By Alejandro Garza, Baker ’18
Commencing Wednesday, January 18, 2017, First-Year Baker Program in Real Estate students will travel to Dallas for their annual domestic trek. The Baker Program identified Dallas as a dynamic, fast growing hub with many learning opportunities for students. According to Chris Hipps, managing director of CBRE Investor Services, Dallas ranked as the third most important target market for real estate investors in 2016, after New York and Los Angeles. Given the sustained economic growth in the region, and with the market still producing strong returns compared to other markets, it is no surprise that the city falls near the top of this list, and that it holds great potential lessons for visiting real estate students.
In the Dallas market, the office industry tends to take the spotlight, with corporate relocations a common occurrence. For instance, the brokerage firm Charles Schwab announced in August 2016 that it will develop a new campus in North Dallas´s financial cluster. Also noteworthy is that industrial real estate assets are on pace to set new records in 2017. It is well known that the primary demand driver for industrial space is the consumer, and with the growth of e-commerce and the Metroplex’s central location, the Dallas market expects to see rapid growth for industrial real estate.
On a more macro level, the Dallas economy continued to grow well above the state average in 2016, and unemployment continues to remain low. As a result, it is expected that the residents of the Metroplex will drive growth in service-related industries. In 2016, Amazon leased just over 2.4 million square feet of industrial real estate in 3 distinct locations (two of them of over 1 million square feet each) in Dallas to open new fulfillment centers. U.S. imports, which are an additional driver of demand for warehouse space, are expected to rise despite the political environment due to domestic demand and inexpensive import prices.
Dallas has seen dynamic demographic changes during the last decade, as its strong economic performance has attracted large companies that have generated thousands of new jobs in the financial and service sectors. Downtown and Uptown Dallas have seen vibrant communities spring up that are populated by young professionals, while North Dallas is characterized by affluent communities that demand large amounts of goods and services.
Revitalization projects in South and West Dallas, which have predominately Hispanic and African American communities, have now set the stage for a more broad, renewed interest in the redevelopment of communities and commercial real estate assets in the Metroplex. One example of this redevelopment, which Baker students will be touring during their trip, is Trinity Groves, located West of downtown across the Santiago Calatrava-designed Margaret Hunt Hill Bridge. The south, in contrast, is growing hub for industrial development. The distinct sites and projects that Cornell University´s Real Estate students will visit during this trip will result in an enriching learning experience.