Texas' 'Business-Friendly' Marketing Is Paying Off As Corporate Relos Roll On
From office guys “carrying the lunch bags of industrial guys” in Austin, where $1B Tesla's Gigafactory is just the most prominent example of the city's industrial boom, to Dallas-Fort Worth's ascent to become the national “headquarters of headquarters,” Texas is having a moment in the sun.
Over the past two years, since the onset of the coronavirus pandemic, the state has gained nearly 100 corporate headquarters, according to Ed Curtis, CEO of YTexas, a business network for companies expanding in or moving to Texas. The organization, which held its annual State of Real Estate event late last month, predicts more sunny days ahead into 2022 as companies renew focus on the Lone Star State amid rapid growth in its metro areas, especially in the suburbs.
Leading the pack of Texas cities garnering relocations is the Dallas-Fort Worth metroplex, which is rapidly tacking on more Fortune 500 company headquarters, and is expected to soon become one of the largest metros in the U.S.
Texas has long promoted itself as a business-friendly state. Amid major companies relocating to Texas, like Tesla and Hewlett Packard Enterprise Co., real estate is seeing a boost.
"By 2030, they were forecasting that the DFW metroplex would be the third-largest metroplex in the country, behind New York and LA," said panelist Russ Anderson, president of Briggs Freeman Sotheby's International Realty, citing Freakonomics.
Freeman also sounded a note of caution.
"It's hard to imagine infrastructure and new construction being able to absorb that much growth and still provide the same quality of living that makes it so valuable to all of us today," he said.
Large manufacturing companies moving or expanding to Texas are setting up shop in suburban or rural areas outside of major metros, as seen in Samsung's $17B chip plant in Tyler. For that reason, the Greater Houston Partnership, Houston's primary chamber of commerce, is ramping up efforts to coordinate with other area communities to market Houston for company headquarters.
"Overall, Houston is doing well, and I would add, we’ve really upped our economic development efforts in the last two to three years. But the competition is stiff and getting stronger," Greater Houston Partnership Board Chair Thad Hill said at the 2022 annual meeting on Jan. 28.
Houston suburb The Woodlands was highlighted by YTexas for its partnerships and pro-business attitude, with U.S. Rep Kevin Brady, who represents a swath of Houston that includes The Woodlands, touting the region's push to return to normal operations after Covid-19 lockdowns.
"Communities like ours [are at an advantage], at a time where Americans now have rethought their life and work balance," Brady said at the YTexas event. "Quality of life has dramatically exploded up the list of criteria. Communities that don't understand that will lose."
A comparative rise in commercial rental rates in other states and high demand will keep Texas as a prime destination for companies seeking a new home.
"So long as there's demand — and I think there will be demand in Texas — that will continue to spur development, and it will continue to provide great returns for developers," Jay Lamy, principal and co-founder of Austin-based Aquila Commercial, said at the YTexas event.
