and the leasing process as a whole. The update has the potential to alter the landscape of the commercial real estate lease.
The FASB updates aim to maintain consistency among accounting practices. The update will make businesses account for the entire value of a lease in year one. While it is purely an effect on paper, bankers, lenders and investors will need to understand the changes that will show up on a company’s ledger. The impact will be felt the most by large businesses, however small- to mid-sized businesses will still be affected. The updates will be implemented as of December, 15 2019 for publicly held companies, and Dec. 15 2020 for privately held companies. While this may seem far down the road, preparations to compensate for the potential change in your business’ ledger should start now.
Commercial real estate leases need to be negotiated with the new changes in mind, as the new standard will inflate the debts of a company during the first year of the lease. This could impact compliance with current loans, affect future loan approvals and potentially mislead investors. The mandatory listing of a full lease as a liability will be a challenge for accounting teams of larger corporations who strive to maintain consistent earnings. The new standards may throw a company’s books out of balance, and this will be a major factor to consider when negotiating a lease.
The Advantage of a Professional
A professional broker who is trained in understanding the new FASB regulations will be most effective at negotiating optimal lease terms to minimize the impact on your balance sheet. This will include new ways to structure the base rental rate, timing of rent increases, separating out operating expenses and focusing on expansion rights rather than lease renewals that would leave a larger mark on your financial ledger. The ever-changing policies and guidelines are an important reminder to seek the assistance of a professional broker, such as the ones at Tenant Advisory Group. We work closely with our clients to advise them of the best way to proceed in signing a lease while keeping in mind the various impacts of the new FASB guidelines.
Organizing the layout of your new office space is about more than just configuring desks — this complex art is actually an important contributor to your overall company culture and happiness! You’ll need to consider important factors like gathering areas, noise level and relaxation stations. Here are a few key factors to keep in mind while planning a new office space.
Remember the Employees
Employees will spend a significant amount of time in the new office, so it’s important to consider their wants and needs to increase workplace satisfaction. A well-designed office should adapt to the needs of the workers, and match the culture of your company. For example, a collaborative business will want an open space and less private offices, as that will promote communication. Space planning can also set aside an area where employees can personalize their work environment to create a sense of ownership and encourage productivity.
Plan for the Future
A company is never done growing, so leaving room for expansion when space planning can save money down the road. Consider how fast growth will happen and how many employees the company may need to accommodate down the road. Don’t forget about storage as well. How much will your company need? Every business has different storage and filing needs, but it is always a critical aspect of a successful office layout.
Attract Top Talent
Proper space planning can create an inviting place to work, allowing you to attract top talent. Everything you can do to increase the quality of life for your employees will be reflected in the productivity of your office. Americans spend almost as much time at the office as they do at home, so building an office space that makes your employees happy is vital to the success of a company. It is definitely worth the extra budget to create an inviting and comfortable work environment.
Companies with several departments may want more than one type of layout within the office, as each department may thrive in different layouts. (Accounting may want cubicles, marketing may want an open floor plan and executives may want private offices). Working with an established broker will give you access to other professionals, such as an architect, who can help design your office layout.