Location, Location, Location… It is the age-old adage for the three most important things about real estate. But what is in a location? What makes one location better than another? Last month we highlighted where Millennials want to live, work, and play in Dallas. Why is North Texas the “IN” place to be and why is it growing? With a population that surpassed 26 million residents in July of 2012, Texas has added approximately 450,000 residents annually since 2010. According to Forbes’ columnist Morgan Brennan, “since 2008, roughly 40% of the nation’s new jobs have been created in the Lone Star state and population growth has been explosive in response.” Dallas/Fort Worth (DFW) ranks as the 4th most populous metropolitan area in the US and the most populous in the State of Texas with 6.6 million residents (larger than 35 states). DFW draws people from around the country due to the low cost of doing business and living, the geography, and the infrastructure that exists in the DFW area.
Low Cost of Living
No human being enjoys giving away their hard earned dollar and the same goes for businesses. Texas has a low cost of living with no personal or corporate income tax and no state property or unitary state tax. Texas citizens are able to retain more of their money, and adding to that, the DFW Metroplex has very affordable housing. Brennan goes on to write that, “Four Lone Star cities grace our list [of America’s most affordable cities]: Fort Worth (No. 3), Houston (No. 4), Austin (No. 12), and Dallas (No. 17).” Companies can move to DFW and be confident that their employees will find affordable housing and keep more of their money. Also, the businesses that locate in DFW will find highly skilled employees in a right-to-work state, thereby avoiding much of the labor union tightrope walk. DFW offers the largest number of college educated residents of any metropolitan area in the state and is among the highest in the nation. There is no shortage of educated, technologically-skilled laborers to work the facility. In fact, TechAmerica ranked Texas as the “#2 Cyber-State” in 2008 with 459,000 high-tech workers. However, the same can be said for other sectors of industry as well, as DFW has one of the most diverse economies in the world with between 3% and 22% of the DFW economy’s composition in each of the major industrial sectors.
DFW is blessed with one of the best geographic locations in North America. Geography alone makes the Metroplex attractive to businesses, especially those that cannot afford to be interrupted by Mother Nature. DFW is in the center of the country. It lies equally close to North America’s five largest business centers: New York, Chicago, Los Angeles, Mexico City, & Toronto. Furthermore, it lies in the Central Time Zone, which is only one hour behind the East Coast and two hours ahead of the West Coast. This versatile location allows companies doing business on both coasts to extend the work day. Additionally, there are no hurricanes, no volcanoes, and no earthquakes (big ones at least!). There is no real threat of nuclear fallout in DFW as the nuclear power plants lie South and East of the Metroplex, and the prevailing winds blow down to Houston. Furthermore, it does not snow often (except for the year we hosted the Super Bowl!). About the only troubles North Texans have to worry about weather-wise are tornadoes and the heat, but a good air conditioner can take care of the heat part. Lastly, North Texas is primarily flat and has no shortage of land. It is a developer’s dream canvas. New construction can continue north until the Red River!
