TEXAS SNAPSHOT, MAY 2008

Fort Worth Office Market

Wright

The Fort Worth, Texas, office development market is experiencing an unprecedented boom in office construction, according to Chris Wright, senior associate with Stream Realty Partners in Fort Worth. “The available supply increase should be short lived, as Fort Worth is poised for a run in new leasing,” he adds.

The majority of development in Fort Worth is taking place on the western edge of Sundance Square and into the West Seventh Street area. “This area has the closest proximity to the amenities of downtown Fort Worth, with the most abundant available land and office development area,” Wright says.

Perhaps the most important redevelopment that downtown Fort Worth has ever seen, City Place is a more than 800,000-square-foot project on the former Tandy/Radio Shack Campus. “The City Place development, which will feature office and retail space, offers an outstanding location adjacent to Sundance Square with all its amenities, including dozens of restaurants, shops and the four-star Worthington Hotel next door,” Wright says. “City Place will be the most prominent luxury mixed-use development in Tarrant County.”

PNL Companies, the most recent  developer to the Fort Worth area, is developing City Place. “They purchased the former Tandy/Radio Shack Campus in 2001 and have been redeveloping it since 2005 into the new City Place development,” Wright says.

There are several major oil and gas companies absorbing space in the Fort Worth central business district (CBD). Most notably, Cheaspeake Energy just bought the Pier 1 Building just west of downtown. In terms of new leases, Range Resources Corporation has taken 80,967 square feet, First American Payment Systems has signed on for 63,326 square feet and Legacy Texas Bank has taken 12,527 square feet at Two City Place.

Currently, rental rates for Class A office space range from $24 to $30, plus electricity, with an average of $24.88. “According to the most recent CoStar statistics, Fort Worth CBD vacancy was 9 percent at the end of the first quarter of 2008. This is the lowest vacancy rate of any major submarket in the Metroplex,” Wright says.

The area immediately west of the Fort Worth CBD will be the place to be in the foreseeable future, according to Wright. “The Fort Worth CBD will continue to be one of the most stable and dynamic office markets in the U.S., despite the recent downturn in the global economy,” he says. “The growth of the Barnett Shale [considered to be one of the largest — if not the largest — onshore natural gas field in the U.S.] in the region has brought billions of dollars to the economy and will continue to ensure that the Fort Worth office market remains strong.”

— Chris Wright is senior associate with Stream Realty Partners LP in Fort Worth, Texas.

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