TEXAS SNAPSHOT, OCTOBER 2006

Fort Worth Office Market

Simon

Downtown Fort Worth is seeing office activity take off with several new developments underway. For example, a new, 16-story Class A office tower named The Carnegie will be located at the corner of Third and Lamar streets, which currently is a parking lot across from the central Fort Worth Library. The building, which is named after Fort Worth’s original Carnegie Library, will begin construction in January. EOG Resources Inc., an oil and gas exploration company, has already committed to 50,000 square feet, and retail will be planed on the bottom floor. Additionally, a new mid-rise office building, which will house the State National Bank, is being built on Seventh Street in the downtown area, as well as a new parking garage.

The housing market in Fort Worth is booming, generating the need for more retail and office product. Numerous apartments, condominiums and homes are being built in both downtown and just west of downtown area, which include the redevelopment of the cultural district, according to Simon. “The old Montgomery Wards just west of downtown has been redeveloped into lofts to include new retail tenants such as Super Target, Marshall and Starbucks Coffee,” she says. “This type of development brings working and living opportunities to the downtown area.”

New to the Fort Worth market are developers The Weber Company and Margeaux Development. The Weber Company redeveloped the old Montgomery Wards, and Margeaux Development is building a big box and neighborhood retail center in West Fort Worth in close proximity to the Ridgmar Mall, as well as new upscale single family and multifamily developments. 

The oil and gas companies such as XTO are buying and absorbing much downtown office space. “This is due to the Barnett Shells Gas deposits in and around Fort Worth and surrounding counties,” Simon says.

Class A rental rates for office product in Fort Worth are ranging from $17 to $22.50, plus electric. It’s a landlord’s market, with no concessions being offered.

Vacancy rates are hovering around 4 percent to 4.5 percent in downtown. Outside downtown, vacancy is plus or minus 14 percent. “The low vacancy downtown is because gas companies have been taking so much space,” Simon says.

In the near future, the downtown submarket, near Westside, and the Alliance corridor are the areas to watch. “Fort Worth has a unique mixture of retail, office and residential in downtown and on the west side,” Simon says. “Alliance has major industry being brought to the area by the Perot family it has both a rail intermodal as well a commercial airport.”

— Karen Simon is executive vice president/managing director of the greater Fort Worth area for Bradford/ CORFAC International.

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