‘Why not Dallas?’ How ‘Y’all Street’ aims to become America’s next financial titan (Dallas Morning News)
‘Why not Dallas?’ How ‘Y’all Street’ aims to become America’s next financial titan
A stock exchange, corporate relocations, a growing list of wealthy residents and more. Dallas is hungry to be at the center of growth.
https://www.dallasnews.com/business/2024/08/26/why-not-dallas-how-yall-street-aims-to-become-americas-next-financial-titan/
11:31 AM on Aug 26, 2024
Dallas has nine Fortune 500 companies, 24 when counting the broader D-FW area. A Downtown-based stock exchange is on the horizon, corporate giants are moving headquarters and offices in the area and more wealthy individuals are beginning to call the city home.
For years, economists have somewhat gawked at the idea of Dallas knocking off America’s supercities like Chicago and New York City as financial hubs. But with its varied growth in population — residential and corporate — more are becoming bullish on Big D’s momentum.
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The city is sprouting from the roots of being the Sun Belt’s economic powerhouse into one of the biggest ones in the country. Though New York City and, to some extent Chicago, are still the kings, slow growth after COVID-19 means Dallas is in the right place at the right time to emerge with the financial crown.
“New York City and Chicago will always be major centers for finance due to sheer inertia, if nothing else,” said Ray Perryman, CEO of Waco-based research firm, The Perryman Group. “However, there has been a clear move toward Texas and especially Dallas that is picking up steam. The area does an excellent job of promoting itself and maintaining competitive advantages.
“Continuing those efforts will only accelerate the progress,” he said.
Plus, Dallas has one thing others lack: central location and an easy way to get around the country. Combine those elements with quirky, effective catchphrases like ‘Y’all Street,’ which consistently reels in companies, and the region has a recipe for a bright future, said Dallas billionaire Mark Cuban.
He’s seen the city’s growth for decades and is still investing in it with companies like Dallas-based Mark Cuban Cost Plus Drugs and a fair share of his Shark Tank companies based out of Dallas.
“I think we have a great chance,” he said. “We are in the center of the country, close to a major airport and companies are moving here. There is no reason why it can’t happen.”
A Wall Street street sign outside the New York Stock Exchange in 2013.(Mark Lennihan / AP)
What exactly is ‘Y’all Street?’
It’s more of a concept than a real place, right now. There is no physical address like how Wall Street is in the Financial District of Lower Manhattan.
Rather, the combination of developments like Goldman Sachs’ collaboration with Hunt Realty Investments and Hillwood Urban on Field Street next to Victory Park for a $500 million tower, and the upcoming Texas Stock Exchange, which has received $120 million in funding from investors like BlackRock and Citadel Securities, has helped the area gain the moniker.
The new Goldman Sachs development is expected to add 5,000 jobs like bankers and investors to the city.
Projects like the two are exemplary of the confidence investors with deep pockets have in the area, said Carlos Munguia, president & CEO of Houston-based Amegy Bank’s Dallas region.
He’s been in the state his entire life and the influx of newcomers to the area isn’t lost on him or others in the banking industry.
“One of the one of the telltale signs of Dallas’ growth is the market for banking is very competitive,” he said. “A lot of my competitors are becoming aware of that and want to be here too. Because of that, it’s bringing in all these others to create this financial hub that everybody’s talking about.”
The Bank of America building in downtown Dallas.(Smiley N. Pool / Staff Photographer)
Today, there are 658,600 Texans working in finance compared to New York’s 544,900 workforce. Investment banking and securities employment has skyrocketed 111% in the past two decades. Since the pandemic, that number is 27% trouncing New York’s 16% and 5% respective growth.
The spur of affluent outsiders to Dallas hasn’t gone unnoticed as it’s one of the factors which has made Dallas the 22nd most wealthy in the world with a growing population of the young and rich.
“Most of the major players already have a substantial presence here, and there’s a rich supply of growing firms who will be in the market for their services,” Perryman said.
Construction continues on Goldman Sachs’ new Dallas campus on Field Street next to Victory Park in Dallas on Tuesday, Oct. 10, 2023. Goldman Sachs plans to house almost 5,000 workers in a new three-building office campus just north of downtown Dallas.(Juan Figueroa / Staff Photographer)
Company relocations
Adam Gersting, managing partner at Chicago-based business and tech consultancy firm, West Monroe, is no stranger to Dallas’ growth. He’s an example of individuals at the center of a broadening base leading an office which has tripled in size since 2018.
His company is one of many recognizing that Dallas is one of the top destinations for businesses to call home after relocating. Corporate giants like California’s CBRE and AECOM, Pennsylvania’s ATI, Illinois’ Caterpillar and many more have moved its headquarters to D-FW.
Dallas’ gains didn’t come from nowhere. The city greatly benefits from Texas’ business friendly policies such as no corporate or personal income tax, less regulatory burdens, location, workforce and lower overhead costs compared to regions like California and New York.
