Texas continues to be a hotbed for corporate relocations — last year, 62 corporations moved their headquarters to the Lone Star State. According to Canyon Partners co-CEO and co-founder Josh Friedman, the healthy business environment is what is spurring companies to make the move.
“Texas is a very friendly place for businesses,” Friedman said in an interview with Yahoo Finance Editor-in-Chief Andy Serwer as part of Influencers with Andy Serwer. “If you look at firms like Goldman Sachs (GS) and others, Goldman is moving literally thousands of employees there. I think sometimes a change of venue or an additional venue injects an element of excitement and growth into a firm.”
Friedman also noted the benefits Texas offers to employees and other individuals choosing to relocate.
“And I think for our younger employees, they are enjoying a much lower cost of living. Almost everyone has bought a home. And those homes have all appreciated because of [the way the] environment is toward business,” he added. “Their commute to work is short. The cost of gas is relatively lower. They have a variety of educational alternatives from public schools to private schools, all of them at or lower in cost substantially than [in] California.”
In this episode of Influencers, Friedman sat down with Serwer at the Milken Conference in Los Angeles to discuss the debt market, inflation worries, and the reason Canyon Partners moved its headquarters to Texas. Canyon Partners LLC is an employee-owned hedge fund founded by Friedman and Mitchell Julis in 1990 with offices in Dallas, Los Angeles, New York, London, Hong Kong, Seoul, Tokyo, and Shanghai.
Tech giants like Tesla (TSLA) and Apple (AAPL) have also famously set up shop in Texas. Tesla’s Gigafactory Texas now serves as its global headquarters and is slated to become the manufacturing hub for the highly anticipated Cybertruck, while Apple has a $1 billion campus in northwest Austin in the works.
Texas appears to be particularly attractive for companies and individuals looking to move out of California. Silicon Valley companies especially are beginning to flee high housing costs, high taxes, and a strict regulatory environment in favor of the lower costs of living and friendlier tax laws offered by Texas.
For companies on the East Coast, Florida is a popular relocation destination for similar reasons that Texas is favored by western companies. Florida added more tech companies in 2021 than any other state for a total of 2,715 tech businesses. However, Friedman believes that Texas still reigns supreme in terms of cost of living when compared to the Sunshine State.
“California, in many respects, [is] like Miami, Florida,” he said. “While Miami has a lower tax regime than California, it does have a lot of the complexities of a high cost of living and a high cost of housing and a lot of those urbanization issues that aren't quite so prevalent in Dallas.”
Thomas Hum is a writer at Yahoo Finance. Follow him on Twitter @thomashumTV