Goldman Sachs expands to Dallas, joining Wall Street’s latest move west

The number of finance and insurance jobs in Dallas has surged 33% in the past decade, more than double the national average.

Wall Street titans and Texas financial shops are expanding in Dallas at the fastest pace since the 1980s oil bust that shuttered hundreds of banks in the state.

Among the firms promising to add thousands of jobs to the city is Goldman Sachs Group Inc. The company, which has been building up its U.S presence beyond the New York headquarters, plans to develop a new regional campus on three acres in the Victory Park neighborhood of Dallas. Construction will start this year on a 800,000-square-foot tower to house about 5,000 employees.

“The board and I are excited to be here,” Chief Executive David Solomon said last week after flying in on the company’s much talked about private jet to attend an annual shareholders meeting, where he was surrounded by executives including his chief operating officer, lead director of the board and the head of the bank’s Dallas office, Aasem Khalil.

“This is a great city, has a huge pool of talent and we’ve been growing our presence since we established our first office here in 1968,” Solomon said.

The new site will allow Goldman to consolidate its workers across North Texas into one campus, making it the firm’s largest U.S. hub outside New York.

It’s part of Dallas’ emergence as the latest outpost of the Wall Street diaspora. The region is sweeping in high-profile dealmakers, wealth management firms and industry giants, as firms and their executives relocate to Texas from higher-cost states including California and New York. Wells Fargo & Co. has joined Goldman this year in pouring investment into a new campus to house thousands.

They followed Charles Schwab Corp. and other financial firms that moved or grew their presence in the region over the past few years, capping a rapid expansion in the industry that got going in earnest when JPMorgan Chase & Co. opened a 6,500-person campus six years prior.

The burst of activity is giving fresh prominence to a former regional banking capital whose luster dulled with the failures and buyouts of its local lenders when a Texas oil boom went bust four decades ago. In the years since, businesses have flocked to the area, citing the state’s zero income taxes, a massive international airport, the relatively affordable cost of living, plenty of available land and a large talent pool.

Opponents of the Republicans who run state government have warned that Gov. Greg Abbott’s aggressive push to codify socially conservative policies on issues such as abortion and transgender rights will repel newcomers. This week, Abbott drew scorn for labeling the victims of a mass shooting “illegal immigrants.” He’s criticized diversity and inclusion programs and gone after investing that takes environmental, social and governance factors into account. For now, though, it’s hard to find evidence of that keeping transplants away at a large scale.

BOOMING ECONOMY

“Texas has a booming economy, a large and fast growing population, a very diversified industrial structure, and all of that has led to a rapid development of the financial services sector,” said Bernard Weinstein, an emeritus professor of applied economics at the University of North Texas in Denton.

There have been more than a dozen significant financial services expansions in the region since the start of 2021, including Charles Schwab relocating to the Dallas suburb of Westlake from San Francisco. Fidelity Investments, which also has a large campus in Westlake, said it would add another 2,000 jobs based in the region.

The $1.2 trillion asset manager TIAA said it would open a new office in the north Dallas suburb of Frisco and bring 2,000 new jobs to the region by the end of 2029. The billionaire money manager Ken Fisher announced plans this year to move his eponymous firm to the Dallas suburb of Plano from Camas, Washington.

And plenty of other banking and investments firms are making smaller bets in Texas. In the same span, Jefferies Financial Group hired a former New York-based banker to help build out its presence in Dallas. Atalaya Capital Management opened up its second office outside New York in Dallas and acquired a local private credit firm to expand its presence.

Weinstein doesn’t expect the growth to slow down much anytime soon.

[More: Fisher Investments moving headquarters to Texas from Washington state]

EMPLOYMENT GROWTH

“It’s a combination of pull factors in Dallas and other parts of Texas, push factors from California and the Midwest and to some degree the Northeast, where the cost of living and cost of doing business and regulatory environment has become more hostile,” Weinstein said. “That’s pushing more people and businesses into southern states.”

All that growth has also made Dallas a more attractive place to live, with the perks of a big city when it comes to nightlife, a buzzing restaurant scene and the arts. But it’s less dense and more affordable than other big cities like New York, San Francisco or Chicago. The median rent for a two-bedroom apartment in Dallas was $1,440 in May, compared with $2,110 for New York City, according to data compiled by Apartment List. The average home value in the Dallas region is about $308,000, less than half the cost in the New York area, according to data compiled by Zillow.

Employment in the finance and insurance industry has grown 33% over the last decade in the Dallas metro, more than double the US rate of 13.7%, according to data compiled by the Dallas Regional Chamber. The largest employers in the Dallas metroplex include Bank of America Corp. and JPMorgan.

The tallest building in downtown Dallas is the Bank of America Plaza. Two other prominent skyscrapers in the city are Comerica Bank and Chase Tower. And those offices — and others in Dallas — are likely to be a lot more full than counterparts in New York or San Francisco. Post-pandemic return-to-office levels are significantly higher in Texas cities than on the East Coast or in California, according to data compiled by the security firm Kastle, which measures office access at 2,600 buildings across the country.

The influx of newcomers and businesses has also helped spur the growth of Texas-based banks and financial services. Texas Capital Bank recently launched an investment banking division to provide more services for clients. Chief Executive Rob Holmes said the bank’s been able to attract talent from major firms. Before joining Texas Capital in 2021, Holmes worked for JPMorgan for more than 30 years. Last month, he hired a former managing director at Goldman to serve as the bank’s chief credit officer.

“We have people come from a lot of the bulge bracket firms because they want to live in Texas, they want to be part of building something,” Holmes said.