Finally, North Texas has phenomenal infrastructure. This sometimes gets overlooked, but it may be the most important factor. It is the infrastructure that allows DFW to be competitive and be everywhere–all the time. DFW is a city built around air travel and inland ports. There are more airports in Texas than in any other state in the country and the state’s busiest airport is DFW International. DFW is one of seven metro areas in the country that have two major passenger airports (DFW International and Love Field). It is also home to one strictly industrial airport (Alliance), as well as several other private facilities. There are also talks of potential commercial service coming to Collin County Regional Airport in McKinney in the near future. Enough about flying, though, as this country needed a railroad to bring the two coasts together, and that railroad industry is crucial to the viability of North Texas. North Texas is fortunate to have two International Intermodals: BNSF in Alliance, north of Fort Worth and Union Pacific, south of Dallas in Wilmer and Hutchins. Both intermodals are “Emerging Inland Ports” to distribute containerized product coming from China. The containers arrive in Long Beach, CA, and, via rail, travel to DFW to be distributed within a 500 mile radius on trucks (the distance a truck can drive in one day). DFW serves as one of the five main distribution hubs in the United States, joined by Los Angeles (Long Beach), Atlanta, New Jersey, and Chicago. Adding to the ease of transportation is the most obvious one, automobiles. Dallas / Fort Worth almost looks like a giant bull’s eye on a map. The US interstate system was originally set up as a military grid map with interstate highways serving as gridlines on the “map.” Odd multiples of five run North / South and increase from the West coast, starting with IH-5 and ending with IH-95 on the East coast. Even multiples of ten run East / West increasing from the South, starting with IH-10 and ending with IH-90 in the North. Of the traditional 19 numbered “gridlines,” DFW has four running right through the middle of the Metroplex: IH-20, IH-30, IH-35, and IH-45. It provides an easy way to get North, South, East, West and everywhere in between. The Texas Department of Transportation (TXDOT) is continually trying to expand the road infrastructure to plan for Texas’ growth and two of the largest public infrastructure projects in the United States are the DFW Connector Project and the LBJ Project. TXDOT is trying to put in roads and plan for the growth, but, even with the best laid plans, it may not be enough.
Clearly the transportation aspect of North Texas is covered, but what about power? What literally fuels North Texas? Texas has its own power grid and is the only state to have an independent grid. Furthermore, the Electric Reliability Council of Texas (ERCOT) is seriously considering expanding the grid. Recently, multiple discoveries of huge natural gas reserves, such as the Barnett shale, have greatly reduced the price of natural gas, and, as a result, electricity prices have plummeted. With the possible implementation of a “carbon tax” or tax on a “carbon footprint”, electricity generated by coal will become extremely expensive and North Texas is poised to take advantage of this. Furthermore, a deregulated electricity market has leveled the playing field for electricity consumers. Compared to the rest of the United States, especially compared to the East and West coasts, North Texans enjoy low electricity rates at approximately $0.0576/kWh for Average Retail Price of Electricity to Ultimate Industrial Customers, compared to a national average of $0.0653/kWh, according to the U.S. Energy Information Administration. It has fallen over the last few years due to our blend. With approximately 80% of the blend coming from natural gas, low natural gas prices have resulted in savings to consumers. Lastly, DFW has great fiber and is a hub of the Fiber Backbone. The city of Richardson, TX, became known as the Telecom Corridor, as it is home to fiber optic trunk lines for AT&T, Verizon, and Sprint that literally run up and down Central Expressway. Furthermore, there are over 40 providers of both lit and dark fiber running into 2323 Bryan Street in downtown Dallas. The connectivity to the backbone reduces latency and only helps to make DFW more competitive.
Geoforce: A DFW Success Story
It is one thing for us to tell you all the great things about North Texas, but it is another thing to have a testimony. Geoforce, one of the fastest growing companies in DFW, a winner of the “Fast Tech” and “Dallas 100” awards, is a client of ours that chose, out of anywhere in the United States, to found the company in DFW. In an interview with Vince Hsieh, CFO, he said, “Almost our entire management team (including our CEO, CFO, VP of Sales) relocated to the area from another state.” The main reasons were, “Our people are our most valuable asset, and the high quality of life, family friendly neighborhoods, and maybe most importantly, affordable cost of living, made it easy to attract talent. Tax policy matters – and things like no personal income tax, cities like Coppell that are willing to work with us on tax abatements, etc. made it easy financially to be here. Central location with a major airport like DFW makes it easy to get to our customers spread throughout the country and the world. A pro-business climate with lots of other technology and/or start-ups in the immediate vicinity makes for a great environment to do what we do. We are 100% oilfield-focused, so being in a state like Texas helps tremendously.”
The pro-business climate and low cost of living, coupled with the geography and in-place infrastructure has helped cement DFW as a destination for companies and employees to move. Everywhere you look, there are out-of-state license plates on our roads. North Texas is alive and well.
Sources: Morgan Brennan, “America’s Most Affordable Cities”, Forbes.com, 4/5/2012, 2/14/2013,