Texas is becoming a hot spot for companies to relocate: A new report from CBRE shows that three of the top five markets that gained headquarters between 2018 and 2023 were all in the Lone Star State.
Yahoo Finance’s Rick Newman joins Asking for a Trend to discuss why companies are eyeing Texas and the possibility of a new Dallas-based exchange.
For more expert insights and the latest market action, click here to watch this full episode of Asking for a Trend.
This post was written by Melanie Riehl
Video transcript
One state has caught the attention of several corporate corporations.
Texas has become a hot spot for companies to relocate.
It really has been happening over the last few years here.
And so if you look at this from 2018 to 2023 according to CBRE, they look across the country at the number, at the cities and at the number of corporate headquarters that they were attracting.
Austin was number one here.
We know how popular this has become.
There has been a huge boom in real estate that is now seeing some of the fallout in Dallas as well as Houston.
So the three major cities in Texas, so you see Nashville and Denville, this Denver, that doesn’t necessarily mean that there was a population that followed those headquarters in some cases.
There are only a few executives who are based there in Texas and the rest of the workforce can remain elsewhere.
Still, it’s definitely been a trend here.
The latest news is that there is a Texas stock exchange in the works that is getting major sponsors from companies like Black Rock and Citadel.
So that’s just the latest headline of what’s happening in Texas.
But we wanted to talk more broadly about this mi migration trend from Texas.
Let’s look at Yahoo Finance senior columnist Rick Newman.
And on that, Rick, we thought of you because, you know, there’s kind of a political overlay to all of this as well.
Texas doesn’t charge income tax, right?
It has had a certain political inclination in recent years.
Although they say Austin is kind of an island in that regard.
So it’s been interesting to see this kind of corporate movement, right?
I am not sure.
It’s so surprising, Julie.
Uh, so, uh, Governor Greg Abbott in Texas, he’s similar to Governor Ron Desantis in Florida.
They characterize their states as places where the awakened go to die.
Um, don’t bring your agreed upon policies here.
Our goal is business.
Uh Let’s keep things traditional.
So, you know, when we’re talking about a new stock exchange, I’m going to poll the audience here and ask people, how many stock exchanges do you think there are in the United States?
People might say, well, I’ve heard of the New York Stock Exchange, I’ve heard of the NASDAQ.
So two and in fact, there are 13 stock indexes in the United States.
There’s one in Boston, there’s one in Chicago.
Uh, there are others in different cities.
And uh, I think most of them go back to a time when cities in those areas were more like industrial centers, which they aren’t anymore.
So Texas is obviously a paradise for business.
Obviously, the US energy industry is basically located in Texas, both where the energy comes from in the Permian Basin and all the energy companies based in Houston, for example.
So I guess that makes sense, but it doesn’t mean that big companies will automatically jump from the NYSC or the NASDAQ to some, some less woke.
Hmm, switch.
This is based in Texas.
I mean, that has to be a really good reason.
Ah, financial reasons.
I mean, companies have to protect their fiduciary responsibility to shareholders.
There must be a good financial reason to change scholarships.
I looked this up today.
This is not something I really knew, but NASDAQ has managed to attract some companies from the NYSE and they do this by saying things like, um, you’re going to have, your stocks will have less volatility on our exchange.
Technical matters involving the closing of trading sessions and auctions from the beginning to the end of the day.
And when companies think, well, we think, yes, this will be good for our shareholders.
They can get the job done.
This doesn’t happen very often.
Maybe a Texas Exchange would be able to get some IP OS, in the Texas energy market or other parts of the market there.
Um, but, you know, that could be, uh, that’s not a bad thing and could be beneficial in the future.
Well, it’s interesting, you know, I found it a little surprising to see the reports that Blackrock was one of the companies supporting this, considering that, uh, they were attacked by certain pension funds, for example, in Texas, which the see as theirs, and their past ESG agenda as something agreed upon in quotes.
Right?
And yet they are supporting this exchange.
I, I don’t, I think that, that, that this idea that this is somehow about ESG and DE I and all these multi-letter abbreviations, um, that’s kind of a red herring, because, um, I think that if any company should actually choose an exchange based on something like uh, we just want to be with the ant where the anti-woke people are.
I, I think you, I, I think you’re opening yourself up to shareholder lawsuits if there’s any allegation that they might do this.
Um, it’s financially disadvantageous to be on some startup exchange.
I mean, you know, the NY IC and, and NASDAQ would say, look, we have the deepest markets, we have the most institutional investors on our platforms.
We are where you want to be to serve your shareholders.
And I, I just don’t think AC can say, yes, but we want the anti Woke exchange II, I can, I can see it’s not that popular.
So, uh, if this takes off, I think, I think they would have to argue, for financial reasons, that this would be good for, you know, maybe it’s, you know, the NASDAQ, for example, focus on technology, right?
Even though it has grown beyond technology companies.
Hmm, so maybe a Texas Exchange could focus on energy companies.
I mean, remember when Facebook went public, there was a big battle over which exchange would get the IP O, so maybe we’ll have a big IP OS energy in the future and maybe one of them will say let’s try it with the Texas Exchange because we think they are in our neighborhood and have what we need.
So maybe that’s where this is going, maybe we’ll see, Rick.
Thank you so much for covering this for us.
Appreciate it.
