Disruptive technologies are changing the face of the globe, and one that could revolutionize transportation would also be a monumental game changer for real estate. The high-speed Hyperloop system would make it possible to commute from distant locations that could suddenly skyrocket in value.
The Hyperloop is a futuristic system of pods, or capsules, for both people and cargo that shoot forward inside vacuum tubes at speeds that could conceivably reach 700 miles per hour. The pods would be able to move at faster speeds because of the low-pressure environment that creates less resistance. The pods would also be suspended in mid-air using electromagnetic energy so there would be no track friction to slow them down. The air remaining in the tube would then be pumped from the front of the pod to the rear, propelling the pod forward toward an area with lower pressure.
Hyperloop One
It’s hard to imagine this could be a reality, but a Los Angeles company called Hyperloop One has been developing its own system, and recently completed its first full-scale test. The pod only hit 70 miles an hour, but the company hopes to hit 250 miles per hour in a test later this year, as it works toward the ultimate goal of 700 miles per hour.
As the company ramps up its testing, it’s also moving forward with plans to build the very first Hyperloop systems. It held a contest called “Hyperloop One Global Challenge” for the best locations to build the Hyperloop, and it just announced 10 potential winners. The company solicited ideas from around the world — and six of the winning locations are in North America — four of those six are in the United States.
Hyperloop Hot Markets
The Hyperloop has the potential to revolutionize mass transit in whatever region it serves. It will make it possible to commute 200 miles in less than 30 minutes, increasing the value of any real estate that is suddenly within commuting distance. Coldwell Banker wrote in a recent blog, “If all goes to plan then the Hyperloop will be hands down the most disruptive thing to happen to real estate in our lifetime.”
So where are these up-and-coming hot real estate markets?
In the United States, potential Hyperloop routes include:
- Cheyenne, Wyoming to Pueblo, Colorado with a stop in Denver.
- Chicago, Illinois to Pittsburgh, Pennsylvania with a stop in Columbus, Ohio.
- Florida: Miami to Orlando.
- Texas: Dallas to Houston.
The other North American locations are:
- Mexico: Mexico City to Guadalajara.
- Canada: Toronto to Montreal.
Hyperloop One co-founder Shervin Pishevar said in a press release, “The Global Challenge became a movement of thousands of people from more than 100 countries over six continents. Like us, they believe that Hyperloop will not only solve transportation and urban development challenges within communities, it will unlock vast economic potential and transform how our cities operate and how we live.”
Hyperloop One plans to work with each winning team to validate their proposals and further analyze how they would move forward. It appears that Colorado is taking the lead in the Hyperloop race. The company says it has entered into a public-private partnership with the Colorado Department of Transportation to begin a feasibility study there. Hyperloop One also plans to work with an additional 11 finalist teams on their proposals.
Elon Musk’s Hyperloop
Hyperloop One isn’t the only game in town. Tesla founder Elon Musk has been pushing for a Hyperloop system for years. He’s working on his own Hyperloop system with his tunnel-digging company called “Boring Company.” He’s tested a system at more than 200 miles per hour, and has reportedly received a verbal approval from the Trump Administration to build an underground Hyperloop system from New York, to Washington, D.C.
Impact on Real Estate
People who live near a system like this would have a lot more options as to where they could work, or even go out to dinner, or shopping. They wouldn’t have to live within a 30-minute driving distance to any urban location. They could live 200 miles away and commute to work in less than a half hour. Properties typically get a boost in value when they are close to public transportation, but a system like this could turn otherwise low-value real estate into pure gold.
If the Miami-Orlando area builds an Hyperloop type system, people in Southern Florida could hop on a pod for a trip to Disneyland. Or maybe the Miami folks are landlords and they want to check on their investment properties in Orlando, Tampa, or other locations in the northern part of the state. They could do that with the Hyperloop. Miami also has a busy port, and could use the Hyperloop for shipping. That could bring down the cost of transport, and make it much faster.
In the Midwest, the winning team wants to connect three major cities. Can you imagine going from Pittsburgh, Pennsylvania to Columbus, Ohio in just 14 minutes? Or from Pittsburgh to Chicago in a hair less than 30 minutes? That route actually goes through “four” states so the “Midwest Connect” team may have more of a challenge getting each state on the same page.
Concern about Hurricane Harvey’s effect on property values in Houston, Texas may become a moot point if the Hyperloop is built there, by a team called “The Texas Triangle”. Property values that got a good dousing from the storm may suddenly become golden opportunities. The link between Houston and Dallas would be great for both economies, and help people in Dallas get to the beach.
The “Rocky Mountain Hyperloop” team would expand the benefits of Denver in two directions, giving the mile-high city an extended reach and boosting options for people in Pueblo, Colorado and Cheyenne, Wyoming. Among those options — a quick trip to Denver-area ski resorts in the winter.
Of course, the Hyperloop will not be up and running anytime soon. Although the idea is in the midst of a transformation from science fiction to a stunning new reality, there are plenty of hurdles to deal with. In addition to getting test runs up to speed, each location will require studies, permits, public hearings, land acquisitions, and financing. Pischevar says it could take decades to see our first Hyperloop system in operation.
But there are plenty of investors with faith in the viability of the Hyperloop system. Hyperloop One just raised an additional $85 million dollars from venture capitalists, according to The Verge. The company has raised a total of $245 million and is reportedly worth much more — in the neighborhood of $700 million. It has no revenue stream yet, but it has the glitter of gold for those investors.
This article was originally published on the Real Wealth Network on October 13, 2017.
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Carole Van Sickle Ellis is the editor-in-chief for Think Realty Magazine. You can reach her at cellis@thinkrealty.com.
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