Page 45 - Trump University Commercial Real Estate 101

Ho w to Read a Market

Decline Phase

Local governments become stretched. Their focus is out on the fringe,
building infrastructure and creating new tax bases farther and farther
from the city center. Often money will be raised from taxpayers in the
mature areas, only to find it redirected to infrastructure needs in

the growth areas. The cities become hooked on growth. Now the
mature areas begin to look threadbare, as repairs are deferred. This
marks the beginning of the decline phase.
Don ’ t invest your money in areas going through the decline phase.
It takes too long for governments not only to recognize the decline,
but to get around to doing something about it. The time to invest in
such areas, as I said earlier, is when governments put their money
where their plans are, and actually begin projects and development
incentives to revitalize the blighted areas.
We are currently purchasing a property on the south side of Dal-
las, where the city has committed to $ 73 million in incentives for
developers to revitalize the area. We will reposition the property to a
more upscale one, while other developers are buying older properties
that they will tear down and replace with high - end retail, entertain-
ment, and commercial spaces.
The entire area is destined to become an alternative to the very
desirable Uptown area of Dallas. Young urban professionals who are
priced out of Uptown will view this area as the next best viable alterna-
tive, as an entire work - live - play area is created.

What Drives Demand in a Market

The first demand factor in any market is the local and national econ-

omy. Despite what the national media would like you to believe, most
economies are driven by local job growth. Nevertheless, the perception
of what the national economy is doing can help or hinder local
trends.

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