Move your HQ to the South. . .everyone else is

By Michael Randle, Editor

Citing housing costs for their employees, operational costs for the company itself and a lack of labor, companies are high-tailing it to the South from California, the Northeast and the Midwest. It's nothing new, it's been going on for decades, but never as prevalent as today.

And we're not talking about opening operation centers and other satellite facilities in the region. Many of these companies are moving their whole kit and caboodle — their global or North American headquarters — to the American South. South Florida, Northern Virginia, Atlanta, Nashville, Austin, Raleigh and Charlotte are where most of them are relocating their headquarters. But the most successful headquarter relocation market is in Texas, especially Dallas-Fort Worth and the many cities that make up that market such as Irving-Las Colinas, Plano, Richardson, Frisco and McKinney.

Here are some of the headquarter relocations to the South announced just in the fall 2018 quarter. . .some are relocations from within the South: McKesson (San Francisco to Las Colinas, Texas); Norfolk Southern (Virginia to Atlanta); Honeywell (New Jersey to Charlotte); RoundPoint Mortgage (Charlotte to Fort Mill, S.C.); Mimeo (New Jersey to Memphis); Dollar Tree (Matthews, N.C., to Chesapeake, Va.); and PGA of America (Palm Beach Gardens to Frisco, Texas). Again, those relocations were announced in just the fall 2018 quarter. And that doesn't count the new Amazon HQ2 that went to Arlington County, Va., that was also announced in the fall.

There have been so many companies that have relocated their headquarters to the South in the last three decades that it seems unfair to list just a few. But the highest profile headquarters relocation in the last few years was Toyota's move from Southern California to Plano, Texas. Toyota cited incredibly high housing costs for its employees when it announced in April 2014 that it was relocating its U.S. headquarters to Texas.

The average price of a home was over $725,000 where Toyota was operating its largest North American headquarters in Southern California. In Plano, the average home costs around $325,000. Toyota relocated about 3,000 people from California and added another 1,200 workers at its new headquarters in Plano, which has been operational since May of 2017.

Toyota followed fellow Japanese automaker Nissan, which announced the relocation of its North American headquarters from Southern California to Franklin, Tenn., a Nashville suburb, in 2005. Thousands of people work at Nissan's headquarters near Nashville, as well as the Japanese automaker's largest North American plant in nearby Smyrna, Tenn.

Why have Toyota and Nissan relocated their headquarters to the South? It's the same reason so many companies have migrated to the South over the last seven decades; lower operational costs, and even more important for the employer, the cost of living for its employees. Simply put, the two automakers' employees could not afford to live close to their company's headquarters in the Southern California region. Now employees of Toyota and Nissan can purchase a home at their new locations and a vacation home for about the same money as their California homes.