Fort Worth: State of the MarketApril 23, 2014
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A. Lee Graham
Fort Worth built it, yet property managers are having trouble filling new downtown office inventory.
“We just added 6 percent [more space] to the Class A office market, so we’ve got room,” said Andy Taft, president of Downtown Fort Worth Inc., a nonprofit downtown advocacy group, offering his take on the local real estate market at the Fifth Annual Fort Worth State of the Market.
Presented by Bisnow Media, the event gathered Taft and eight other movers and shakers to share their perspectives on a panel discussion at the Omni Fort Worth Hotel.
“We’re working hard to get some prospects over to take a look,” said Taft, offering an otherwise upbeat outlook on the city’s real estate future.
Other panelists also painted a sunny picture of Fort Worth retail, multifamily and office development while acknowledging some challenges that lie ahead.
“We are now missing out on conventions because of space at the [Fort Worth] Convention Center,” said Johnny Campbell, president and CEO of Sundance Square, heartened by plans to expand that facility and add more downtown hotel inventory that he said is around the corner.
Only a few months after opening, the Westbrook and Commerce buildings at Sundance Square Plaza are 94 percent leased, Campbell said.
“The plaza has attracted some of that,” said Campbell. “The parking issue is something that we’re going to continue to deal with.”
Sharing that assessment was Todd Burnette, managing director of Jones Lang LaSalle’s Fort Worth office.
“One of the hardest things right now is parking. There’s a shortage of parking in some areas. Everyone, every company today is trying to get more and more people into a smaller space, so you’ll see those square foot ratios per person go down,” Burnette said.
Available parking challenges notwithstanding, downtown is beginning to enjoy a daytime retail renaissance, Campbell said.
“We wanted to have a more rounded retail experience. That’s been our goal for 30 some-odd years. What’s changed is we’re beginning to do some of those deals,” Campbell said of new and potential future retail tenants opening within the city’s urban core.
When it comes to downtown, apartments and hotels stand to outpace other types of development, Taft said.
“We’re seeing a lot of heat in multifamily and hotel markets lately. I think we’ll probably see construction activity heaviest in multifamily and hotel,” Taft speculated.
Meanwhile, the developer behind the WestBend, Waterside and Alliance Town Center developments in Fort Worth reported a robust, yet rocky real estate market.
“Demand is pretty strong in Texas, but the overall demand for retail is not what it had been pre-bubble or pre-recession,” said Tommy Miller, managing director of Trademark Property Co.
Financing is arguably the greatest challenge to launching new projects, said Stephen Coslik, chairman of The Woodmont Co.
“The toughest challenge is financing,” said Coslik, whose firm is constructing a 200,000-square-foot specialty project in Southlake near Southlake Town Square.
Coslik said banks nationwide are demanding 30 percent to 40 percent equity before approving financing.
“That’s a tough, tough deal to put together,” Coslik said. “You have to have a lot of equity now.”