When a business owner wants to relocate, the task can seem daunting. However, by exploring some key considerations, you can prioritize the move and find a location that works well for your present company and your future growth.
One such location — Irving, Texas — is in the Dallas-Fort Worth Metroplex. Irving has more than 8,500 businesses that are already operating in the region, including the headquarters of five Fortune 500 companies.
“You need a value-driven proposition,” says Carter Holston, general manager of Real Estate NEC Corporation of America. “You have to have a good location. You have to have a great office space. You have to have access to your employees and pay the right amount of tax, both school and other. All that goes into the mix when you make the decision.”
Smart Business spoke with Holston about what employers need to consider for relocation and why the Greater Irving-Las Colinas area fits that bill.
If a business is thinking of relocating to a new city, what does it need to take into consideration and how does that relate to the Irving area?
There are three components that any company needs to consider:
- The work force
- How you access the work force, the accessibility to the region, and how you move about via the roadways and mass transit
- The business-friendly environment
Irving is in the center of the Dallas-Fort Worth Metroplex, so access to an available work force is not a problem. The area is adjacent to a major airport — the Dallas/Fort Worth International Airport — allowing you to get your people in and out of the city in an easy and efficient manner.
The Irving area also has accessibility from the standpoint of mass transit, which is a game changer in business today. The new work force is more mobile and prefers living, working and playing in the same area instead of driving long distances to and from work.
Then there’s the business-friendly environment, which is probably one of the most important factors. Companies need to be in cities that believe in business, that understand the revenue they derive from taxes and what it means to have their citizens employed.
What’s the current state of the commercial real estate market in the Irving area?
Commercial real estate for Irving is on the rise, generally, and Texas, itself, is a good market for companies and corporations to consider relocating to.
Irving has more than 30 million square feet of commercial office space and is the third-largest submarket in the Dallas-Fort Worth Metroplex. Typically, there is about a 20 percent vacancy rate, but that has been as high as 25 percent, so Irving is a value-driven market.
With 30 million square feet, there are some large blocks of space that are available at affordable rates. Most companies seem to be taken aback at the leasing rates in Dallas compared to other regions.
Irving also has another game changer that just opened in July — a light rail system that runs through the central urban center. That mass transit will affect commercial real estate in a positive way in Irving.
What else makes the North Texas region so attractive?
Texas, in general, and the Dallas region, in particular, are ‘can do’ regions. There’s really no reason for Dallas to be on the map. There’s no geographic reason for Dallas to exist, no great river system. However, the people who settled here on the prairie a long time ago made it work, and that theme and attitude have carried through the years. Even when the oil business was not good, Dallas found a way to diversify and found other industries to attract, such as technology, oil and gas, banking and insurance. Just about every sector of the economy is represented in North Texas, and the Dallas area specifically.
This ‘can do’ attitude holds true for the area’s longevity and its future, which is based on finding a way to get things done.
How can an employer find things such as tax breaks and incentives when moving into a new area?
First, look at what is important to you. There are a variety of tools that each region and city has to offer. The tax breaks, in and of themselves, shouldn’t make the decision for you. The decision to relocate should be based on where you can get a fair deal — where the value deal is found.
That said, for new construction, there are many incentives available, varying greatly by city. You should have a good broker representing you who has access to incentives and knows what has been granted in the past. You should be represented well and compare with past incentives, but don’t let incentives be the only thing that makes up your mind.
The Greater Irving-Las Colinas area is certainly very affordable with available space and incentives, but it’s also a great product in a business-friendly area.
Carter Holston is general manager of Real Estate NEC Corporation of America, where he oversees all domestic commercial real estate functions and is responsible for more than 1 million square feet of leased and owned facilities. In addition, Holston serves as a consultant to the Irving Economic Development Partnership at the Greater Irving-Las Colinas Chamber of Commerce. Reach him at (214) 262-2190 or email@example.com.
Visit the Greater Irving-Las Colinas Chamber of Commerce at www.irvingchamber.com.
