After years of striving to be known as a global city, Dallas has arrived. Its international airport, renowned Arts District, and other factors have compelled numerous foreign companies to base their North American headquarters here.
And they’re not alone. Since 2010, 70 companies—including about 30 from California—have moved their headquarters to the Dallas area, says Mike Rosa, senior vice president of economic development at the Dallas Regional Chamber.
One of the most anticipated relocations is Toyota Motor North America, which is building a 2 million-square-foot campus in the Legacy West development in Plano. The Japanese automaker is relocating its U.S. base from Torrance, California, and plans to employ 4,000 in Plano by 2017.
John Stich has served as Dallas’ honorary consul-general of Japan for 11 years, and he has noticed a significant uptick in Japanese companies’ interest in North Texas, particularly since Toyota’s announcement in 2014. “Toyota is well respected around the world as a strategic company who thinks before they do things,” he says. “Companies are taking a look and asking why Toyota is going from California to North Texas.”
Stich says more than 150 Japanese companies have operations here, including NEC, Fujitsu Network Communications, ORIX USA, Trend Micro Inc., and a newer entrant, Kubota Tractor Corp.
In May, California-based Kubota announced it was moving its North American headquarters to a $50 million campus in Grapevine, where it’s expected to employ more than 400 workers. CBRE brokers Steve Berger and Ann Huntington represented Kubota in their quest for space, which includes a 125,000-square-foot office building and a 68,000-square-foot research and development facility.
“They were focused on keeping their leadership and professional staff close to the major markets they serve, and close to their manufacturing and distribution facilities in Georgia and Kansas,” says Berger, first vice president at CBRE. “They wanted to be more centrally located to respond quickly to industry and changing markets, and Dallas-Fort Worth placed them in a better place to do that.”
Narrowing down the right North Texas city took about a year, and Berger and Huntington credit the Dallas Regional Chamber, which hosted meetings where Kubota could become more familiar with various communities. “The fact that we have a chamber that provides a level playing field where all the communities in the area can participate was very helpful,” Berger says. “The combined effort makes the area look coordinated and was very effective.”
International Airport a Priority
Ultimately, proximity to Dallas Fort Worth International Airport and access to a skilled labor force were key factors in Kubota’s site selection, says Huntington, senior vice president at CBRE.
Stich notes the airport’s 18 nonstop flights a week between DFW and Tokyo Narita International Airport are a huge draw for Japanese companies. In September, the two airports announced a partnership to foster close relations and share best practices, allowing for opportunities to “promote increased trade and tourism” between the Dallas region and Japan.
As CEO of DFW Airport, Sean Donohue is focused on making the airport one of the best in the world, another compelling lure for global companies looking to make their North American home here. Over the last four years, DFW Airport has been one of the fastest-growing airports in the international sector. During that period, it has added 29 new international routes, which include 22 new international cities and 11 new airlines, Donohue says. And there’s more coming. “We expect some more announcements in terms of international service over the next several months,” he says.
According to Donohue, long-haul international flights such as Tokyo, Shanghai, Sydney, and Hong Kong generate $150 million to $200 million a year each in economic activity.
A great airport was high on John Rauscher’s list when deciding where to locate his artificial intelligence software company, Yseop Inc. The Frenchman considered Chicago, Boston, New York, and the Silicon Valley before meeting with then-Dallas mayor Tom Leppert on a trade mission trip to Paris. After meeting for dinner, Rauscher was convinced. “My No. 1 priority as the CEO of a global company is direct flights to the most important cities of the world,” he says, noting good weather, a central time zone, the Dallas International School, and a welcoming city ready to assist in the transition were other factors.
As executive vice president of French American Chamber of Commerce in Dallas, Rauscher is actively promoting the Dallas region to prospective companies. “Dallas is one of best choices to make when you come from Europe,” he says.
Ready for New Business
Texas is a leading global destination for foreign direct investment, with Dallas-Fort Worth capturing 24 percent of new businesses between 2009 and 2013, according to a Texas Wide Open for Business report.
KONE, a global elevator and escalator company based in Finland, is centralizing sourcing, engineering, and testing in Allen with the addition of a light manufacturing facility to its operations in North America. Its new 169,000-square-foot facility, which will occupy about a quarter of the 700,000-square-foot AllenPlace office park, is expected to employ 80 and open in the first half of 2016. “Allen’s centralized location and proximity to both U.S. and Canadian suppliers and customers made it a perfect location,” says Ron Bagwill, vice president of supply operations for KONE Americas.
Swedish telecom firm Ericsson employs about 4,000 at its Plano campus, compared to the 1,100 employees when it opened in 2001. It expanded its North American headquarters in 2013, adding 273,360 square feet of office space. Officials have said the business-friendly climate and access to skilled workers were factors in locating to Plano.
The Dallas area also is home to a number of the top Mexican companies with U.S. operations, including milk processor Grupo Lala; Gruma, owner of Mission Foods Inc.; and Interceramic, a manufacturer and distributor of ceramic tile and natural stone.
Interceramic USA opened its first U.S. base in Carrollton in the early 1980s, and moved to its current location in Garland, which includes corporate offices, a distribution center, and manufacturing facility, in 1994. The company employs 370 here, and operates 13 company-owned Interceramic Tile and Stone stores in three states. It plans to relocate its Forest Lane store location to 50,000 square feet at Mercer Business Park in North Dallas in the second quarter of 2016.
“People from all over the world look at Texas as a healthy economy and they look at Dallas as an ideal, centrally located destination where you can gain a foothold and entry into this market with international connections, access, and easy entry growth potential, which is much higher than other possibly competing areas,” says Humberto Maese, the company’s president of U.S. operations.
A central location is key for access to major markets across the country, and for proximity to its operations in Chihuahua, Mexico. But access to quality suppliers and professional service providers in the legal, banking, and insurance industries is also a big plus that Maese regularly shares with executives considering locating in the Dallas region. “Anything an international company would require to operate, you can find it here,” he says.
The number of relocations is expected to rise as the Dallas Regional Chamber steps up its recruitment efforts in 2016. Companies in locations where DFW Airport offers direct international flights will be one focal point since North Texas has much to offer in a business-friendly environment. “There are companies around the world looking at ways to do better with greater efficiencies,” Rosa says. “The critical mass and size that we have, combined with the business-friendly and cost-friendly environment, makes our message very powerful.”