The Coronavirus pandemic’s migratory influence on North American real estate is undeniable and unprecedented; large corporations and the general population are exiting the formerly hottest real estate markets (cities like San Francisco, Los Angeles, and New York) and flocking to areas attractive to those looking for tax advantages and reduced cost of living. States like Florida, Nevada, and Texas have become the “new kids in town”, and they’re attracting business. Big business.
The trend goes back to pre-pandemic times: on May 25th, 2010, Formula One Racing awarded Austin, Texas a ten-year contract. This would be the first time in years that Formula One would have a new home in America, located at a brand-new facility called Circuit of the Americas (COTA). This would not only bring hundreds of thousands of fans to the Austin area every year but also thousands of jobs and countless publicity to the relatively underdeveloped city of Austin. COTA would not only house Formula One but also concerts, Moto GP, festivals, and more. The effects have been stunning: per COTA’s website: “Since its announcement in 2010, Circuit of the Americas has had a cumulative economic impact of $5 Billion on the Austin metropolitan area.”
This explosion of growth and opportunity didn’t go unnoticed; On July 22nd, 2020, on a Q2 earnings call, tech giant Tesla Motors (TSLA) announced that they were selecting Austin, Texas as their new location for Gigafactory 5, the home of Tesla’s new 5.3 million square feet, multi-story manufacturing facility, creating more than 10,000 jobs and billions more in salaries. Since Formula One announced the Austin Grand Prix at COTA in 2010, Austin’s real estate has appreciated 154.39% in a 10-year period. And from April 2021 to April 2022, less than one-year into Tesla’s Gigafactory announcement, home values in Austin have increased by 39.4%. Other tech companies have followed, as well as the expansion of the semiconductor and software industries, and this still-affordable metropolis with zero state income tax has seen a 30% growth in new residents in a decade.
This pattern has repeated often in secondary cities around the country. Favorable business, weather climates, and affordable tax environments have seen huge growth as the pandemic has altered lifestyles and priorities. Take Miami, for example: According to Noradarealesate.com, “Miami-Dade County home values have gone up 20.6% over the past year.” Enter Formula One, who in September 2021 announced that F1 was coming to downtown Miami. Within 40 minutes, all 80,000 tickets had sold. And within days, 275,000 tickets had been pre-registered. Another exploding market is Las Vegas, where real estate has increased 223.54% over the last decade per Noradarealesate.com; 27.3% year-over-year.
Most recently, on March 31, 2022, Formula One announced that they would be bringing a night race to Las Vegas, Nevada in 2023 on a multi-year contract, following the pattern of bringing their product to growing markets.
Although never the most popular sport in America, Formula One has 400 million fans worldwide, many of whom travel the world weekly to races across the globe. F1 will hold 23 Grand Prix races in 21 countries in 2022, 11 of which are outside Europe. It’s known as the “Traveling Circus”. In 2016, Liberty Media bought Formula 1 for $4.6 Billion from the Ecclestone Family. Since the takeover, F1 has inked deals with numerous entities, the largest of which being Netflix. “Formula 1: Drive to Survive” is a Netflix Original Series that debuted in 2019 on the platform. The show has been a huge hit and has given the sport a significant boost, adding to its’ already prodigious fanbase with an influx of American enthusiasts. For the US markets now set to hold Grand Prix events, this means potentially billions of dollars in free long-term publicity. Couple that with Florida, Nevada, and Texas having little to no corporate income tax, great weather, and non-stop events throughout the year; it’s a recipe for good business and booming economies.
Formula 1 has turned the eyes of the world onto growing American cities. With eyes comes tourism, and with tourism, comes infrastructure, jobs, and growth. F1 has smartly partnered with American cities destined for growth, and tech companies have followed suit. Now, resulting favorable work and lifestyle environments have created some of the hottest real estate markets in decades – simply follow the money…
Photo: Tilke Design and Architects
