North Texas has quickly become a hub for tech companies and startups, with new companies popping up or moving from denser areas like the Bay Area. And beyond driving growth and innovation, tech companies are starting to make an impact in the commercial real estate market as well.
Research from commercial real estate firm Cushman & Wakefield, shines light on the impact tech companies are having on the ecosystem, as well as some of the things drawing companies to the North Texas region.
“It’s been very healthy activity and shows no sign of slowing up,” Cribb Altman, Cushman & Wakefield senior director told the Dallas Morning News. “It’s been pretty substantial when you look at migration.”
According to the report, a number of companies have been leaving California to relocate to other metro areas. Since 2010, tech companies from the San Francisco area have taken up nearly 1 million square-feet of office space in North Texas alone, and more than 30 million square-feet of office space across the United States, according to the report.
In total, tech companies make up about 5.8 percent of employment in Dallas and represent about 6.9 percent of office space in Dallas. However, the report noted that one of the most attractive areas in the region is in the Northern suburbs of Plano and Frisco, specifically in the area along the Dallas North Tollway, between Legacy West and The Star Frisco. In all, 76 percent of the space in markets outside of California is made up by IT companies, the report said.
Other cities in the region are taking note. For example, Allen just announced it would be moving forward with a 261-acre mixed use development project, which is planned to include 10 million square-feet of office space.
“In Dallas, there has been a flight to class-A buildings with attractive amenities, as this helps with recruitment and retention,” Altman told Globest.com.
North Texas has always been known for its business-friendly environment. When Dallas was vying to land Amazon’s HQ2 last year, the city offered an incentive package worth about $600 million. Plano’s incentive package to land Toyota’s North American Headquarters was worth about $6.75 million.
However, it is not just incentive packages bringing companies to the area. In addition to relatively low tax rates, North Texas is also home to a number of Fortune 500 companies, which help to attract smaller businesses, but it is also home to several universities producing an educated workforce.
“The best way to look at a healthy ecosystem is as a rainforest and not a prairie, not a monoculture, because being a rainforest, if one thing happens to one branch of the tree something else can take its place, and DFW is definitely that,” said Paul Nichols, executive director of UT-Dallas’ Institute for Innovation and Entrepreneurship. “In Texas, it’s like, ‘welcome to Texas, let’s do something together,’ and it really does permeate the culture in the business world and that’s gratifying to see, but it’s also necessary, especially as we’re entering an era where you can’t just focus on one part of the economy or one technology.”
Another thing the report noted as a draw to any region was the type of offices and workspaces available to employees. According to the Pew Research Center Millennials make up the largest segment of the workforce, and are set to make up more than 50 percent of the total workforce by around 2020. Class-A buildings are a large draw, according to the report, but so too are so-working space and open offices that allow for more flexibility and collaboration. Dallas alone has more than 40 co-working spaces.
