Y'all Street: Texas on track to be the financial capital of the US

Xerobull disclaimer: yeah, It's mostly Dallas, which is more of a southern salient of yankeeland than a real Texas city, but I'll take the kudos.

Welcome to Y’all Street, Texas’ Burgeoning Financial Hub
Goldman Sachs, JPMorgan and others are lured to the state by lower taxes and housing costs and a friendlier vibe


The site of the Goldman Sachs campus in Dallas last fall. SHELBY TAUBER/BLOOMBERG NEWS

By Elizabeth Findell
Aug. 10, 2024 5:30 am ET
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DALLAS—Ross Perot Jr. gestured out the window as his helicopter circled a 4.5-acre pit alongside the skyline of downtown Dallas. Texas and U.S. flags hung from a crane within it.

The site is where Perot’s real-estate investment company, Hillwood, is partnering to build a $500 million Goldman Sachs GS 1.33%increase; green up pointing triangle tower for more than 5,000 bankers and investors. That will make it the financial firm’s second-largest office, behind New York. As the helicopter swung northwest, windows glinted from two unfinished Wells Fargo office towers, scheduled to open next year. A bit farther away: a fourth office building under construction for Charles Schwab, which moved its headquarters from California to the Dallas area five years ago, and the footprint of a Deloitte campus doubling in size.

The sprawling landscape illustrates an expansion that has brought to North Texas a presence in financial services that now sits second only to New York City in the U.S. And growth of so-called Y’all Street is accelerating.

“It’s stunning to watch,” said Perot, a Dallas native and son of the former presidential candidate, of the phenomenon other investors termed a finance invasion. “You’re really seeing a whole new North Texas ecosystem.”

New York’s foothold on finance still dwarfs that of North Texas. But greater Dallas has largely shed its reputation as a financial backwater, memorialized in Michael Lewis’s 1989 book, “Liar’s Poker,” as a purgatory Salomon Brothers traders in New York feared being shipped off to.


From left, Dallas Mayor Eric Johnson, Goldman Sachs President John Waldron and Ross Perot Jr. last year at the site of Goldman’s project. PHOTO: SHELBY TAUBER/BLOOMBERG NEWS

Data from the Bureau of Labor Statistics shows that Texas investment-banking and securities employment has increased 111% over the past 20 years and 27% since the pandemic, compared with 16% and 5%, respectively, in New York. The number of people employed in finance overall has risen 13% in Texas since 2019, compared with 2% in New York and 3% nationally.

Dallas now ranks second to New York City among metro areas in the number of workers employed in finance-related industries. Other cities, particularly in the Sunbelt, have seen growth as those services increasingly seek to be closer to customers nationwide.


Florida has seen a nearly 15% increase in the number of people employed in finance since 2019, according to the bureau’s data. The Charlotte, N.C., metro area, home to Bank of America, now has more than 8% of its workforce employed in finance, compared with 6.9% in Phoenix, 6.8% in Dallas and 6.5% in New York.

Ray Perryman, president of the Perryman Group, an economic research and analysis firm, said Texas has outpaced New York for several years in banking employment and is rapidly gaining in investment employment. Other major cities such as Chicago have seen minimal growth, he said.

“Wall Street remains the center of the investment universe, but Y’all Street is gaining rapidly,” Perryman said.

Organizers in June announced the launch of a Texas Stock Exchange, a long-shot initiative to compete with the New York Stock Exchange and Nasdaq. Those in the industry disagreed over whether the effort has a chance of success or is primarily a political statement, but they agreed it could add heft to financial interest in the area.

While the flight of many Silicon Valley tech executives to Austin has been exhaustively reported, the finance boom in Dallas has gone less noticed.


Deloitte is adding new buildings on a campus where it provides training in Westlake, Texas, near Dallas. PHOTO: ELIZABETH FINDELL/WSJ

 

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JPMorgan Chase now has more employees in Texas (31,000) than in New York state (28,300). In Texas, about 12,700 employees work out of a 50-acre campus in the Dallas suburb of Plano, where meeting rooms are decorated with saddles and Western wear and on-site eateries include a Texas barbecue stand. The complex, comprising four buildings and 1.5 million square feet of office space, has doubled its employees since it opened in 2017.

