If a 2020 version of Sergio Leone were to make a movie using our title it would tell the tale of how Texas is becoming the Technology capital of the United States. California’s punitively high state income tax rates and regulations (CA isn’t the only offender), have paved the way for Technology companies – and the Tech ecosystem – to migrate to business-friendly states such as Texas, Tennessee and Florida to name several.
This article focuses on Texas as we have first-hand experience in the state and given recent high-profile wins with companies such as Tesla (Elon Musk, 65 CRScore), Apple (Tim Cook, 54 CRScore) and Amazon (Jeff Bezos, 100 CRScore). The three companies have a combined $3.8 trillion Market Cap.
Texas Is Where The Tech Giants Are Growing Operations
Tesla (TSLA): Tesla purchased approximately 2,100 acres off Highway 130 and Harold Green Road near Austin-Bergstrom International Airport for $97 million in July of this year for its new production facility. The factory will employ approximately 5,000 people with starting wages of $35,000. Travis county and the local school district promised tens of millions in tax incentives to win Tesla’s Cybertruck factory (Tulsa, OK was reportedly the other location under consideration). The $1.1 billion factory will also produce the Model 3 and Model Y vehicles as well as the Tesla Semi.
Apple (AAPL): Apple operates a 244,000 square-foot production facility in Austin that employs more than 500 people (including electrical engineers and electronics assemblers) who build Mac Pros to order. This production facility will be augmented by Apple’s forthcoming $1 billion, 133-acre, 3 million square-foot campus. The new campus – which is expected to open in 2022 – will initially employ 5,000 people with the capacity to house 15,000 employees. Apple currently has approximately 7,000 employees in Austin.
Amazon (AMZN): Where isn’t Amazon acquiring land or real estate for distribution centers large and small as well as corporate office space? The company has single-handedly moved the price of industrial space over the past few years as it works to stitch together the last mile of same day delivery capability. Amazon is expanding its footprint in a number of cities including Boston, MA, Arlington, VA, Atlanta, GA and Austin, TX. Amazon’s new 145,000 square-foot space in Austin will add approximately 1,400 jobs to the 6,600 employees Amazon has in the area.
Needless to say we would be short San Francisco bay-area real estate and long Austin, TX.