Dallas specifically benefits because of the easy connectivity to the rest of the country through D-FW International Airport, a strong collegiate system throughout the metroplex and a relatively lower cost of living even when compared to other areas of Texas.
“This isn’t a matter of this continuing a trend. It’s still accelerating forward,” Gersting said. “We’ve built a really optimal environment for businesses which applies to and enables financial services and industries broadly as well.”
It also helps too that Dallas can reliably depend on the wider metroplex to carry its own weight. Wells Fargo is closing in on its two-tower, 850,000-square-foot office campus in Irving which cost them $500 million. Charles Schwab is wrapping up construction on its fourth office building in Westlake, costing a modest $24 million.
When the rest of the metroplex does well, it drives traffic back to Dallas, said Thomas Haskins, office managing partner for Indianapolis-based business law firm Barnes and Thornburg. He represents financial institutions in and around the city.
“You could say the same thing about the traditional power hubs. In New York, you got a lot of people that live in Greenwich and Westchester but work in Manhattan. Same thing with Chicago and Naperville,” he said. “For us to have such a sophisticated set up with our cities like Frisco, Plano, Flower Mound, Irving, the list goes on, makes us a powerful entity.”
Dallas still isn’t satisfied with what it has either. The city’s recently passed bonds package included setting aside a flexible $72 million for economic development which can be used for workforce programs, funding developments and more.
Kids play on the open lawn of Klyde Warren Park, a day before total solar eclipse on Sunday, April 7, 2024 in Dallas. (Shafkat Anowar / Staff Photographer)
Creating an effective home for residents
Companies don’t move to cities overnight and it’s not done these days without knowing a region has more to offer than its business climate. Companies have become more conscientiousness that attracting workers requires giving options for life outside of the office.
Dallas, for years, struggled to overcome its image of being a boring, gray city filled with nothing but skyscrapers and cars. But especially since the turn of the 2010s with the birth of places like Klyde Warren Park, the city is getting closer to shedding that image.
It may not seem like it on the surface, but outdoor locations like Klyde Warren Park play a big role in establishing Dallas’ healthy business climate, said Dan Biederman, founder and president of New York-based Biederman Redevelopment Ventures, an urban redevelopment firm which partly oversees operations at Klyde Warren Park.
“People that are moving from California, New York and Illinois expect a certain lifestyle,” he said. “We have the fun part of the job, which is taking advantage of when everybody is already here. But we’ve got to take lessons from other places that have already succeeded in becoming hubs and apply it here. That goes beyond business policies.”
Business traffic still gets driven back to Klyde Warren Park, too. JP Morgan recently added 167,000 square-feet to its nearby offices.
Plus, the city has its robust Arts District spanning nearly 70 acres and is the largest arts district in the entire country. Dallas also has the 6,000 acre Great Trinity Forest, one of the largest urban forests in the U.S.
With more projects still on the way like Community Park at Fair Park and Southern Gateway Park, the city has firmly established itself to businesses as place where workers will be able to find balance outside of the office and potentially build a family one day.
“Dallas is staring down so much critical mass with new office buildings and nice residential developments,” Biederman said. “But people need that last victory and companies need that last push to get here. Other cities have had a head start on Dallas, but I really think Dallas will pass most of them in this regard.”
DALLAS, TX – FEBRUARY 06: The Dallas skyline is viewed on February 6, 2015 in Dallas, Texas. As crude oil prices have fallen nearly 60 percent globally, many American communities that became dependent on oil revenue are preparing for hard times. Texas, which benefited from hydraulic fracturing and the shale drilling revolution, tripled its production of oil in the last five years. The Texan economy saw hundreds of billions of dollars come into the state before the global plunge in prices. Across the state drilling budgets are being slashed and companies are notifying workers of upcoming layoffs. According to federal labor statistics, around 300,000 people work in the Texas oil and gas industry, 50 percent more than four years ago. (Photo by Spencer Platt/Getty Images)(Spencer Platt / Getty Images)
What comes next for Dallas?
The city has all the elements it needs to win out and become one of the leading corporate and financial services hub in the United States.
Though the city still faces immense challenges, like trying to create a more effective public transportation system and it having to balance the needs of hundreds of businesses along with thousands of new residents, it’s still primed for more growth, Perryman said.
“The synergies that have arisen in this environment are a primary reason for the ongoing emergence of Dallas as a financial center,” he said. “I think we’ll see Dallas and the rest of Texas continue to make inroads into the investment banking and securities markets. In fact, a strong case can be made that Dallas has already surpassed Chicago.”
With the city’s strong business prowess, business-friendly policies and emergence as a destination beyond skyscrapers, it may finally be Dallas’ time to emerge as a financial hub leader and one of America’s next supercities, said Paul Genender, co-chair of global law firm Paul Hastings’ Dallas offices.
“I don’t see any reason why Dallas shouldn’t be mentioned as one of, if not, the top business centers in the country. I used to joke that Dallas was the center of the universe, but it’s not a joke anymore,” he said. “All I can think about is why not us? Why not Dallas?”