Office Space: Pandemic Redefines Commercial Real Estate Industry

Office space. Will it become a thing of the past?

As more people work from home, what does that mean for the entire commercial real estate industry?

Experts are anticipating a lot of changes that could totally redefine the industry, especially as companies get a taste for how a work-from-home structure operates.

According to Global Workplace Analytics, a research-based consulting organization specializing in telework, a recent survey shows that we will see 25-30% of the workforce working at home on a multiple-days-a-week basis by the end of 2021.

Commercial real estate expert Stephen LaMure, owner of Dominus Commercial, said how the industry reacts to the pandemic should really be broken down into three major parts: office buildings, industrial and retail.

All three are experiencing some major changes, both in good and potentially bad ways.

“Right now, it’s a little bit of a wait and see. Especially with this uptick in COVID-19 cases,” said LaMure.

He works in Dallas’ design district and believes only 20 percent have come back to their offices in his area.

He said overall, the pandemic has really caused companies to rethink whether they want to permanently work from home or alter their office space.

“Most of them said they needed to redesign their space to be able to spread out,” he said. “A big part of our business is talking to companies about their values and their purpose and what their culture is. How do you get a space and work environment that supports that or projects that?”

In the last few months, some companies like Twitter and Square have already made the call to let some employees stay at home for good.

“These companies are really going to have to take a step back,” LaMure said. “How much space do you need? How many desks do you need? Now, they’re having to take a step back and say what does this really do for us? Is it necessary? Can we all work from home and not have this cost? Or if we can’t, what does it really need to be like?”

LaMure said as far as what he’s noticing, it’s not so much downsizing office space due to more people working from home but instead, companies are needing more space so that they can meet the CDC’s social distancing guidelines.

“I don’t think it’s going to be as dramatic as some people are saying. There are people saying ‘Oh this is the end of office space as we know it. I think it’s just the opposite,” he said.

LaMure elaborated, “I’ve interviewed over 100 tenants in the last 90 days and almost all of them – other than a small percentage – are saying the same thing. We need more space. So if you have 50 team members that are in 3×2 cubicles, you have to triple your space in order to get those cubicles separated by six feet.”

He said he’s noticing many larger companies are concerned about the liability issue for their employees.

“If they’re not following the CDC guidelines and some of their team members get sick or died, then there’s a substantial liability on that company so they’re going to really have to conform to those new standards,” he said.

LaMure clarified that office spaces were already drastically changing long before COVID-19.

“Twenty-five years ago, everybody had a private office or it was a large office. There was 250 to 300 square feet per person. We all kept paper files and had a giant fax machine,” he explained. “We’ve continued to get more and more dense, with more people per square footage than we used to have. Now, we’re more at like 100 square feet per person.”

Companies are re-evaluating their own spaces to ensure that people have the ability to social distance, especially for those who are unable to work from home permanently or indefinitely.

“What I’ve seen is that companies have found that certain people on their team do really well working from home and they’re more productive and more profitable. But certain people are not at all,” he said.

As for industrial commercial real estate, LaMure that’s doing really well because of shipping and supply-demand.

“There’s a lot more shipping going on. Manufacturing is coming back to the United States from outside of the country so the industrial segment is very strong, especially for DFW being centralized,” he said.

However, the future of the brick and mortar retail sector of commercial real estate is more up in the air. Businesses are either closing down because of the pandemic’s impact on the economy or their fate is in the hands of their renter.

“The retail market is certainly suffering. When you have restaurants that can only be at X percent capacity, they might not be able to make a profit themselves,” said LaMure. “The Paycheck Protection Program helped out but it only lasts for so long.”

NBCDFW. (2020, July 2). Office Space: Pandemic Redefines Commercial Real Estate Industry [News post]. Retrieved from https://www.nbcdfw.com/news/local/office-space-pandemic-redefines-commercial-real-estate-industry/2399509/

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There May Be CRE Opportunity Post-Coronavirus, If We Can Find Out What Anything Is Worth

The commercial real estate market is in limbo, with developers waiting to see if opportunities for low-interest rate refinancing and acquisitions bubble to the surface. But, the timeline for finding these opportunities in the post-COVID-19 landscape remains murky at best, especially as valuations are difficult to pin down. 

