That model appeals to private equity firms coming to the city seeking acquisitions, McCollough said. “They describe that as efficient capital: Someone hasn’t raised tens of millions of dollars and burned through it all. They’ve actually built a business.”
After the telecommunication bubble burst in 2001, the Dallas tech ecosystem, dominated by telecommunications as the home to Nokia, Samsung, and AT&T, began to diversify into software, mostly in the B2B space, explained McCollough, an empty nester who lives with his wife in a townhome in Uptown, a neighborhood near downtown known for its lively restaurant and bar scene.
Among other factors boosting the city’s software ecosystem is “exponential growth” in the University of Texas Dallas and Arlington systems, along with an influx of international students, McCollough added.
It’s difficult to discuss the technology sector without mentioning banking uncertainty. While Silicon Valley Bank had a significant presence in Dallas, it wasn’t without competitors that also serviced the technology sector, according to McCollough. “The collapse of SVB isn’t generally expected to hurt the growth prospects of the Dallas technology ecosystem.”
A Small Business Destination
Across industry sectors, business leaders describe a similar trifecta transforming industry sectors: diversification, a networked do-it-yourself culture, and unrelenting growth.
Increasingly, locally owned businesses are in favor.
In the restaurant category, one of the fastest-growing segments is the independent restaurant and craft beer and spirits industries, Cotter said. “We’re seeing fewer chains, more local restaurant groups, and one-off independently owned venues.”
While Dallas is a huge city, its culture of opportunity, along with supportive business networks (not to mention thousands of new residents clamoring for chef-driven dining experiences) drives the city’s homegrown entrepreneurial ecosystem.
“People who want to start their own restaurant, distillery, or brewery can give it a shot and be creative and take a chance on something big,” said Cotter, who lives in Celina, where the fields surrounding his home sprouted 200 new houses in the past couple of years.
So many people have moved to Celina in the past 20 months that the “support services,” restaurants, banks, gas stations, have yet to move in, he said. “They’re coming. It’s crazy growth.”
Corporate America Expands Its Footprint
As entrepreneurs churn out small businesses, the city is growing its reputation as a place where corporate powerhouses roam—and then settle.
The metroplex is home to 23 Fortune 500 company headquarters; 45 in the Fortune 1000. The businesses relocating and expanding here represent all manner of industry sectors, but a high concentration falls into the financial services category, with JP Morgan, Vanguard, and Wells Fargo all adding or announcing new satellite offices around the region.
“The companies moving into Dallas require money and resources,” said Kalgi Ganatra, a senior manager in the Moss Adams Dallas office who serves clients in the financial services sector. “It harbors the environment for banks, credit unions, insurance companies, and fintech. They’re following the growth.”
“Despite the uncertainty in the banking landscape, the need for financial institutions doesn’t go away,” Ganatra added. “I see this as an opportunity for innovation. Fintech in particular is a product of innovation related to challenges in the market that people are trying to solve.”
Another notable case in point: New York-based financial giant Goldman Sachs is slated to break ground on a $500 million office project near downtown Dallas this year. The 980,000-square-foot project will anchor an 11-acre, mixed-use redevelopment planned by Hunt Realty Investments, a centralized real estate investment management company owned by Hunt Consolidated, Inc., which is the flagship entity of the Ray L. Hunt family of companies based in Dallas.
The buildings, which comprise the largest office development in Dallas in decades, are expected to open by April 2026.
Energy Heirs Diversify into Real Estate
The Goldman Sachs project highlights one of the most significant trends reshaping the Dallas economy: the union of oil and real estate. (Hunt Consolidated companies also include oil and gas exploration and production in addition to real estate.)
Unlike Houston, home to the big oil conglomerates, energy companies in Dallas have their roots in family offices. Amid a generational business and wealth transfer, heirs of these family offices have started to invest in more diversified industries, said McFarland, a former assistant controller in the energy industry.
She pointed to the ubiquitous real estate projects reshaping the region.
“A lot of this is oil money,” she explained. “The children and grandchildren of families that would have invested in oil are now moving into tech, real estate, and utilities. So if you look at the metroplex, that’s part of the history that created the city. It’s a huge component of the Dallas economy.”
Real Estate Moves Up, Out, and Into Mixed-Use
The modern-day Dallas real estate boom combines traditional home building with new forms of development aligned with changing demographics and the shift toward remote work.
Just as Dallas is nurturing business magnates as well as entrepreneurs, legacy professional service firms, and next-generation food and tech companies, so too are real estate developers targeting a variety of housing types and styles, both traditional and innovative.
Fueled by a seemingly endless supply of developable land, one frontier is a new crop of outer ring subdivisions springing up in increasingly remote parts of the metroplex.
Simultaneously, builders are breaking ground on more diverse, connected, and human-scale communities—a direction that’s in part a response to the COVID-19 pandemic and remote work.
“The communities getting built are live, work, and play communities,” said Aidé Apodaca Gonzalez, an assurance director in the Moss Adams Dallas office who provides audit and advisory services to clients in the commercial real estate industries. “Mixed-use is the mindset.”
She pointed to Legacy West, a $3 billion mixed-use development in Plano that includes corporate offices, multifamily high-rise living, retail shopping, and restaurants. The development sits on the southwest corner of the Dallas North Tollway and Sam Rayburn Tollway, two of the many highways expanded over the past decade.
Fields West, another Hunt Realty Investments project, will be located near the new PGA headquarters in Frisco, and will include several thousand apartments, hotels, and office space. Frisco is already home to The Star in Frisco, the headquarters and practice facility for the Dallas Cowboys, as well as Toyota Stadium, home of the FC Dallas, the city’s Major League Soccer team.
And that isn’t all that Frisco will have to offer.
In the latest sign that the Dallas area has become a top destination for individuals and businesses: In January 2023, Universal Resorts announced it was building a Universal Studios theme park in Frisco, expected to draw millions of visitors annually. “Frisco is attracting everything,” McCollough said. “Literally. Everything.” In fact, the Dallas Cowboys now call Frisco home.
For many newcomers, the Dallas dream is to buy a single-family home with a yard, all at an affordable price point. But with more people working from home, expectations for multifaceted living and working environments are growing, as is the demand for high-rise apartments.
“We’re seeing a lot of multifamily assets,” Gonzalez observed. In fact, the Dallas-Fort Worth area leads the nation in apartment construction with more than 50,000 units currently being built; this will increase the current apartment inventory by 7.5%. Half of those units are slated to be complete in 2023.
Mixed Use Extends to the Office Market, Too
Changes in the office market also support mixed-use development trends.
In 2022, the corporate headquarters relocation rush ebbed, and office development activity slowed as construction costs increased and companies continued to rethink their need for square footage in the wake of remote work.