Austin, Texas, has become a magnet for companies moving their headquarters from other cities or states, with an estimated 70 businesses relocating to the Lone Star state's capital city between 2018 and 2023. Now some heads are turning as one of those companies might up and leave.

Oracle Corp., the tech company that relocated its world headquarters from California’s Silicon Valley to Austin in 2020, is exploring moving its global base to Tennessee's state capital city, Nashville, according to Oracle Executive Chairman Larry Ellison.

The potential relocation could result in a transfer of employees from Texas to a state that's also a growing office hub for global companies, such as TiKTok, a tech firm with a China-based parent that recently formalized its plan to establish a permanent hub in Nashville, Tennessee, with one of that city's largest office deals in the past decade. Still, the possible Oracle relocation doesn't mean Austin is losing its allure, according to Central Texas brokerages.

Some local brokers point to a study by the world's biggest real estate brokerage, CBRE, published in December 2023 that said Austin topped its list of cities attracting the moves of corporate headquarters heading into 2024. Nashville, by comparison, placed fourth, behind second-place Dallas and third-place Houston.

"There’s no evidence of a broader exodus of Central Texas headquarters users,” said Alex Taghi, an occupier services lead with Franklin Street.

Still, the move highlights competition between the two cities, according to Shravan Parsi, the founder and CEO of commercial real estate company American Ventures in Austin.

"If Oracle moves its headquarters to Nashville instead of Austin, Austin might miss out on some of the economic benefits such as job creation and increased tax revenues," Parsi said. "I've always felt that Austin and Nashville are sister cities, with Austin generally having the upper hand. However, this move by Oracle to Nashville will intensify the competition."

Oracle did not respond to a request to comment from CoStar News. Ellison, co-founder and chief technology officer of Oracle, announced the company is looking at the relocation during a conversation at a healthcare industry conference Tuesday with Bill Frist, who represented Tennessee in the U.S. Senate from 1995 to 2007, that was posted on Oracle's YouTube channel.

“First and maybe foremost, Nashville is already a health center. We’re moving the huge campus, which will ultimately be our world headquarters...to Nashville,” Ellison said. “We want to be in a health center, we want to be part of a community where our people want to live. Nashville is a fabulous place to live.”

Oracle has been prioritizing health care as part of its technology business lines in recent years, and paid $28 billion for medical software giant Cerner in 2022 as part of these efforts.

Ellison did not disclose any relocation timeline, but said Oracle would build its new hub on riverfront property it bought in the Tennessee Capital for $254 million in 2021, reports indicate.

The nature of Ellison's announcement, made during an hour-long conversation with Frist, indicates Oracle's potential relocation is in the preliminary stages with no guarantee for a permanent move. And though local brokers have a vested interest in taking an optimistic view of Austin's prospects of hanging on to corporate campuses, some point to on-the-ground data that indicates Oracle might not completely abandon the city.

Taghi, who specializes in office transactions for the real estate services firm in Central Texas, said Oracle has been expanding its Austin real estate and has secured permits for a new office and hotel slated to sprout up alongside its headquarters at 2300 Oracle Way.

This "signals the company’s continued growth in Central Texas," Taghi said.

Oracle’s headquarters relocation, if it materializes, is a one-off occurrence for Austin, and does not mean the company is leaving the city altogether, Taghi said.

Austin, according to CBRE, drew 66 corporate headquarters relocations, including Oracle, between 2018 and 2023. Nashville attracted 21 such moves during that time.

Alecia Burdick, a managing director at Savills, said Oracle was "an early trailblazer" for setting up shop in East Austin, an area in the shadows of downtown's high-rises that only recently became an office hub.

New office buildings such as T3 Eastside and Eastlake at Tillery opened or broke ground in East Austin after Oracle set up its world headquarters just east of downtown.

The tech company's Austin campus could be an ideal location for a company looking to expand or move into Austin, if Oracle does vacate the space, Burdick said.

"This is a unique property for a large end-user seeking a modern office campus in a prime location," Burdick said. "There are few properties like it. Despite the ample office inventory available right now, there remains a strong interest in trophy spaces, especially if they are available at a discount."

Austin is poised to see its office inventory grow by 3%, or 4 million square feet, this year, the most of any U.S. market, according to CoStar data. Meanwhile, overall demand for office space continues to decline in the city amid "persistent hybrid work arrangements and stagnating job growth among tech firms."

Though companies might not be lining up to leave Austin, Oracle isn't the only firm to depart the region after moving its corporate flag to Texas. Cart.com relocated its headquarters to Houston roughly two years after it moved to Austin.

Dozens of companies, both within the United States and from other countries, either relocated to Austin or expanded their respective operations into the Texas Capital between 2016 and 2023, according to data compiled by the Austin Chamber of Commerce.

A bulk of relocation or expansion activity took place in 2020 and 2021, when companies such as Amazon, Lowe's and Tesla either planted corporate flags or grew their operations within Central Texas. Other companies making similar moves to Austin include Alert Media, Allegiant, The Boring Co., Canva, F45 Training and Samsung Austin Semiconductor.