It’s likely to stay this way until the timeline for curtailing the impact of the coronavirus becomes more apparent, giving appraisers the data needed to make true property valuations, National Valuation Consultants Senior Managing Director Chuck Dannis and Dreien Opportunity Partners CEO Sam Ware said during Bisnow’s “Weathering A Downturn” webinar Tuesday. “Appraisers are just going to have to wait,” Dannis said. “They are going to have to look for other things than just sales [as part of their valuations], which appraisers normally do. I think it’s pretty naive to think that values are not changing as we speak.” A guidepost for what the COVID-19 downturn might look like is the 2008-2009 recession. But, there is one major difference between that economic meltdown and the COVID-19 crisis, Dannis said. While the ’08-’09 recession was caused by investors marking down assets and pushing up cap rates to deal with increased market risk, the coronavirus downturn is the result of market uncertainty over a disease that will end at some point. 

“What I think we are going to see this time is just a sudden and precipitous, unprecedented drop in net income in a lot of the property types — hospitality, student housing, senior housing and the restaurant business,” Dannis said. “This time I think we are going to have income shock … and so if, we don’t even change the rates, property values are going to come down.” Ware agreed that while on the surface cash flow and income disruptions devalue properties, the temporal nature of the COVID-19 crisis and the underpinnings of the economy make it difficult to predict a property’s value several months from now.  If an appraiser hypothetically completed a $200M valuation in December, the historic metrics for deciding value would likely show the same property’s value down by June because of the market disruption, Ware said. But with this downturn more of an economic delay than a financial disruption, Ware doesn’t believe true market value is lost, particularly when demand and supply were strong right before the crisis.  “I use the word pause because to me the word pause is a positive adjective. It’s a pause,” Ware said of the economy.  If there is one hidden boon in all of this madness, Ware, who specializes in office redevelopment, predicts developers may soon find opportunities to acquire assets at reasonable prices and to benefit from declining construction.  “I do see a pause in new construction for office buildings from this point forward,” Ware said. “I think existing becomes much more valuable, which I, of course, like the empties. I don’t like new construction.”

BizNow. (2020, April 7). There May Be CRE Opportunity Post-Coronavirus, If We Can Find Out What Anything Is Worth [Blog post]. Retrieved from https://www.bisnow.com/dallas-ft-worth/news/commercial-real-estate/the-new-world-order-of-cre-according-to-sam-ware-and-chuck-dannis-103803

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Real estate agents adapt to coronavirus with virtual tours, other creative ways to do business

Real estate companies are struggling to adapt to a new business environment with reduced person-to-person contact.

Most brokers and agents are working from home, and many are conducting business remotely.

Residential agents are giving virtual tours of properties and directing clients to online listings.

“We will be conducting virtual tours of Hall Arts Residences via Facetime and other comparable technologies,” Briggs Freeman’s Kyle Richards, who is marketing the new downtown condo tower, said in an email.

Tod Franklin of DFW City Homes said agents are looking for ways to protect buyers and sellers from coronavirus.

“I have many buyers and sellers that just can’t pause because they have immediate housing needs,” Franklin said. “Also many that don’t want to miss the low interest-rate opportunity.”

Even so, almost half of residential agents say that buyer interest has decreased due to the coronavirus outbreak, the National Association of Realtors reported.

“The decline in confidence related to the direction of the economy coupled with the unprecedented measures taken to combat the spread of COVID-19, including major social distancing efforts nationwide, are naturally bringing an abundance of caution among buyers and sellers,” Realtors chief economist Lawrence Yun said in a statement.

Commercial agents are adapting, too.

More than half of the Realtors associations’ commercial members have seen a decline in leasing clients.

And Yardi Systems’ reports that traffic to the firm’s apartment finding website dropped by a quarter in the last week.

