As Plano anticipates the completion of mixed-use developments like Legacy West and the jobs that come with them, real estate experts believe corporate relocations are creating a diverse economy that, with the help of lower costs of living and supportive infrastructure, could usher Collin County into international standing.
Texas is emerging as a global leader because of its centralized location as well as its expansive business economy and robust real estate market, said Joseph Cahoon, director of the Folsom Institute for Real Estate in the Cox School of Business at Southern Methodist University. The introduction of mixed-use developments is the vehicle by which larger corporations are becoming part of Collin County’s landscape, he said, and this type of urbanization attracts companies, workforces, millennials and families alike.
“We will always have market risks, but I would say there will be less volatility with this new type of growth and industry,” Cahoon said. “North Texas has become much more diverse than it was 20 years ago and a huge benefit to [any] economy is diversification. Now we have these urban nodes around North Texas and mixed-use [development] is changing the map.”
In North Texas, he said relocations by companies like Toyota Motor North America, FedEx Office and Print Services and State Farm Insurance are changing the suburban landscape in a way that will strengthen them for years to come. Reputable schools and the expansion of the Sam Rayburn and the Dallas North tollways have also contributed to Collin County’s ability to attract global businesses, Cahoon said.
“Back in the ’80s and ’90s, most Fortune 500 companies were in places like Irving and Las Colinas because it was accessible to [Dallas-Fort Worth International] Airport,” he said. “Now, you can get from Plano to the DFW Airport in a very short amount of time. Accessibility to North Texas is exceptional to the rest of the world.”
Toyota Motor North America, Inc. is one such company that will soon call one of Plano’s new developments home. For the past year, its employees have been researching North Texas and weighing their options before accepting the offer to move from Toyota’s branches in California, Kentucky and Washington, D.C. In addition to the 4,000 employees expected to work at the new Plano campus, Toyota will be home to approximately 1,000 contractors and affiliated partners, spokesperson Aaron Fowles said.
The 100-acre, 1-million-square-foot headquarters in Legacy West is expected to be complete sometime in the first quarter of 2017, Fowles said.
“We needed to look at where we are in terms of the relation and distance to our suppliers,” he said. “Plano just so happens to be one of those places.”
Although some experts wonder how long the rapid growth will last, the housing market will likely level off at some point, said Steve Haid, chief operating officer for the Collin County Association of Realtors. “There is no immediate sign of interest rates rising, and there are plenty of buyers out there,” he said. “Our biggest limitation at the moment is the low supply of available homes relative to demand.”
The global attraction to Texas can be seen in its housing market, as international homebuyers contributed $8.32 billion to the Texas economy from April 2014 to March 2015, according to a report by the Texas Association of Realtors.“With more international homebuyers in Texas now originating from China, Europe and Africa than Latin America and Mexico, Texas truly has a global reputation as a great place to live, work and raise a family,” said Scott Kessner, chairman of the Texas Association of Realtors.
Effects on housing
For those relocating to North Texas from other states like California or larger metropolitan areas, the move oftentimes can also equate to cost savings given the lower cost of living, Cahoon said.
Others who have called this area home over the past decade, however, might be experiencing something a little different. According to the Collin County Association of Realtors, median home sale prices for existing homes in Collin County increased by 8.8 percent in July, compared to the 5.6 percent national average increase that month.
However, home prices in Collin County are still considered affordable compared to areas on the West Coast, throughout Florida and in parts of the northeast, Haid said. No state or city income tax also plays a factor in Texas’ affordability.
“We have a diversity of home sizes and styles ranging from starter homes to mansions,” Haid said. “We have nearby shopping, dining, sports franchises and the arts. Our climate is pretty pleasant most of the time and it’s just a great place to live.”
Toyota’s long-term plan to consolidate its sales, financial services, manufacturing and corporate divisions at one campus in Plano was made with intentions to grow alongside Plano and its neighboring cities over the next 50 years, Fowles said.
“Our CEO, Jim Lenz, said he wanted to bring the company to an environment that would provide high education and opportunities for employees to have a good work-life balance,” Fowles said. “We’re making a new organization out of what we’ve had in the past.”
While economic, political and global conditions have the potential to affect the local real estate market, Cahoon said careful planning will contribute greatly to Plano’s sustainability. The million dollar question, Cahoon said, is, ‘Will North Texas continue to grow? According him it will.
“Will [North Texas] grow at the pace it has been growing for the past five years? Likely not. But … we are poised to capture more than our fair share of corporate relocations, which will continue that growth,” Cahoon said.