Plano, TX – Dallas Business Journal

Here’s the main reason Toyota is moving from California to Texas

Dallas Business Journal | Bill Hethcock | December 11, 2015

Sure, the low taxes, relaxed regulatory environment and Central Time Zone are nice. But none of those factors tops the list of reasons Toyota decided to plant its North American headquarters in Plano, bringing in more than 3,000 jobs, mostly from California.

The main driver of Toyota’s move from Torrance, California, was housing costs, according to Albert Niemi Jr., dean of the Cox School of Business at Southern Methodist University, who has inside knowledge about the move. Niemi shared the anecdote at an SMU Cox Economic Outlook Panel on Friday morning.

“It wasn’t so much that we don’t tax income,” he said. “It was really about affordable housing. That’s what started the conversation. They had focus groups with their employees. Their people said, ‘We’re willing to move. We just want to live the American Dream.’”

Toyota did the math and found that housing costs in Los Angeles County, where Torrance is located, are three times per square foot the cost of a house in Dallas-Fort Worth.

“They’re paying the same salary,” Niemi said. “So in real terms, they’re going to triple the affordability of housing they can buy if they move to Texas.”

In North Texas, median home prices are three to four times the median income, said Chuck Dannis, real estate adjunct professor at SMU and senior managing director of National Valuation Consultants. In Torrance, Calif., homes cost about seven times the median income.

The median home in Dallas-Fort Worth costs about $210,000, and the median income is roughly $58,000, Dannis said. In Torrance the median home price is $508,000 and the median income is $76,000.

On the bigger-picture housing front, North Texas homebuilders are constructing half the number of homes they were in 2006 through 2008, Dannis said.

Housing costs and availability were among a wide range of topics discussed at the breakfast on the SMU campus. Oil prices made the list as well.

Bruce Bullock, director of the Maguire Energy Institute at SMU Cox, said lower oil prices will prevail next year as OPEC production is expected to remain high. The good news for Texas is that the Permian Basin in West Texas is the “sweet spot” for drilling right now, with the lowest costs and highest returns for oil companies, Bullock said.

The other hopeful note for the energy industry is that companies that do make it through the downturn will be more efficient, which will improve their profit margins, Bullock said. The industry has reduced headcount, lowered capital expenditures, and is positioning for a recovery in the second half of 2016, he said. Bullock characterized the hope for a recovery that soon as “a little bit optimistic.”

“I think we’re looking at another year of low oil prices, somewhere between where we are ($35 a barrel) and $50 a barrel,” he said.

Much will depend on world events, Bullock added. If, for instance, ISIS moves into Saudi Arabia, oil could jump $20 to $25 a barrel overnight, he said.

Real Estate Forum – The Fastest Growing Companies

The Fastest Growing Companies

Real Estate Forum | December 2015

From several dozen entries, Real Estate Forum has compiled its first-ever ranking of the commercial real estate industry’s Fastest-Growing Companies: firms that are outpacing their competition and positioned for success in 2016 and beyond. Twenty-eight companies made the inaugural list, which is segmented into four categories by average annual revenue: Heavy Hitters ($1 billion-plus in average annual revenue), Large Companies ($101 million to $999 million), Mid-Sized Companies ($11 million to $100 million) and Small Companies (up to $10 million). The winners were calculated based on their scores for two fields—revenue growth and headcount growth—over a three-year period. The sum of those scores determined the final ranking of the firm.

Stoneleigh Cos. LLC
Barrington, IL

2014 Revenue: $51,250,358
Three-Year Growth in Revenue: 152.41%
Projected Year-End 2015 Revenue: $55,088,949

Number of Employees in 2014: 19
Three-Year Growth in Number of Employees: 138%
2015 Projected Headcount: 23

Head Executives: Richard Cavenaugh, President/CEO
Marty Eppel, Chief Operating Officer
James O’Kane, Chief Investment Officer
Charles Hall, Senior Vice President-Finance
Primary Business: Owner/Developer
Region of Operation: National
Date of Inception: 2008

Stoneleigh targets acquisition of existing apartment properties and development of new luxury communities in select markets. It operates 3,623 units, is under construction on two new assets comprising 538 units and planning development of 1,041 units in Houston and Chicago. In 2008, Stoneleigh began building a portfolio of income-producing multifamily assets. With acquisition cap rates dipping to decade lows in 2012, the company began focusing on new developments generating greater returns. The Stoneleigh team has tripled within three years, doubled its portfolio and has a pipeline that will bring its to over 5,200 units by 2018.