“Our professionals, working hand-in-hand with our clients, are finding ways to manage through these difficult days by modifying meeting protocols, touring properties with smaller groups and finding ways to keep moving forward,” Brett White, executive chairman and CEO of Cushman & Wakefield, said in a letter to clients.

“At the same time, we are adhering to important public health restrictions and recommendations. “In some jurisdictions, we know that business-as-usual simply isn’t possible and that managing through this disruption is a daily undertaking.”

Dallas Morning News. (2020, March 23). Real estate agents adapt to coronavirus with virtual tours, other creative ways to do business [News post]. Retrieved from https://www.dallasnews.com/business/real-estate/2020/03/23/property-agents-adapt-to-business-with-coronavirus/

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Dallas developer plans 2,000-plus homes for $950M master-planned community in Midlothian

A Dallas-based real estate developer has acquired 966 acres of land in Midlothian for a $950 million master-planned residential community with thousands of homes.

Hanover Property Co. on Monday announced the acquisition of the land at the northeast corner of Highway 287 and Walnut Grove Road, about 30 minutes south of downtown Dallas. 

Plans for the property include 2,000 single-family homes priced from the $300,000s,160 townhomes, 26 acres of commercial and 42 acres of industrial development. Pre-development is underway, and the first homes will be available by early 2022, the company said.

The development’s name and builders for the first phase, which will consist of 350 homes, will be announced later this year.

Ben Luedtke, executive vice president of Hanover, said the company has been working with the city of Midlothian for the last year on planning the development.

“The city is a great partner, and the result is the first true master-planned community of this size in Midlothian,” Luedtke said in a prepared statement. ”There is substantial tree coverage, gentle rolling hills, and a 50-acre lake. We will thoughtfully enhance the natural beauty that is already in place.”

Hanover is developing multiple master-planned communities in North Texas, including Somerset (487 acres, 1,105 lots) and M3 Ranch (720 acres, 1,571 lots) in Mansfield; and Berkshire (358 acres, 641 lots) and Wellington (610 acres, 1,680 lots) in north Fort Worth. The company is also the developer of the Mira Lagos community in Grand Prairie.

Midlothian has been one of the most dynamic growth areas of the southern DFW new home market, with 511 housing starts last year, Ted Wilson of market research firm Residential Strategies said.

“As land and development costs have risen, it has become increasingly challenging for developers to produce lots that can translate into the $275,000 to $400,000 home price — the historical ‘sweet spot’ for Midlothian new home construction,” Wilson said in a statement.

JLL Capital Markets Managing Directors Michael Swaldi and Larry McCorkle and Director Nick Hayden marketed the property on behalf of the seller, ECOM Real Estate. JLL International Director Paul Whitman represented Hanover. 

The project team also includes MESA as the landscape architect and land planner and LJA Engineering.

Midlothian will also be the site of a massive data center that Google is building. The company is putting $600 million in the Ellis County facility and is creating construction and ongoing jobs at the site.

Dallas Business Journal. (2020, February 4). Dallas developer plans 2,000-plus homes for $950M master-planned community in Midlothian [Blog post]. Retrieved from https://www.bizjournals.com/dallas/news/2020/02/04/hanover-property-co-midlothian.html

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Hanover Midlothian Master Planned Community

