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WASHINGTON, DC—Millennials are leaving big cities and moving tolocations with a lower cost of living and higher quality of life⁠—ademographic shift is having an impact on the available talent poolsand labor costs for businesses. Research shows over the pastseveral years, thousands of companies and hundreds of thousands ofjobs have left markets in expensive cities, in part to follow theflow of talent. Cresa's analysis shows that these companies arelikely saving anywhere from 15% – 30% of annual operating costsrelated to labor, taxes, real estate and utilities.

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"Companies from major cities on the east and west coasts havebeen relocating to more cost-efficient geographic areas such asTexas, Tennessee, Colorado and Washington," Jim Underhill, CEO ofCresa, an international commercial real estate company, tellsGlobeSt.com.

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"In recent years, specific cities such as Austin, Dallas,Denver, Nashville, and Seattle have seen large HQ relocations andbusiness expansions into their region, creating thousands of newjobs and resulting in billions of dollars in capital investments"he adds.

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For example, Austin has seen major expansions from Google,Apple, Amazon, and General Motors plus Seattle has seen majorexpansions from Apple, Facebook, Google, and Uber, in addition toExpedia locating their headquarters there.

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"We are beginning to see, however, that with all of Seattle'sgrowth, it's losing its advantages, and other markets such asPortland, Oregon are seeing greater activity," observesUnderhill.

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With millennials getting older, married, and having children,their preferences are indicating a willingness to relocate forbenefits such as a lower cost of living, higher quality of life,better schools and family amenities.

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Companies are following the labor market and relocating fromcoastal cities, such as in California or New York, and opening newoperations in more cost-efficient markets. This is also in part tothe demographic shifts and the business-friendly environmentscertain states and cities are creating for corporations.

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These cost-efficient markets also offer benefits to workers asthey have 40%-60% lower cost of living (compared to cities such asSan Francisco, LA and New York) and higher quality of life benefitssuch as more affordable housing, lower tax rates and shortercommute times, Underhill says.

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As expected, retail growth follows these corporate andmillennial relocations.

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"Retail growth is likely to organically follow where demographicand economic growth is happening. As the millennial populationshifts toward geographies that offer advantages such as affordablehousing, high quality of life, and lower cost of living, retailrent gains and lower vacancies will likely shift to those sameregions," says Underhill.

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Consumer retail spending is at its highest where populationshave disposable income growth. In these geographies where themillennial population is growing and economic expansion isoccurring, retail is holding strong due to the overall increases inpersonal disposable income.

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