Introduction
The financial and business services sector is not simply recovering from recent disruption. It is reconfiguring. A convergence of forces — the normalization of hybrid work, the rapid rise of artificial intelligence, sustained pressure on cost structures, and a broader reassessment of what a corporate footprint should accomplish — has made location strategy one of the most consequential decisions organizations in this sector can make.
For executives, economic developers, and site selection professionals, the implications are both immediate and long-term. Office vacancies are beginning to recede. Headquarters are moving with renewed purpose. Consolidation is reshaping metro markets and creating clear advantages for some communities. At the same time, AI is introducing a variable that no location strategy can afford to ignore.
The organizations and communities that understand these forces and respond with discipline will help define the competitive landscape of the next decade. Six trends are shaping that landscape right now and understanding them is the starting point.
Trend 1: Office Location Activity Is Carefully Returning
For most of 2021 through 2023, office location activity across the financial and business services sector was largely halted. Remote work had separated the workforce from the workplace, and organizations found themselves holding more space than they needed. New office location decisions slowed to a near standstill as leadership teams waited to understand what the new normal would actually look like.
That patience is beginning to shift. Activity started flowing in 2024, picking up modest momentum through 2025, and the trajectory points to a more meaningful uptick in 2026 with considerably stronger movement anticipated in 2027. The market is not returning to pre-pandemic velocity, but the long freeze is thawing, and the organizations that are moving are doing so with strategic clarity.
One signal worth watching: the national office vacancy rate peaked at approximately 20.5% in mid-2025 and is forecast to recede to around 13% by 2029. That compression tells a story about selective reabsorption. It is not a broad-based recovery, but a deliberate one driven by organizations making intentional footprint decisions rather than reactive ones.
Trend 2: Artificial Intelligence Is Reshaping the Footprint
No trend is generating more conversation in corporate strategy circles right now than artificial intelligence. For financial and business services organizations evaluating location strategy, AI’s full impact on the physical footprint is still taking shape. What is becoming clearer, however, is where disruption is most likely to appear first and what it may mean for the type and amount of space organizations will need going forward.
The most immediate and significant effects are expected in back-office and non-client-facing functions. Industry analysis suggests AI could eventually automate between 60% and 70% of administrative tasks across functions that have historically required significant headcount and dedicated space. The areas most exposed include:
- Financial reconciliations and expense management
- Data entry and document processing
- Claims processing
- Basic customer service and help desk support
- Compliance checks and performance analytics
Customer service and help desk functions remain a more nuanced category. These tasks are areas where human judgment, responsiveness, and relationship quality have long been important differentiators, so the pace and extent of AI-driven change will likely vary by firm, client segment, and regulatory environment. Even so, the broader direction is becoming increasingly difficult to ignore.
While AI will undoubtedly eliminate certain functions and jobs, it will also require higher levels of skills for oversight and implementation. A company would be well advised to restructure workflows, consider the loss of knowledge/innovation/potential future leaders associated with more entry-level positions, ensure ethical and transparent adoption of the technology, and invest in upskilling.
The impact on location strategy will likely be far fewer wholesale moves of back office functions only to reduce costs, greater emphasis on higher-level skills in site selection, and a mix of both back and middle office operations for either establishing new office hubs or relocating/consolidating existing operations.
Trend 3: The Consolidation Dynamic Is Reshaping Markets
Consolidation constitutes one of the most structurally important categories of office location activity in financial and business services today. It is not a single decision type but rather a range of strategic choices that vary considerably in their scope, geography, and implications for the communities involved. What ties these strategies together is a shared effort to align real estate footprints more closely with workforce models, operating priorities, and long-term growth plans.
Consolidation strategies can also entail a growth subset. Citigroup is consolidating its New York City presence while maintaining a satellite campus in New Jersey and actively growing regional hubs in markets such as Charlotte, where functions including finance, risk, and compliance are expanding. JPMorgan Chase is consolidating its Manhattan headquarters with a full five-days-in-office expectation, while simultaneously growing regional hubs in Columbus, Dallas-Fort Worth, Tampa, Delaware, and Phoenix. These geographic deployment strategies are not isolated as they reflect a broader logic playing out across the sector.
The most common consolidation patterns include:
- Local market consolidation. Collapsing multiple locations within a metro into a single hub, a hub-and-satellite structure, or a flagship office that anchors the organization’s presence. This model has become a predominant force for business/financial services location activity. One dynamic is the flight into new/modern office space that has ample amenities (on-site or nearby) and is close to where the targeted workforce resides (reflecting a growing resistance to longer commutes). Cerner’s (now owned by Oracle) regional consolidation in metro Kansas City is a good example.
- Flagship consolidation and redeployment beyond the home city/metro. An example would be Blackstone consolidating Manhattan office activities while establishing a hub in South Florida.
- Regional hub combination. Merging two or more regional locations into a single, stronger hub, often in a market with better talent access, cost dynamics, or strategic positioning. Goldman Sachs is illustrative of this strategy with an expanded hub in Dallas.
Trend 4: Corporate Headquarters Relocation Remains Persistent
Unlike some location activity categories that surged post-pandemic and are now normalizing, corporate headquarters relocation has remained relatively consistent across the industry spectrum, including business/financial services. As many companies undergo strategic transformation, headquarters location plays an important supporting role in achieving renewed strategic objectives. Once the strategy dimension has been addressed, most companies seek locations with moderate operating and living costs, an established headquarters ecosystem, deep talent pools, and extensive air service.