Big Industrial Developments In DFW Show Ongoing Confidence In Market’s Bandwidth

As 2019 comes to an end, industrial spec building and acquisition activity in DFW remains red-hot with investors and developers prowling to develop large warehouses, urban infill and other industrial commercial real estate product. Big Industrial Developments In DFW Show Ongoing Confidence In Market’s Bandwidth Flickr/Mark Hunter DFW is building more industrial assets than any other U.S. metropolitan area, with 39M SF of industrial space under construction, according to a recent CoStar report. Large additions to that pipeline keep coming, such as Black Creek Group’s Monday groundbreaking on 570K SF in South Fort Worth. “We have evolved into a world-class industrial market when you look at all of the connectivity we have with the airport, the rail infrastructure we built over the last 15 years, with the [International] Inland Port [of Dallas] and Alliance Airport … and just the confluence of highways that have made DFW one of the rising stars of the industrial market,” CoStar Director of Market Analytics Paul Hendershot said. With such strong demand, the DFW industrial market is on course to reach 20M SF of net absorption for its fourth year in a row, JLL reported in its third-quarter Industrial Insight report. Demand for space in industrial continues to offset supply increases with the region’s total vacancy rate hovering at a modest 6.6% in Q3, JLL said. While some asset classes may fear oversaturation and supply fears heading into a new year, investors and developers believe DFW’s industrial market faces a much longer and safer runway even if the economy slows in 2020. “My bet is over the long-term there is still much more industrial that needs to be built to service the way people are going about their lives,” Fort Capital Chief Investment Officer and CEO Chris Powers said. “For everything that is brought online, it needs to pass through some type of industrial facility to get to its final destination.” Fort Capital has been buying up Class-B industrial buildings in urban core areas. This month it acquired 10 light industrial buildings totaling 455K SF in the Great Southwest Industrial submarket in Arlington, and has stated its intention to buy millions more square feet in the next two years. Big Industrial Developments In DFW Show Ongoing Confidence In Market’s Bandwidth Courtesy of M2G Ventures Rendering of M2G Venture’s North Quarter 35 Industrial Development in North Fort Worth. The most recent new project announcement came Monday from M2G Ventures, which showed it remains optimistic about North Fort Worth’s industrial potential. The development company, which is more widely known for redeveloping The Foundry District near Downtown Fort Worth, plans to build a 640K SF Class-A industrial complex with four buildings at 10705 North Freeway in Fort Worth, near the intersection of Interstate 35 and Golden Triangle Boulevard. Known as North Quarter 35, the project is a short drive from DFW International and Alliance Airport. The areas within 5 miles of each airport have been the hottest industrial development markets in the Metroplex. M2G Ventures co-President Jessica Miller Essl said the building’s look, conceptualized by GSR Andrade Architects Inc., is modern and chic with a design aesthetic that is more polished than a standard run-of-the-mill industrial building. M2G Ventures is not the only developer betting on Fort Worth. Denver-based Black Creek Group just launched construction on a three-building industrial complex known as Carter Logistics Center in South Fort Worth. The site, located near Interstates 35 West and 20, will bring another 569K SF of industrial space into the firm’s current DFW holdings, which total approximately 6M SF. “With the South Fort Worth submarket boasting strong industrial fundamentals and solid demand for modern, Class-A space, we believe Carter Logistics Center is well‐positioned for success and we continue to look for developments like this to increase our presence in such a solid market,” Black Creek Group Senior Managing Director for the South Central Region Mace McClatchy said in a press release. Black Creek Group’s three industrial warehouses will feature 32-foot clear heights and at least 180-foot truck courts, the company said. While spec building requires a certain amount of risk-taking, the data available shows new product is unlikely to face market volatility on the industrial side. “I would consider us a growing market, but not an overheated market,” Hendershot said. “It’s not immune to economic cycles, but [industrial has] definitely benefited from e-commerce and the restructuring of retail more than any other sector, and I think that will continue to help bolster this sector in the near and the long term.”

Bisnow. (2019, December 4). Big Industrial Developments In DFW Show Ongoing Confidence In Market’s Bandwidth [Blog post]. Retrieved from https://www.bisnow.com/dallas-ft-worth/news/commercial-real-estate/how-big-

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DFW 2020: Long CRE Cycle Continues, Election Time Slowdown Expected And The Rise Of Midtown And 635 Corridor

