LYNN KING
‘Strategic partners’

Strength in the health care, biotechnology and biopharmaceutical industries is not only providing hope for the commercial real estate industry in Greater Boston, they are also aiding residential relocation activity.

Real estate companies are reporting that sales within their relocation divisions are up, with a significant portion of the business flowing from life sciences and biotech companies that are either expanding in or moving to the region.

With many companies, especially in the regionally important high-tech sector, cutting jobs and downsizing, relocation activity in Massachusetts had slipped. But activity is rebounding, and for some real estate companies, surging.

“There was a bit of a slowdown when we were in recession mode but that seems to be turning around,” said Judy Moore, a Lexington Realtor who serves as the president of the Massachusetts Association of Realtors.

Relocation has been a lucrative business for some residential real estate firms. Some of the larger real estate companies have invested a significant amount of resources building up full-service relocation divisions.

Coldwell Banker Residential Brokerage Relocation and Moving Services, which bills itself as the largest relocation company in New England, generated a sales volume of $1.8 billion with 4,505 units sold last year and is on track to reach $2 billion in sales this year.

“On a whole, we’re seeing that our business is growing exponentially every year,” said Lynn King, senior vice president of corporate services.

With a staff of more than 60, Coldwell Banker’s relocation division provides all the services that a corporation would need to provide to transferring employees, explained King. The company has relocation counselors who manage the entire move for clients, eliminating the need for them to work with multiple service providers.

Coldwell Banker’s Business Development Department directly solicits relocation business from corporations. The company also gets leads through its own agents and accepts and makes referrals to other firms.

Three or four years ago, when dot-com and high-tech businesses were failing, many relocation companies experienced a downturn. But King said business in Coldwell Banker’s relocation division, which has 400 to 500 corporate clients, was growing even throughout the downturn.

And other relocation companies have also been quick to rebound, greatly aided by the emergence of biotech and biopharmaceutical companies wanting to locate their home bases near premier, local research universities like Harvard University and the Massachusetts Institute of Technology.

Business may also be given a boost by LifeTech Boston, an initiative designed to grow the city’s life sciences sector that is administered by the Boston Redevelopment Authority.

King said half of Coldwell Banker’s relocation business comes from life sciences firms, with a lot coming from biotech and biopharmaceutical companies.

The region’s colleges and universities also continue to provide a steady source of business for real estate firms.

Conway Relocation Co., Norwell-based Jack Conway & Co.’s corporate services division, has also experienced sales growth. Sales volume within the division is up 64 percent from last year, said Maureen McCaffrey, president of Conway Relocation.

“This year is the best year I’ve had in relocation,” she said.

Jack Conway’s relocation division has a staff of seven, including counselors who help consumers move into and out of the area. While it has its own list of corporate clients, the company’s relocation division also gets leads and referrals from other real estate brokers, through large relocation management companies like Cendant, and through its affiliation with RELO – the largest relocation network of independent real estate firms.

McCaffrey said life sciences and the health care and pharmaceutical industries have been a significant part of Jack Conway’s relocation business, as well as government workers and athletes.

There was a time when a lot of young professionals in the high-tech industry were relocating into the area, but that has largely disappeared, said McCaffrey.

But Moore, a broker with Re/Max Premier Properties in Lexington, said the high-tech sector continues to move employees around, as well as the universities and the banking and financial services industries.

Overall, employee transfer activity is increasing, according to the Employee Relocation Council, a Washington, D.C.-based relocation network that provides relocation training and designations to real estate agents. The Boston area is one of the most active metro areas in the country in terms of total of employees moving into and out of the area, with roughly 18,000 moves in 2002, according to information provided by the Employee Relocation Council.

On average, companies moved 276 employees in 2002, and the average transfer activity increased by 5.4 percent to 291 in 2003, according to a council survey.

Companies are spending big money to transfer employees. The average cost of transferring current homeowning employees within the United States is almost $71,000, while the average cost of relocating an employee who rents is about $19,129. The cost of relocating new hires is less for both.

The biggest increase that is anticipated in 2004, according the council, is in the number of new hires being relocated. In 2003, 29 percent of all transferees were new hires, and that number is expected to climb to 33 percent of total activity in 2004.

While domestic relocation is most frequent, executives working in the relocation field in the Bay State say there has been growth in international relocation.

“We’re seeing an uptick in international moves,” said Coldwell Banker’s King. Companies are responding by providing specialized services – helping consumers who are temporarily relocating to the United States to obtain everything from a driver’s license or bank savings account to setting up telephone service.

At New England Relocation Group, the full-service relocation division of the three local GMAC firms, Carlson, Hammond, and Kinlin Grover, there is a team of 12 real estate agents who are trained to provide such “settling-in services” for international clients, said Barbara Babin, vice president and director of the New England Relocation Group.

The New England Relocation Group also has a team of tour coordinators that helps international clients who need to rent, instead of buy, a home.

Also driving relocation in New England is the large number of smaller start-up companies that need a specially trained workforce and have to search all over the world to find employees, said Fran Freshman, senior corporate consultant for the New England Relocation Group.

Outsource Opportunities

In addition to helping people move to the United States, companies also are aiding people who have to relocate to other countries. Jack Conway’s relocation division has helped people move to Mexico, Argentina, Italy and Estonia, said McCaffrey.

Besides more international business, executives at Coldwell Banker have noticed other trends. King said that companies are always looking for ways to minimize the cost of relocating employees so there has been a “deepening” of partnerships. “We’re becoming more strategic partners with the companies,” she said.

More companies also are providing benefits, like cash-back bonuses, to employees who purchase or sell homes through specially created affinity programs. And companies are turning to outside sources, instead of using in-house staff, to handle all the details of the moving workers.

“Companies are looking to fully outsource their relocation programs,” King said.

In the Bay State, one of the main challenges for employers wanting to transfer or hire new employees is the region’s high housing costs, according to local real estate professionals

“The challenge in Massachusetts is always the high cost of living,” said Moore, the MAR president. Moore, who says that about half of her business is relocation-related, said she has seen people who have decided not to transfer to the Greater Boston area because of the high home prices.

Coldwell Banker’s King said high housing costs are “the No. 1 challenge” and that’s why the company’s relocation counselors work with consumers and explain the local housing market. While their colleagues may be telling them to search for a home in desirable and high-cost communities like Wellesley or Newton, a transferee’s budget may not make that possible.

Communities in southeastern Massachusetts, where Jack Conway has a significant presence, offer more affordable housing options. With more people telecommuting, they can be more flexible with where they reside, said Jack Conway’s McCaffrey, and many are choosing to live in Bay State communities despite the higher home prices.