“You can do the job you’d do in New York, but in a different location,” said Andy Rabin, who oversees JPMorgan’s investment banking in the Southwest.

While Houston is central to oil and Austin to government, the Dallas-Fort Worth metro area has long been a financial hub. It is the fourth-largest metro area in the country and one of the most centrally located in North America.




Investors and financiers who moved to Dallas from the East and West coasts pointed to several other competitive advantages the area has. Housing costs are lower than in many other U.S. cities, and space to build new facilities is plentiful. Situated in the middle of the U.S., with one of the country’s biggest airports, it is a quick nonstop flight from virtually any major city. Executives appreciate the state’s low-tax, low-regulation approach to business. Several financiers said they have found it friendlier and more accessible to newcomers than other markets.

“Dallasites want you to love Texas,” said Aasem Khalil, a Goldman partner and a native New Yorker who was asked to move to Dallas in 2016 to run the office there. “People here don’t view success as a zero-sum game.”



JPMorgan has more employees in Texas than in New York, including over 12,000 in the Dallas suburb of Plano. PHOTO: ELIZABETH FINDELL/WSJ


Newcomers have embraced a regional culture of over-the-top Christmas lights and a work culture of formal wear including cowboy boots and more family-oriented flexibility.

Rebecca Kral, partner in a financial communications firm working on contested situations who moved to Dallas in early 2020, said she has been struck by how most conversations begin with her personal life, rather than her job, even if they eventually lead to professional connections.

While the intensity of finance work is still present, people’s desire for a work-life balance—as well as the inability to answer emails while commuting in traffic—encourages efficiency, she said.


“It’s easier to say to a client that I’m having dinner with my kids and will come back afterwards,” she added.

The money-management firm Fisher Investments moved its headquarters to Plano from Washington last year after that state’s Supreme Court upheld a new capital-gains tax on its wealthiest residents to fund early-childhood education programs.

Ken Fisher, the founder, had already moved during the pandemic to a lakeside North Texas compound where the California native spends his free time zipping around on an ATV and watching snakes, turtles and armadillos.

The firm, which has corporate offices in four states and eight countries, now has more than a quarter of its employees in the Dallas area, a presence Fisher expects to increase. He said he believes employees there have a better work ethic than other locations.



Charles Schwab is adding a fourth building to its campus near Dallas. PHOTO: ELIZABETH FINDELL/WSJ

“Texas is a mindset more than it is any other thing,” he said. “That mindset of futurism that, ‘We’ve got a problem, but we can take care of it.’ ”

Nearly a decade ago, the Partnership for New York City, a nonprofit group of chief executive officers that aims to bolster the city, warned that New York’s future as the world financial capital could be at risk because of growing competition from places like Dallas.

Since then, Texas has wooed major projects on both a state and local level. Dallas Mayor Eric Johnson said it was a priority when he assumed office in 2019 to make the city the site of the new Goldman Sachs project, over competing suburbs. Dallas offered roughly $18 million in job grants and property-tax abatements for the new building.




Johnson said he and other Texas leaders have sought to show financial organizations that they aren’t taken for granted. “They haven’t had this kind of lovefest in a long time,” he said.

Such firms have brought high-paying jobs; the Goldman deal is contingent on its providing at least 5,000 jobs at an average salary of at least $116,000.

Peter Muriungi, CEO of Chase Auto, who moved to Dallas from Kenya in 1997, called the increasingly wide pool of talent, as well as competition, stunning. While the region’s population boom is well-known, its growth in the financial ecosystem has flown under the radar, Muriungi said.

“There’s still some tumbleweed attitude in the Northeast,” he said. “People come here and say, ‘Wow, I didn’t expect this.’ ”

 

Yeah but the country is just starting to figure it out, for some reason.

Plano/frisco is where all the real corporate transplant assholes live. I bet if you were to do an informal census the majority of them aren’t from Texas (or didn’t grow up here).

I give you a pass, compadre. I’m sure someday there will be some sort of diehard style jailbreak for you and you will be able to get back to where you belong.