The Dallas-Fort Worth commercial real estate market thrived on capital liquidity and a strong local economy in 2019. Now, 2020 is expected to bring even more commercial growth in DFW, with interest rates remaining low and demand for North Texas real estate going strong. DFW 2020: Long CRE Cycle Continues, Election Time Slowdown Expected And The Rise Of Midtown And 635 Corridor Bisnow Scott Beck A group of top developers and real estate executives told Bisnow that 2020 will bring a 10th inning to the long-winded real estate cycle that started close to a decade ago. However, there will likely be some drag mid-year as the volatile politics of election season rear their head after July. “I think the first half of the year, you are going to see a bull market related to real estate,” Beck Ventures CEO and President Scott Beck said. “You’ve seen some of the banks pull back slightly, and I think that’s healthy … some areas have had a tremendous amount of overbuilding, especially in the apartment residential space in urban core areas.” But Beck and other developers speaking at Bisnow’s DFW 2020 Forecast event Dec. 17 expect history will repeat itself with some dampening of activity in the second half of the year. “It’s an election year, so I think what you will find is a lot of people are more eager to place capital in the first half of the year,” Fort Capital CEO Chris Powers said. “I think there will be a lot of speculation about a coming slowdown in the second half of the year.” The slowdown could be driven by developers and investors waiting to see whether our nation’s leadership will change and what that might mean for policies. “Typically, with an election, there is uncertainty, and uncertainty usually drives developer perception about the marketplace,” Beck said. DFW 2020: Long CRE Cycle Continues, Election Time Slowdown Expected And The Rise Of Midtown And 635 Corridor Courtesy of Dallas Midtown Dallas Midtown rendering But excluding that possible dip, DFW executives are confident in market fundamentals across asset classes. On the retail front, Dallas-based Goodwin Commercial founder and CEO Pam Goodwin is confident brick-and-mortar retailers will have a strong year if they focus on innovation and consumer experience. “With there being so much capital out there and the interest rates at the lowest [level] they’ve ever been, I still say 2020, and even 2021, will be a booming year for multifamily, senior living and retail if it’s innovative,” Goodwin said. The industrial market in DFW also is expected to remain strong as demand for last-mile delivery locations and e-commerce make distribution-focused assets in urban environments a top priority, Dalfen President and Chief Investment Officer Sean Dalfen said. “Whether there are tailwinds in the market or headwinds in the market, I think there is going to be increased demand in the near and long term for industrial,” Dalfen said, citing e-commerce delivery demand as a catalyst for industrial’s long-term strength in DFW and nationwide. Even those who foresee some slowdown in 2020 predict a more controlled drop-off inactivity rather than a rapid decline. “I think next year we may see some submarkets lose a little bit of ground, but it won’t be dramatic,” Lang Partners Vice President of Development Cindy Harris said. “[Multifamily] occupancies are still in the 95% range, so if they drop a little bit, I don’t expect it to be problematic, but I do think we will see a little bit [of a drop off] because a lot of supply will come over the next year or so.” DFW 2020: Long CRE Cycle Continues, Election Time Slowdown Expected And The Rise Of Midtown And 635 Corridor Wikipedia Commons/Robertb-dc at English Wikipedia I-635 in Dallas. I-635: The New Center Of The Metroplex? In 2020, more North Texans will continue to choose homes in far-flung suburbs to the east, north, and west of Downtown Dallas, CRE experts say. As this expansion happens, Beck is confident his firm’s Dallas Midtown development atop the old Valley View Mall will create the new center of the Metroplex near I-635. “The location of the Midtown project … is in the center of the population of the Metroplex, which is precisely why we are focused on large urban, infill office buildings,” Beck said. From Beck’s point of view, as more residents move to the outer reaches of the Metroplex over the next two decades, the redeveloped Dallas Midtown project will offer luxury offices in what will become the most centralized office market for all DFW communities. “As we move further out over the next 10 to 15 years, we will end up with this rubber band effect, basically pulling consumers and office users back toward the center of the population density,” he said.

