Why do major employers often plan ahead for relocations?

Major employers plan ahead for relocations primarily to manage inelastic supply and prevent space shortages. In real estate, the term "inelastic supply" refers to a situation where the availability of space cannot easily be adjusted in response to demand changes. When businesses grow or shift operations, the demand for office or operational space can increase rapidly, making it crucial for employers to anticipate these needs. By planning relocations in advance, employers can secure the necessary square footage and strategically position themselves in desirable areas before potential shortages arise.

Identifying optimal property locations is also an important consideration, but it is typically a part of the broader planning process that encompasses managing supply and demand effectively. While avoiding long-term leases and maximizing rental costs are factors business leaders consider, they do not capture the urgency and necessity of preventing space shortages in the face of rapid changes in business needs and market conditions.