Insights Economic Development is brought to you by Greater Irving-Las Colinas Chamber of Commerce
When Steve Jones, founder of Homeland HealthCare, was looking for a new home for his rapidly expanding business, he considered many locations around the Dallas/Fort Worth Metroplex.
But although other cities made generous offers to attract the business – a national third-party administrator and managing general agency that specializes in servicing a variety of health and wellness products -- it was Allen, Texas, that easily won the day, says Jones.
“The Allen Economic Development Corporation was very aggressive,” says Jones. “In 2009, we were still at our previous location but we were growing so quickly, we needed a new space. Our previous city wanted us to stay at that location, and two others offered us incentives to move to their cities, but Allen beat them all. They were really aggressive, they offered a lot more, they took the time to come over and meet us and learn about our business, and they were a lot more interested in having us than anyone else.”
Smart Business spoke with Jones about his decision to move his company to Allen and why the city is such a great location for doing business.
What played into your decision to move Homeland HealthCare to a new location?
Although the company was founded in 1997, it wasn’t until 2001 that we started offering discount vision, dental, prescription and medical benefits through employer groups. Then people started asking for more. We had never done major medical, nor did we want to get into it, but we came across a fixed indemnity product that was gaining a lot of acceptance in the marketplace, especially for those who didn’t have major medical available from their employer.
That precipitated our growth until, by 2009, we had a combined 14,000 square feet and 57 employees. As we continued to grow, it was time to find a new location to accommodate that growth.
How did you settle on Allen as the new location for your business?
Once we had outgrown our space, we had a tenant representative go out into the marketplace and give us some options. There was a lot of space and a lot of empty buildings available to us at that time. We looked at locations in several cities but found a really great location in the Watter’s Creek Development in Allen. The development is a multiuse real estate plan that has apartments, retail, restaurants and offices and that looks like a little town. It’s a really great concept, with lots of cool places to eat and lots of retail complexes.
From an employer standpoint, my employees would have places to eat, they would have places to shop and they would have places to live if they wanted to be in this area. And we have covered parking. You’d never have to leave.
Other spots that we looked at just had a building and it was the same dollars for this as compared to buildings on the Dallas Tollway, where there’s no place to eat, no place to shop, there’s nothing. And there was no covered parking. You would walk outside and get into your steaming hot car. It would have been horrible.
It wasn’t a difficult decision to make. As an employer, I need to look for reasons for people to want to come to work at my business, other than just pay and benefits, and it being a great place to work. Our location gives us an advantage in attracting the best employees, I believe.
Since we moved here, our growth has been extraordinary. We built 23,000 square feet initially in 2009, and knowing that our growth was off the charts, since then we’ve built out another 7,000 feet, to reach 30,000 square feet. And in three years in this space, the number of employees has increased from 57 to 160.
What advice would you give to other business owners considering moving their companies to Allen?
If you are considering a move, meet with the people at the Allen Economic Development Corporation and give them an opportunity to show you what Allen has to offer. There is a really good work force around here, a very educated, hardworking work force for companies to draw on, housing is very affordable and the schools are excellent.
I would have no reservations about recommending the people at Allen Economic. They are very easy to work with and they are pretty aggressive. They’re very good at communicating with you, getting you involved in the community and, from an incentive standpoint, they beat everyone else when we were looking at a move. And they are very easy to work with.
There’s a lot of competition for business in the Metroplex, and Allen competes very well. It doesn’t have a big name like some of the other cities in the area, but given the opportunity, I think that any company would be very pleased dealing with the people in Allen. I certainly know that we have been.
Steve Jones is founder of Homeland HealthCare. Reach him at (214) 871-2118 or firstname.lastname@example.org. Reach the Allen Economic Development Corporation at (972) 727-0250 or www.allentx.com.
With a plethora of real estate signs posted around town, it may seem like a simple task to go out and find a new location for your business.