Bisnow. (2019, November 26). DFW 2020: Long CRE Cycle Continues, Election Time Slowdown Expected And The Rise Of Midtown And 635 Corridor [Blog post]. Retrieved from https://www.bisnow.com/dallas-ft-worth/news/commercial-real-estate/how-big-

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Big D Is Becoming Coveted Esports CRE Market As Envy Gaming Sets Up HQ In Victory Park

Dallas-based Envy Gaming Inc., which runs esports teams — groups that engage in video game competitions — is moving its training center and headquarters to a 21K SF facility in Victory Park. Big D Is Becoming Coveted Esports CRE Market As Envy Gaming Sets Up HQ In Victory Park Unsplash/Florian Olivo Esports, which takes place in the virtual world, is a lucrative professional sport right here in the real world. It is increasingly taking up commercial real estate, and it is growing in DFW. The numbers internationally show a groundswell of support for video game competitions. Global esports revenue hit $865M in 2018 and is expected to grow to $1.79B by 2022, according to Statista. Envy Gaming oversees league teams, such as Dallas Fuel, a member of the Overwatch League, and the Dallas Empire Team in the Call of Duty League. The groups play other esports teams around the world, and the new HQ is in a strategic location for these teams that are expected to continue playing large events at the local and international level. The new Envy headquarters and training facility will be located near one of Dallas’ prime sporting hubs, Victory Park, at 3030 Olive St. Cushman & Wakefield’s Ryan Hoopes and Tom Sutherland helped Envy Gaming find its new spot. Envy Gaming, which has been in temporary space since moving to Dallas from Charlotte, North Carolina, a few years ago, is now looking for space to hold larger conventions in DFW, potentially resulting in more local commercial real estate shopping on Envy’s part, Hoopes said. “Dallas is definitely becoming a hub for esports; and it’s not just the esports arena in Arlington or some of the esports groups that have relocated here,” Hoopes said. “Esports is moving very quickly in the direction of what we would call geo-based competition … that is leagues that have teams that are geo-located such as the Dallas area.” Hoopes, who has followed the sport extensively, said investors view Dallas as an emerging mecca for esports because of its demographics, corporate profile and massive growth in the past decade. DFW also has the type of real estate development that is attractive to the industry. “The type of environment that esports would thrive in would be more of a mixed-use development that has a significant arena component to it,” Hoopes said. “Think anywhere between 6,000 to 8,000 seats in an actual sporting arena that has the type of infrastructure … any sporting arena would need.”

Bisnow. (2019, November 3). Big D Is Becoming Coveted Esports CRE Market As Envy Gaming Sets Up HQ In Victory Park [Blog post]. Retrieved from https://www.bisnow.com/dallas-ft-worth/news/commercial-real-estate/how-big-d-became-coveted-esports-cre-market-as-envy-gaming-sets-up-headquarters-center-in-victory-park-101603

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DFW Brewery Locations Turn Neighborhoods Around

Dallas leads the four-pack of Texas cities when it comes to craft brewery locations.

DALLAS—While Labor Day officially marks the end of the summer picnic season, the Texas climate makes outdoor barbecues possible most of the year and Texas breweries will finally be able to legally sell beer-to-go now that House Bill 1545 has officially passed. With its recent passage, more entrants to the craft beer scene are expected, increasing competition and revenue for craft breweries across the state which has been previously hindered by restrictive laws surrounding alcohol sales.

The passing of the beer-to-go bill is one of many positive legislative changes the industry has seen in recent years, increasing awareness, competition and sales of Texas craft beer. And, Texas breweries are getting greater exposure nationally, thanks to the production of quality product, acquisitions and partnerships, according to a recent study by JLL.

Milton Black, JLL associate, concurs that Dallas brewery locations have made a significant local impact.

“When you look at a map of all the breweries in the metroplex, most of them cluster in and around the urban core. It’s not until you get out towards the suburbs where you generally see one or two breweries serving each community,” Black tells GlobeSt.com. “Due to the density in the urban core, breweries tend to open in edgy, emerging submarkets. They set up shop between quasi-industrial properties and areas with food, beverage and entertainment, where the buildings are cheap enough for small business owners to afford and accommodate the unique equipment. It also allows for a creative buildout and ability to customize the tap room. Having a successful brewery in these neighborhoods spurs more investment in the surrounding properties, in turn driving more traffic to the area.”

