Can Amazon Take Dallas To The Big Leagues?
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According to some predictions, Dallas is the most likely candidate for Amazon's breathlessly anticipated HQ2. About 50,000 jobs, an 8M SF campus and the sheer brand might of Amazon are bound to shake things up if Dallas does win the bid, but is it enough to take this city to the big leagues?
Though Dallas is enjoying a long and profitable upcycle in almost every asset class, there are a few things holding us back from making it to the upper echelon of top-tier cities like San Francisco or New York City — things even Amazon cannot deliver.
Putting aside industrial, which is a national top-tier market and enjoys a lot of attention from investors both foreign and domestic, market experts say Dallas is still in the process of maturing, and institutional capital has been avoiding large-scale moves in the market.
Reserve Capital Partners partner Greg Seitz Downtown needs to be a 24-hour locale before investors will consider Dallas a global player.
“I think [Amazon HQ2 would be] a dramatic enhancement, but it’s not going to be an automatic light switch that changes things,” Seitz said.
The only caveat, Seitz said, would be if Amazon put HQ2 in Downtown Dallas, but he also said he does not see a spot in Downtown where Amazon could fulfill its HQ2 requirements.
“Is there going to be a tipping point? I think we’re seeing it … we are seeing it more in isolated areas now within the market. I believe the Uptown market, the Legacy market would be viewed similarly as any of the top-tier markets [around the country],” Braun said.
Seitz said there are markets within Dallas like Uptown that exhibit the kind of dynamic vibrancy that makes institutional investors open their wallets. However, in his opinion, the transformation of Downtown Dallas — not the advent of a big tech company — is the last domino to fall before global stature.
Both Seitz and Braun said Amazon would greatly aid Dallas on its journey to the top, but neither of them feels it would immediately change Dallas’ image from “immature, exercise caution” to “mature, invest on sight.”
Population growth is what we need to add momentum to the maturation process, Bruan said. Seitz said once population density hits critical mass in Downtown via residential development, it can start the final leg of its journey to global acclaim.
“As the population grows, we’re going to see those market dynamics improve. I think it’s relatively near term when most of Dallas is looked at as having meaningful barriers to entry. When I say that [I mean] five to 10 years,” Braun said.