Given the reasons noted above, the majority of headquarters relocations tend to land in larger metro areas. Examples include Charles Schwab, Citadel, Hewlett-Packard Enterprise, Oracle, and Truist. But smaller metros can play in the game if there is a unique reason or a hook. An example is Dun & Bradstreet relocating from the Northeast to Jacksonville.
It is worth noting that “HQ relocation” is not a single, unified decision. Organizations move varying levels of their leadership and operational infrastructure, and the composition of what relocates matters considerably for site selection:
- C-suite only. The senior leadership team relocates while core operations remain in the legacy market.
- C-suite plus client-centric and essential support functions. A more substantive move that repositions the firm’s center of gravity.
- Entire headquarters. A full relocation that signals a definitive commitment to the new market.
Trend 5: New and Expanded Office Locations
If consolidation and headquarters relocation represent the dominant storylines of current office location activity, new and expanded office locations comprise a quieter but meaningful subplot. Activity in this category remains modest at best. Still, it is real, and it is telling of which organizations have the strategic confidence and financial capacity to grow their footprint in the current environment.
Technology companies are leading this category, with financial services firms playing a secondary but active role. The combination makes sense: technology firms with strong balance sheets and aggressive talent strategies have continued to expand into markets that offer the right workforce profile, whereas select financial services organizations have identified growth opportunities in markets where they are underpenetrated relative to their competitive position. Talent pool breadth and depth, operating costs, and geographic diversity that allows for flexibility in deploying business operations are among the key drivers.
Farmers Insurance has established new operations across Kansas City, Grand Rapids, Phoenix, and Rhode Island. GEICO has expanded into Tampa. Booz Allen Hamilton expanded its Norfolk footprint. Wells Fargo is consolidating and expanding a major hub in the Dallas/Fort Worth Metroplex. Fidelity exemplifies a location strategy that many firms in the business/financial services sector follow. While the firm maintains its home base in Boston, it has decentralized a host of functions to lower cost metros that feature a solid pool of requisite talent.
Among technology companies that have established new hubs are Google (Austin), Travelers Insurance Tech Hub (Atlanta), and Oracle (Denver). However, tech companies have also invested in higher-cost locations for reasons such as proximity to customers, a large pool of critical talent, and the potential for partnership (e.g., with universities). An example of such a hub would be Google’s new office in Manhattan (Hudson Square/Tribeca).
Trend 6: The EDO Playbook for Attracting and Retaining Office Enterprises Needs to Evolve
For economic development organizations, the forces reshaping office location strategy create both risk and opportunity. The communities that outperform will be those that move from reactive efforts to a proactive, intelligence-driven approach — maintaining strong relationships with the local corporate base, tracking lease expirations, and basing outreach on the events most likely to trigger a location decision, such as CEO transitions, merger activity, and private equity portfolio shifts.
The market’s business case also needs regular updating, grounded in documented talent pools by sector and submarket, and measured against the criteria companies consistently prioritize: Quality Class A space, access to talent within a 30-minute commute, and sufficient housing and childcare capacity.
EDOs also need to get ahead of AI disruption rather than respond to it after the fact. Engaging local companies on AI’s likely effect on talent and space requirements helps position the EDO as a strategic partner. Rising Class B and C office space vacancies should likewise be treated as an opportunity, with adaptive reuse as housing, mixed-use development, or data centers offering long-term value. Just as important, office attraction and retention increasingly require a regional, not purely local, strategy.
In Conclusion
Location activity within the business and financial services sectors is regaining momentum. We will continue to see footprint consolidation due, in part, to underutilized space emanating from new workplace models (e.g., hybrid) and selective downsizing resulting from both AI and market conditions.
At the same time, there will be continued deployment to regional hubs and, in some cases, satellite offices close to headquarters. The regional hub strategy will continue to predominate in markets possessing extensive talent pools and moderate operating costs. Depending on scale, small to mid-size metros will also be players in the regional deployment strategy.
Responding to transformative change in business strategy, headquarters relocation will not be uncommon. It will be more prominent among companies that undergo structural change, such as mergers or acquisitions, divestitures, private equity investments, business diversification, or even CEO change.
To select the best long-term location for business/financial services operations, it is of utmost importance to define both the composition and scale of talent required at a new (or expanded) site. Talent attraction/retention will sit at the top of the food chain for selecting future locations. Assessing the depth of talent, competition for that talent, requisite compensation to effectively compete for talent, and other considerations to ensure preferred employer status and enhance HR recruitment/retention will be of critical importance.
As a corollary, office space must be sufficiently attractive to entice workers back to a physical site. This appeal embraces office layout/design (promoting collaboration, innovation, and company values), selecting a submarket easily accessible to resident skills, ensuring that either a hybrid (e.g., 3-4 days a week in office) or full-time in-office model will be on par with labor market competitors, and taking into account affordable housing plus childcare availability/cost within a reasonable distance of the worksite.
Economic development organizations will need to better define their operational advantages for targeted industries/functions. This should include documenting talent resources by submarket. Additionally, local EDOs within a metro area will need to closely cooperate when a company is seeking a new site for consolidated operations. Furthermore, EDOs will need to become actively involved in charting re-use strategies for older, vacant office space (for anything from affordable housing to data centers).
About the Author
Dennis J. Donovan is a Principal of Wadley Donovan Gutshaw Consulting, LLC, based in Bridgewater, NJ. WDGC has advised many business and financial services firms on location strategy and site selection for over four decades.
