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DALLAS-Though a popular landing ground for corporate headquarters, Dallas-Fort Worth’s positioning in the logistics industry doesn’t even make the world’s Top 20 shipping points, an audience learned yesterday at the National Association of Industrial and Office Properties’ third annual trends conference.

Driving home the point was Richard Savage, vice president of OAG Cargo Products in Dallas. “The landscape is changing,” he told the 285 attendees. “I call Dallas-Fort Worth home, but the world I live (and work) in is Singapore, Hong Kong, Shanghai, Brussels, Taiwan and believe it or not, Russia.” Savage was one of four speakers at the conference held at Cityplace Center in Dallas, where the news wasn’t always rosy but the promise of the upside was echoed by all.

Savage’s chart, a combination of rail, road and air shipping numbers, puts Memphis in the first slot. “If FedEx wasn’t there, I am convinced there wouldn’t be a Memphis,” he said. In descending order, the rest of the Top 10 are Hong Kong, Anchorage, Tokyo, Los Angeles Airport, Korea, Singapore, Frankfurt, Miami and JFK International Airport. Other US locations in the Top 20 are Chicago, Newark, Louisville and Indianapolis.

Savage’s hard-hitting message was followed with yet another chart: China, with 49 red dots at cities that five years ago didn’t have an airfield and today have freight planes landing daily.

Adding to the Chinese influence, Shanghai is on a fast-track to unseat Hong Kong as the kingpin. In the last three years, the city added 96 million sf of distribution space and a $17-billion airfield and is coming off five years of building 17 skyscrapers as part of the drive. Today, China produces 20% of the world’s manufactured goods and it will be 40% by 2012, according to Savage. “There is a Tsunami wave coming our way. It’s coming from Asia…we need to position ourselves economically and politically,” he stressed.

Logistically, Dallas-Fort Worth has ample upside potential. Savage said Hillwood’s Alliance is a “window of the future,” here and elsewhere…where rail, air and road come together in duty-free zones set up as logistics and distribution hubs. It won’t stop the job flight to countries like the Philippines, China or India nor is it a panacea. “But,” Savage emphasized, “the days of brick and mortar (in the US) are not over.”

As the industrial sector does battle, the corporate world will continue to push consolidations to keep occupancy costs below 3.5% of annual revenues, said Michael Buckley, director of the MS program in real estate development at Columbia University and founding principal and president of Halcyon Ltd. Real Estate Advisors. He said the consolidations will be in “virtually every sector…and it’s going to create opportunities.” His best advice is cities and regions need to think, have vision, create pro-development mechanisms and assemble an incentives war chest.

Dr. Bud Weinstein of the University of North Texas said the “Jekyll and Hyde” economy simply is making it difficult to tell if the worst is over. “The fact is there are three million fewer jobs today than there were three years ago and 2.5 million of those jobs were in manufacturing,” he said.

A “sustainable recovery” isn’t obtainable until the region and nation create more jobs than they destroy, according to Weinstein, who believes industrial production is the tell-all indicator. And, he said, “we are not going to have a sustainable economic recovery until this sector goes up for 12 months or longer.” It’s been five months, a sign that perhaps the recovery has taken root, but there are still risks afoot: a burst in the residential real estate bubble, deflation, terrorist attacks, more big business bankruptcies and low levels of business investment. Just three years ago, venture capitalists pumped $30 billion into the US economy. This year started out flat, but has pulled in $4 billion in recent months of new equity investment, another good sign.

“This is starting to look like the 1960s,” Weinstein said. “The worst is over, I hope, and 2004 is going to be better, I think.”

The seminar’s finale was an inside look at the goings-on of the 78th Texas Legislature, before and after the retreat to Ardmore, OK and Santa Fe by a handful of Democrats jockeying to protect their legislative seats from a Republican-drawn redistricting. J. Gaylord Armstrong, partner in the firm of McGinnis, Lochridge & Kilgore in Austin, told the audience that there’s “a new type of Republican” in the majority and ones who hail from suburbia, where residential ties not business control the mood of the electorate and the elected.

The former legislative aide to the late President Lyndon B. Johnson said the rifts at all levels of the state government are deeper than they’ve ever been, including a dispute over a franchise tax that would be levied against all forms of business entities. It has yet to clear the floors to make the public ballot, but the issue is far from dead. “We’re on the front step of the threshold of the greatest change in Texas politics,” he said.

Also yesterday, NAIOP announced its $5,000 scholarship winner, Jason Signor, who is in his final year of Southern Methodist University’s MBA program. Hosted by NAIOP and SMU, this year’s sponsors were Land America-American Title, Hillwood, Billingsley Co. and Stutzman, Bromberg, Esserman & Plifka.

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