Fort Worth Vacancy's Silver Lining
The bad news: Fort Worth CBD office occupancy dropped from about 93% a few years ago to 88%. (A high A-minus to a low B-plus, that would've affected our allowance as well.) The good news: if you're looking for a full floor of space, you have 34 opportunities, we learned at the Bisnow Fort Worth State of the Market event on Thursday at the Omni Fort Worth.
JLL managing director of the Fort Worth office Todd Burnette says that compares to the 'burbs, where there is only one full floor of space available and a Class-A occupancy of less than 2%. (Looks like someone couldn’t wait to Tweet what Todd had to say to the crowd of 300.)
As a result, there are six Class-A office buildings planned across the suburbs including the 150k SF spec project at Alliance. Clear Fork’s project at Edwards Ranch and Museum Place on 7th Street are both scheduled to start later this year, Todd says. It’s a landlord’s market with the rents going up in the suburbs. Space is something Todd understands; he was a soccer goalie at SMU. He was a four-year letterman and still has records that stand from his days there in the early '80s. “I may have been the shortest goalie in Division 1, but I was the quickest,” he quips.
TIG Real Estate Services principal Karen Simon (right, with colleague, Brenda Kindt) says the DFW area has about 7% vacancy for industrial with Fort Worth hovering around 4%. She says the 10k SF to 30k SF users are getting short shrift as very few developers have built projects to accommodate them. (They have an old carnival sign outside industrial buildings: you must be this many square feet to ride this building.) In her spare time, she designs rings and even has a company that produces them for her to sale.
AUI Contractors sales and marketing director Tony Rader (center, between Panther Real Estate Solutions’ Mark Presswood and Tony Presswood) says construction costs are increasing as concrete and sand prices are at a premium. Drywall costs are up 18%, too, he says. In the last 30 days, he’s had three architects call him because they can’t get their projects within budget as a result of the increases in the past year. Tony says AUI will deliver Tower 55 this fall and will announce a new hotel project in the next 30 days. Away from work, Tony and his wife like to go sailing in the summer on a 50-foot catamaran. Next trip: sailing to Grenada. (Just make sure you cut under that Bermuda Triangle... not that we're superstitious or anything.)
IPA Texas director Drew Kile (far left, with Republic Title’s Wilson Martin and Marcus & Millichap’s Bill Jordan) says the rising construction costs are putting a headwind in development. (Prices are building a wall around the opportunities to build a wall.) The costs are slowing the progress of some deals, which has some positive result in restraining overdevelopment, he says. We also learned that congrats are in order for Drew and his wife—they're expecting their second daughter in September.
Trademark Property managing director Tommy Miller (who earned many jealous remarks from his fellow panels for that rock star hair) says shopping centers have evolved since the recession. Before, they were all competing for the same tenants, which is no longer the case. He also anticipates three or four specialty grocers will plant their flags around Fort Worth in the coming year or two.
Event sponsor Pinnacle Property Group’s Jonathan Gilstrap and Tricia White remind us that the May 31 tax protest deadline is fast approaching. The commercial property tax team of consultants and litigators is ready to mitigate your tax liability, but you need to get started now.
Event sponsor WLS Lighting Systems’s Ken Bronstad (right, with RMC Construction’s Steve Wood) tells us the lighting design company has been manufacturing and sourcing lighting products for more than 40 years. WLS provides free lighting design/budgets direct to owners, designers, consultants, and contractors. But wait, there’s more: over the years, the firm has retrofitted or upgraded lighting in more than 6,000 shopping center parking lots. (Watch for day two of our big event coverage coming on Wednesday.)