But it’s not that easy. And businesses that do not start planning 12 to 18 months out may find themselves forced into an unsuitable space or paying more than they would have if they had planned ahead, says George J. Pofok, CCIM, SIOR, senior vice president of CRESCO Real Estate.
“Very often, businesses wait until the last minute to start looking because they are focused on growing the business and real estate falls into that, ‘We’ll get to it when we get to it’ category,” says Pofok.
Smart Business spoke with Pofok about how early planning can increase your odds of a successful business move.
How early should a business start thinking about a new location when considering a move?
If you’re in a lease situation, you want to start looking 12 to 18 months ahead of the expiration of your lease agreement. Part of that depends on the size and type of company; larger companies and specialty niche type companies typically need to be even further ahead, and if you are a smaller manufacturer or office user that occupies 3,000 to 5,000 square feet, you can probably get away with nine to 12 months.
The process may take even longer for new construction, which will involve land acquisition, building design and multiple layers of financing, as well as dealing with the state, county and municipality about building permits, economic incentive and low interest loans. Because you’re dealing with government entities, things tend to progress more slowly than they would in private enterprise.
What should a business be looking for in a new location?
You need to have projections on where you see the growth of the company, both in terms of sales and in where your industry is heading. I would also encourage you to talk with your employees and see how their current space functions, because oftentimes, managers are not in tune with the product flow or distribution flow. For example, in the distribution sector, the people who are driving the tow motors and delivery vehicles on a daily basis may be able to offer valuable suggestions on how to set up your warehouse and eliminate some of the redundancies and improve company logistics.
What do you need to consider regarding location?
As you’re looking at moving, you need to take into account your employees and where they live. Are you currently centrally located? Are you drawing a mix of people from the east side and the west side? Companies are often concerned that if they move from the east side to the west side that they are going to lose valuable employees who live on the east side.
You also want to look at the location of your customer base. If you are a warehouse distribution company, where are you sending your products? You want to be as close as possible to a prominent freeway so that you can eliminate the downtime of your drivers going to and from your building to the freeway. If you are looking at a location that is 20 minutes from the nearest freeway, you have 20 minutes to your building and 20 minutes back, leaving your drivers to spend valuable time just commuting to the freeway.
And if your drivers are earning $20 to $25 an hour, adding that up on a daily basis can contribute significantly to your bottom line.
How can starting the search early help your negotiating power?
If you wait too long, you can be forced into a making a bad decision. It hurts your leverage and negotiating power with an owner or landlord. This typically happens when a company’s lease is expiring or already has expired, and has waited too long to start its search.
If a landlord knows that you need to make a decision, they can stick to their numbers because they know you need to make a move and make a decision now. But if you’re planning things out, you can negotiate and lay out your needs a little better, and focus more on finding a location that is really geared toward what you need in your business.
How can an outside expert assist you?
Searching for a new location requires a combination of internal and external expertise. Nobody knows your business better than you, so it is imperative for you to gather information to provide an internal perspective and share that information with the external service provider. This is a team effort. Making the right real estate move will help the future direction of the company.
The external provider should ask the right questions to help pinpoint your needs. Are you currently feeling any pain? Is there something in your current space that doesn’t work for you? For example, are you currently in a 14-foot clear building that prohibits you from keeping additional inventory on hand because you don’t have the space? If you move to an 18-foot clear building, can you rack higher and have additional inventory on hand so that your customers don’t have to potentially wait for a delivery?
It’s really the job of the service provider to set and manage expectations. For example, a business may have a 40,000-square-foot building, however, it has low ceilings and multiple demising walls separating the manufacturing or warehouse area. Today, this is typically an inefficient way to operate. Many companies still have it in their minds that they occupy 40,000 square feet and that is what they need. But when the external provider takes them into market and shows them a wide-open 40,000 square foot space, it makes them rethink whether they actually need that much space. It is critical to consider all the efficiencies and inefficiencies of a building.
George J. Pofok, CCIM, SIOR, is senior vice president of CRESCO Real Estate. Reach him at email@example.com or (216) 525-1469.