All we ever hear about when it comes to investment are the deals made in New York or California. And it’s hard to dispute that the coasts do get some of the most investment in the U.S. But that trend is about to stop as more and more companies will begin to look toward a growing Middle Corridor as one of the best places to invest. The region is quickly growing and has already produced a 2.6 billion dollar sale of Indianapolis based ExactTarget to Salesforce, demonstrating the further potential for growth in the region.

People are moving there:

What better sign do you need?

Texas had the most population growth of any state in 2015, adding 490,000 residents in just one year. The affordable housing there and vast quantity of land have people moving to this portion of the Middle Corridor in droves. And it’s not just domestic emigration that’s fueling the population growth. According to one study, Texas is averaging approximately three births per death, a far better recipe for growth than the one to one ratio in Chicago. Texas may boast just $38.6 billion in investment right now, a far cry from the more than $300 billion invested in California, but the population growth in the state should have investors extremely excited about potential business opportunities there.

Cities like San Antonio, Houston, and Dallas have grown exponentially in the past few years thanks to this population growth. People are also moving to Nevada and Arizona, but it’s nowhere near the sheer number of people who have chosen to make Texas their new home.

GDP Growth Rates as a Percentage of Investment

California and Oregon still top the list at a 3.3% average Gdp Growth, but Texas and Colorado aren’t far behind at 3.2% and 3.1% respectively.

If we further break down the data by deal size as a percentage of GDP growth, we find a few interesting things. First, California still tops the list. Is that really a surprise given the existence of Silicon Valley? For every one startup there that succeeds, nineteen others that got deals fail. But when you look at Texas compared to New York, for example, you find that, on a relative basis, Texas provides some shocking results.

The New York metro area alone received $1,691 million dollars in investment and grew GDP by just 2.3%. In comparison, Texas grew GDP by 3.2% with just $181 million dollars in investment. The Middle Corridor is simply finding ways to do more with less. Colorado received just $118 million dollars in investment and turned it into 3.1% of GDP growth. In contrast, California managed to just 3.3% growth in GDP with a whopping $3,921 million dollars in investment. The money that goes into the Middle Corridor is providing a far greater return in GDP growth when compared to the coasts.

And it’s not just GDP growth that should have investors excited. The Kaufmann index, a recently introduced statistic that measures startup activity, ranks the following five states first for 2015: Montana, Wyoming, North Dakota, Colorado, and Vermont.

According to the index, the high level of GDP growth four of these five Middle Sector states is linked to this high level of startup activity. This index is measured based upon the rate of new entrepeneurs in the economy, the percentage of entrepeneurs driven by opportunity, and the startup density, which is the rate at which businesses with employees are created in the economy.

Company Expansion

Guess where Apple’s biggest campus is. California? Nope. It’s actually in Austin, Texas, where the company chose to build a massive 1.1 million square foot campus that will have more than 6,000 employees. Apple has decided that it needs to expand and sees a move to the Middle Corridor as the next logical step in their plan.

And they’re not the only ones. McKesson Corp. is expanding operations in Dallas and adding a new office in Irving. Other companies that have made the move to Texas since 2014 include Dropbox, Oracle, and Liveops.

People are moving to the Middle Sector thanks to a far lower cost of living. The average rent in San Francisco for a one bedroom apartment is $3600 and in New York it’s $2200. In comparison, the average rent in Dallas for a one bedroom apartment is just over $1100. And in San Antonio it’s just $850 a month! Is it any surprise that people are moving to these locations?

Investor would be wise to take these ideas into consideration when deciding where to place their money.

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