By Bill Hethcock – Dallas Business Journal
Texas by far surpasses all other states in luring corporate headquarters from California, new research shows.
It’s not even close.
Texas stands head and shoulders above all other states in the race to attract corporate headquarters exiting California, with Dallas-Fort Worth and Austin topping the list of destinations within the Lone Star State.
That’s according to a new analysis shared exclusively with the Dallas Business Journal.
California lost 44 headquarters to other states between Jan. 1 and June 23 of this year, and 21 of those companies went to Texas, according to business relocation expert Joe Vranich, president of McKinney-based site-selection consulting firm Spectrum Location Services, which tracks corporate headquarters moves.
That’s 47.7% to Texas so far this year, and 52.3% shared between the other 48 states.
Taking a longer timeframe, since Jan. 1, 2018, 101 companies have moved their headquarters to Texas from the Golden State. The next winningest destination in that time period was Tennessee with 21 relocations from California, followed by Arizona with 17, and Colorado with 14, Vranich and Spectrum’s numbers show.
Florida and Nevada landed 13 California HQ relocations apiece between 2018 and the present. Georgia and North Carolina lured five apiece. Idaho, Oregon and Virginia attracted four HQ relos each from California, and Indiana and Minnesota won three each, according to Vranich.
The rest of the states landed two or fewer California HQ move-ins.
“Texas is remarkable for the number of facilities it attracts, not only from California, but from other states,” Vranich said in an interview with the Business Journal on Wednesday. “Another thing that stands out is, the relocations reflect every industry — pharmaceutical, retail, consulting, banking, real estate.”\
Ten California companies that moved or announced relocations so far this year chose Austin or its surrounding cities for their headquarters moves, while seven chose Dallas-Fort Worth. Two chose San Antonio and one chose Houston. The rest are scattered throughout the state, Spectrum’s tracking shows.
Meanwhile, Austin Business Journal has tracked 25 headquarters that have been set up in the region since the start of 2021, including both primary headquarters and secondary or country headquarters. Of those, nine were relocations from California.
ABJ has reported on numerous factors driving the trend, including significant cost savings for many companies.
The California counties that lost the most headquarters to Texas since 2018 were Los Angeles, which had 48 move-outs; San Francisco, which lost 45; Orange, with 27; Santa Clara, with 27; and Alameda with 19, according to a spreadsheet Vranich shared.
Some of the headquarters moves to North Texas so far this year include Lion Real Estate Group, which relocated to Dallas from Los Angeles; Wiley X protective eyewear brand, moving its headquarters to Frisco from Livermore in the San Francisco Bay Area; First Foundation Inc. (NASDAQ: FFWM), a financial services company that relocated its headquarters to Dallas from Irvine, Calif.; and Wedgewood LLC, moving to Farmers Branch from Los Angeles.
Some of the Austin and Austin-area relocations launched or announced this year include Gilad & Gilad, moving to Georgetown from Los Angeles; Digital Realty Trust, relocating from San Francisco to Austin; and Green Dot, moving from Los Angeles to Austin, according to Vranich’s compilation.
Commercial real estate titan CBRE’s relocation of its corporate headquarters from Los Angeles to Dallas last year was particularly telling, Vranich said.
“Who, other than site selection consultants like me, know the economic makeup of the city and what the future parameters look like? Well, CBRE certainly would,” Vranich said. “The fact that they’ve selected Texas over their former California home is really remarkable.”
Vranich, whose own company was hatched and operated in California until he decided to move it out of the state a few years back, has previously tracked corporate headquarters, manufacturing facilities, data centers, research hubs, software and engineering centers and other business relocations or expansions that likely would have occurred in California but ended up elsewhere. This is the first time Vranich has narrowed his focus to strictly headquarters that exit California and so-called “HQ2s” or “second headquarters” that California-based companies decide to locate outside of the Golden State, he said.
“There are three HQ2 instances that I included in the list because the new host city benefits from the flux of highly compensated executives, VPs, lawyers and so forth,” Vranich wrote in an email to Dallas Business Journal.
Looking at 2020, the last full year that Vranich tracked, 20 out of 57 corporations that moved out of California chose a Texas destination, and again Austin and Dallas-Fort Worth dominated the list.
In 2019, 28 of the 77 headquarters leaving California landed in Texas, and in 2018, 23 of the 57 headquarters on Vranich’s list chose Texas locales.
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