Two distinctly different commercial real estate markets, the Chicago area and the state of Texas, extended their runs as leading attractions for corporate facility investments in an annual ranking.
Chicago led all metropolitan areas of the country with 582 qualifying real estate relocation and expansion projects in 2024, according to results announced Monday by relocation industry publication Site Selection. It won that category for the 12th consecutive year despite economic challenges faced by the region and state, up from 485 eligible projects in 2023.
The broader Dallas area had 489 qualifying projects, up by 37 from the year earlier, and Houston had 435, an increase of 22, to finish second and third.
Those markets helped lead Texas to the statewide title, known as the Governor’s Cup, for the 13th year. Texas had 1,368 qualifying projects, an increase of 114. That easily topped second-place Illinois’ 664, which was 112 projects more than in 2023. Ohio was third with 565, up by 103, and California was fourth with 323, a decrease of 52 projects.
The competition includes only deals that meet certain parameters — private-sector investments that involve an investment of at least $1 million, the creation of at least 20 new jobs or an expansion by at least 20,000 square feet of space — but the competition provides bragging rights and a potential edge for cities, regions and states competing for jobs.
Site Selection, a magazine published by Georgia-based Conway Data, says it has 41,000 subscribers who are involved in corporate relocation and expansion decisions.
Chicago’s continued strong performance may seem counterintuitive when considering fiscal challenges of the area and the entire state, including from underfunded pension obligations.
The Chicago area in recent years has sustained the loss of high-profile headquarters including Caterpillar, Boeing and Citadel.
Yet sectors such as logistics data storage have thrived, in some cases even filling or replacing former corporate space. Chicago’s Fulton Market, a former meatpacking district, continues to attract office, residential, hotel and retail investments, even as parts of the Loop business district just to the east struggle to fill large vacancies.
“The Chicago region’s competitive advantages continue to include logistics infrastructure, a highly skilled and diverse workforce, strong legacy and emerging industries, and world-renowned academic and research and innovation institutions,” Adam Bruns, editor-in-chief of Site Selection magazine, said in a statement via World Business Chicago. “One underlying reason behind Chicagoland’s perennial strong performance in our Top Metros rankings: how Daniel Burnham’s original plan and vision continue to resonate through generations of business locations, architecture and infrastructure.”
In all, new entrants to Chicago and expansions of existing companies added 14,800 jobs to the economy and more than 12.6 million square feet of occupied real estate, according to World Business Chicago.
Texas ‘home runs’
Texas' ranking is no surprise, said Susan Arledge, a senior managing director in Newmark's Dallas office who specializes in national site selection work.
"Some of these projects are more critical than others," Arledge told CoStar News. "The New York Stock Exchange's move from Chicago to Dallas is a huge win, and Fisher Investments moving its headquarters from Washington to Texas is also a big deal. Texas keeps hitting a lot of home runs."
Houston has attracted big relocations, including Chevron and Hewlett Packard Enterprise, due to the city's concentration of employees in the energy industry and its tech focus. Likewise, Dallas has landed some major financial services firms, including Goldman Sachs and Wells Fargo, which are both developing major office hubs in the area that has become known as "Y'all Street," by those in the community.
"When a company is looking at a relocation, the first thing they look at is a way to reduce their operational costs, but the next thing they look at is where they can find the labor they need," Arledge told CoStar News. "In countrywide searches, if you look at the concentration of where software developers, engineers and other high-quality employees are located, Texas, and Dallas, in particular, come up high on the workforce comparisons."
Major Chicago projects
Chicago last year was boosted by a few massive, potentially transformational projects, along with many smaller ones. One of those emerged from a nascent industry: quantum computing.
Last year, plans for the Illinois Quantum and Microelectronics Park were announced for a more than 400-acre former U.S. Steel plant site on the south lakefront. The project is backed by Illinois and federal agencies including the U.S. Department of Defense, with PsiQuantum and IBM signed on as tenants.
Palo Alto, California-based PsiQuantum said it will use the facility to try to create the first useful, error-corrected quantum computer.
The developers of the campus are Chicago-based firms Related Midwest, which is part of New York-based Related Cos., and CRG, the development arm of construction firm Clayco.
Other major projects announced or launched in 2024 included the redevelopment of the former state-owned James R. Thompson Center in Chicago’s Loop business district, the glassy, Helmut Jahn-designed building that Google is set to buy and occupy, and the 1901 Project around the United Center arena on the Near West Side.
That $7 billion mixed-use project was announced by the Reinsdorf and Wirtz families, who own the NBA’s Chicago Bulls and the NHL’s Chicago Blackhawks, respectively, as well as the arena the teams share. They plan to build multiple phases on a sea of parking lots around the arena, creating a music hall, park space, 9,463 residential units and 1,309 hotel rooms, restaurants and other space.
Site Selection’s Governor’s Cup pick for most projects per capita was South Dakota, which won for the second year in a row with 55, up from 40 the previous year. Illinois was second per capita, followed by Ohio.
The Dayton area of Ohio topped areas with populations between 200,000 and 1 million; the Sioux Falls area of South Dakota led areas of 50,000 to 200,000 people; and Findlay, Ohio, was No. 1 for populations of 10,000 to 50,000.