Everyone has a different opinion and methodology for evaluating and selecting target investment market. Some investors simply prefer to invest where they live. Some investors place less importance on the market and more importance on the deal. Some investors will perform an in-depth evaluation, analyzing factors such as unemployment, population growth, jobs, historical rents, etc.
Another unique strategy (or at least something else to think about) for selecting a target investment market is to consider locations with a large number of Fortune 500 companies.
The logic behind considering markets with a large number of Fortune 500 companies is simple: a multibillion-dollar corporation is likely capable of performing better due diligence on a market than you.
Now, this doesn’t mean that you should only invest in markets with Fortune 500 headquarters or that the number of Fortune 500 headquarters is the only relevant market factor. However, when a Fortune 500 company decides to remain in or move to a market, one can assume that they based their decision on the current and future economic strength of the market.
That said, here are the seven markets that are home to more than 15 Fortune 500 headquarters as of 2018:
7. San Jose, CA MSA
Number of Fortune 500 Companies: 16
Top Fortune 500 Companies: Apple, Inc. (4), Alphabet Inc. (22), Intel Corporation (46), HP Inc. (58), Cisco Systems, Inc. (62)
6. San Francisco, CA MSA
Number of Fortune 500 Companies: 17
Top Fortune 500 Companies: McKesson Corporation (6 – recently moved to Dallas MSA), Chevron Corporation (13), Wells Fargo & Company (26), Facebook, Inc. (76), Oracle Corporation (82)
5. Minneapolis, MN MSA
Number of Fortune 500 Companies: 18
Top Fortune 500 Companies: United Health Group Incorporated (5), Target Corporation (39), Best Buy Co., Inc. (72), CHS Inc. (96), 3M Company
4. Houston, TX MSA
Number of Fortune 500 Companies: 21
Top Fortune 500 Companies: Phillips 66 (28), Sysco Corporation (54), ConocoPhillips (95)
3. Dallas, TX MSA
Number of Fortune 500 Companies: 22
Top Fortune 500 Companies: Exxon Mobil Corporation (2), AT&T Inc. (6), Energy Transfer Equity, L.P. (64), American Airlines Group Inc. (71)
2. Chicago, IL MSA
Number of Fortune 500 Companies: 35
Top Fortune 500 Companies: Walgreens Boots Alliance, Inc. (19), The Boeing Company (27), Archer-Daniels-Midland Company (48), Caterpillar Inc. (65), The Allstate Corporation (79), United Continental Holdings, Inc. (81), Exelon Corporation (92)
1. New York, NY
Number of Fortune 500 Companies: 79
Top Fortune 500 Companies: Verizon Communications Inc. (16), JPMorgan Chase & Co. (20), CitiGroup Inc. (32), International Business Machines Corporation (34), Johnson & Johnson (37), MetLife, Inc. (43), Pfizer Inc. (57)
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