Why so many corporate relocations are coming to North Texas
By CeCe Grosz, Marketing Intern
It’s no secret that the Dallas/Fort Worth metroplex boasts a business-friendly tax climate, talented workforce, and profitable market for many industries. But why exactly are we seeing so many businesses relocate to North Texas recently?
Adriana Cruz, executive director of Economic Development and Tourism for the Governor’s office, was recently quoted as saying that Texas has seen “a tremendous increase in the number of prospects and projects we have in very diverse industries” since the pandemic started.
Cruz credited the increased relocations to Texas to a “timely shutdown of the state economy when the pandemic struck and to a careful and methodical, data- and doctor-driven reopening of businesses” (Biz Journals).
Many of the relocations are coming from one place in particular: California. From the beginning of January 2021 to the end of June 2021, the state of California lost 53 headquarters to other locations across the country. Almost half (23) of those relocations moved to the Lone Star State. Since 2018, 107 California headquarters have moved to Texas, five times more than the closest competitor – Tennessee drew 22 CA relocations.
The last five Fortune 500 companies to relocate their headquarters to DFW have all come from California within the last six years. These include CBRE Group, engineering firm Jacobs, health care company McKesson Corp., convenience store supplier Core-Mark International, and financial services company Charles Schwab.
A notable recent relocation is First Foundation, a California financial services company which is now headquartered in the Crescent (Uptown Dallas). The company’s CEO, Scott Kavanaugh, says that “a lot of the move had to do with politically some of the things that are affecting many companies in California… It led to us thinking about where would we geographically want to be, and when you look at the landscape, in my mind, the clear winners are Florida and Texas.”
As of July 2021, the Dallas Regional Chamber is tracking 109 new projects in the city, including corporate office relocations as well as headquarters relocations.
A huge factor in relocations to DFW and Texas as a whole is the affordable cost of housing. The median cost of a house in Texas is only $195k, which is $36k cheaper than the national average. An explanation for all of the California companies relocating here is that the median cost of a California house is $552,800, a huge deviation from the national average. Corporate employees will have a much less burdensome cost of housing if they move to Texas.
The additional reasoning for all of these relocations generally remains consistent across many industries: the pro-business climate and lack of corporate or personal income tax, the central location, the proximity of DFW International Airport, the state’s large talent pool and the quality of life that Texas offers.