In Dallas/Fort Worth, Deep Ellum Brewing Co is a well-known brewery with a 2018 production of 45,466 barrels. It is known for Dallas Blonde 2. Another brewery, Rahr and Sons Brewing, had a 2018 production of 18,500 barrels. It is known for Rahr’s Blond 3. A third brewery, Community Beer Co., had a 2018 production of 16,791 barrels. It is known for Mosaic IPA.

Blake Rogers, JLL senior associate, says craft brewing has also impacted Fort Worth.

“Craft beer has continually impacted and adapted our social and commercial landscape here in Fort Worth,” Rogers tells GlobeSt.com. “Rahr brewery began in 2004 in what is now known as the Near Southside District of Fort Worth. At that particular time, Rahr’s Saturday brewery tour and tasting was the only reason to go into that part of town. Now the Near Southside is a vibrant renewed district, and the brewery continues to be a lively destination for a few Saturday afternoon suds with friends and live music. A few other brewers have followed a similar template to this model, and they continue to provide excellent social settings in Fort Worth.”

Texas now has more than six times the number of active beer production licenses than at the beginning of the decade. However, the state continues to rank 30th in economic impact per capita and 46th in number of breweries per capita in the US.

GlobeSt. (2019, September 8). DFW Brewery Locations Turn Neighborhoods Around [Blog post]. Retrieved from https://www.globest.com/2019/09/08/dfw-brewery-locations-turn-neighborhoods-around/?slreturn=20190830112346

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Fort Worth Is Growing Faster Than Dallas Is

Fort Worth is growing faster than Dallas. Over at CityLab, researcher and professor Richard Florida teamed up with a few people to comb the U.S. Census’ annual American Community Survey, which acts as a year-over-year comparison tool to see how our cities are growing. They analyzed data from 2012 to 2017. Interestingly, Fort Worth, the city that had a come-to-Jesus moment just last year about how to attract and retain millennials and people of color, was the third fastest growing city in the nation over that period of time, trailing only Seattle and Austin. That follows the May release of Census estimates that showed Fort Worth gained 20,000 people last year compared to Dallas’ 2,000.
Florida finds that the top cities on the list are growing 10 times faster than the slowest-growing ones. Fort Worth’s growth rate is 12 percent; Dallas’ is 8.1 percent. Also of note: the Dallas-Fort Worth Metro Area is adding people at a rate that pegs it as seventh among metros at 11.3 percent, showing that our region is buoyed by the growth of our neighbors rather than its largest city.
Fort Worth’s employed population jumped up by 21.5 percent. That was good enough for third in the country. Dallas is 20th.  So what gives? The actual data show that Fort Worth has added more than 100,000 people from 2012 to 2018: 781,059 in 2012 to 895,008 in 2018. In the past, most of the population growth happened in its walkable neighborhoods. You started seeing this even in the last decade. For instance, from 2000 to 2010, West 7th tripled in population, going from 904 to 2,706 residents. It’s also spent time building out the Near South Side and Magnolia Avenue, and old warehouses are getting turned into apartments along Main, south of downtown. It will be interesting to see how the growth of those neighborhoods has guided its population jump.
In Fort Worth’s 2018 economic development plan, the city learned it needed to better harness its colleges and universities and turn the city into a research hub for healthcare, life sciences, engineering, and energy. The tax base is upside down too, with 60 percent of it coming from property taxes and 40 percent coming from commercial. There is still plenty of room to grow in Fort Worth, in particular the Alliance area and the land around Clearfork along the Chisholm Trail Parkway. That, more than anything else, may be the reason we’re seeing such spikes. Cheaper, more prevalent land.
If anything, the employed population increase that Florida highlights should be great news for city leaders there. Maybe they’ll help flip the tax base. Florida will dive into college graduates next, which should give even more insight into the type of people who are flocking here. But back in Dallas, it’s important to recall Peter Simek’s dive into these very numbers. He found lots of migration among millenials from Dallas to neighboring counties. In fact, between 2016 and 2017, Dallas actually had a net population decline of 17,660.
“These numbers don’t suggest a city that is attractive and vibrant, but rather a city whose services, amenities, and culture are narrowly attractive to only a subset of the population. Twenty- and 30-somethings may like Dallas; families with children and seniors would rather not live here.”
And that is something Dallas will have to reckon with.

