Yes hang the sheetrock first then put up the track.
Sheetrock the soffit or boxed area it will look nicer and will be cleaner than doing with tile.
I have only done a couple small areas - if you are a decent carpenter you can do it, but it's better to sub it out.
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Some guys they just give up living
And start dying little by little, piece by piece,
Some guys come home from work and wash up,
And go racin' in the street.
Bruce Springsteen - Racing In The Street - 1978
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