DMagazine. (2019, August 23). Fort Worth Is Growing Faster Than Dallas Is [Blog post]. Retrieved from https://www.dmagazine.com/frontburner/2019/08/fort-worth-is-growing-faster-than-dallas-is/?ref=feat-sect

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Fort Worth’s Mission To Attract HQs Scores Another

For the third time in five months, a company with an international platform has chosen Fort Worth as the site of its U.S. headquarters.

Global electronic component distributor Chip 1 Exchange is moving its U.S. headquarters from Southern California to Fort Worth, where it will occupy a lease-to-build 15K SF building at 701 East Eighth St. “With recent company growth, Chip 1 looked at multiple locations when choosing the best fit for expansion,” Chip 1 Exchange Chief Operating Officer Damon Pouya said in a statement. “Based on the economic growth potential and demand in workforce, Fort Worth will be a great fit for our expansion into Texas. Fort Worth offers ideal resources and plenty of eager, willing employees looking to learn and grow in an emerging technological marketplace.” “They fully expect to be hiring a couple of hundred people over the course of the next couple years,” Fort Worth Chamber of Commerce Senior Vice President of Business Attraction and Retention Chris Strayer said. “They realize that the growth potential is here, and they want to set themselves up for the future growth of the company and that’s why they came to Fort Worth.” The company, while a smaller player in the Fort Worth relocation game, is part of a trend where the city is breaking free of its humble shell and aggressively wooing corporate tenants. Korea-based conglomerate KT&G USA Corp. inked a 10-year, 73K SF lease in April to plant its U.S. headquarters and distribution center in North Fort Worth. In March, $6.5B farm store retailer Mid-States Distributing Co. announced plans to move its corporate headquarters from Minneapolis to 40K SF in the Mercantile Center in North Fort Worth. The city last year closed on nine projects involving companies that did not previously have a presence in Fort Worth, according to Chamber data. So far this year, the city has already finalized 12 such projects. These moves to Fort Worth are not a coincidence. City officials and the Fort Worth Chamber of Commerce have been actively targeting companies to move to the city for nearly two years. The mission began when the city of Fort Worth had a dilemma on its hands. Known for its stockyards, revitalized Downtown area, artistic amenities and laid-back vibe, the city in 2017 possessed all the amenities needed to woo companies and businesses. But research gathered by city officials and consultants concluded Fort Worth, while qualified in mostly every other way as a corporate relocation destination, lacked the global name recognition to compete for corporate relocations. The report concluded the city would lose out to nearby competition unless “the community makes a whole-hearted commitment to competing for projects.” The city of Fort Worth, the Fort Worth Chamber of Commerce and other city stakeholders responded to the challenge with an aggressive strategic plan to promote the area’s value to relocating and existing companies to drive commercial development. “One thing that both organizations spoke about when the prospective plans were released was the fact that historically we had been somewhat reactive to different types of projects that may be coming across our door,” Fort Worth Director of Economic Development Robert Sturns said. “We’ve really been trying to be much more aggressive and proactive and going out and looking at specific companies and drilling down on specific target areas, so it really is more of a strategic and selective process that we are trying to use to bring some of these companies in.” So far, the plan is working like a charm and Sturns said along with mainstay industries such as oil, energy, healthcare and manufacturing, Fort Worth sees emerging opportunities in life sciences, biotech and technology.

Bisnow. (2019, July 30). Fort Worth’s Mission To Attract HQs Scores Another Win [Blog post]. Retrieved from https://www.bisnow.com/dallas-ft-worth/news/commercial-real-estate/fort-worths-mission-to-attract-relocating-companies-scores-another-win-100125

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