Despite a slowdown in the office market, downtown Fort Worth remains an active real estate market fueled by projects such as the Texas A&M campus and major expansions at the Fort Worth Convention Center and the Omni Hotel.
“Downtown Fort Worth has about $1.3 billion in development going on right now,” said Mike Berry, president of Hillwood, the developer of Alliance Airport. “I haven’t done a U.S. major city central business district comparison, but I doubt there’s any other city in the country that currently has $1.3 billion of new investment in their central business district.”
Berry spoke as part of a panel at the 2024 Real Estate Forecast event Jan. 25 at Texas Christian University. The annual event is sponsored by the Real Estate Council of Greater Fort Worth.
In June, Texas A&M broke ground on a $150 million, eight-story structure near the system’s law school at 1515 Commerce St.
Berry said that development, plus the $95 million expansion of the Fort Worth Convention Center, the $217 million expansion of the Omni Hotel Fort Worth and the soon-to-open Deco 969, a 27-story luxury residential tower, are fueling interest in downtown, particularly on the southeast side.
Hillwood made news in October when the firm made its first acquisition in downtown Fort Worth: a city block from Oncor. The site is just north of the Texas A&M buildings.
The property is bounded by Sixth and Seventh streets to the north and south, and Calhoun and Jones streets to the east and west. There are currently two buildings and parking areas on the site that Oncor has owned for decades.
Berry said Hillwood doesn’t have a specific development plan for the location yet.
“It will be demand-driven,” he said.
At the moment, those market demands for downtown are primarily residential, Berry said.
“I think the driver downtown is going to be residential versus office,” Berry said. “Quite frankly, unless a company shows up and drops in one of our laps, nobody’s financing a spec office building today in the suburban markets, much less in the urban core.”
Berry said the project could be some sort of residential, high-end hotel combination.
“I would say residential would be at the top of the list of the lowest hanging fruit, asset class-wise,” he said.
Cannon Camp, executive vice president at JLL in Fort Worth, said the office market, which has traditionally been the driver in downtown markets, is weak this year.
“I think all of this development has never really been more reliant on retail and multifamily to have success,” he said.
Camp said office projects that are built surrounded by big parking lots are not making sense in the current economic and social climate.
“People can get to the office and a lot of places, but if they can walk to restaurants, or if they can have their employees live above the office or adjacent to the office and make it easy. It’s just better for that company,” he said.
Downtown has a lot of big projects starting to take shape, he said. Along with the projects on the east side of downtown, there is the redevelopment of the former Central Library site by Dart Interests and 3L Real Estate out of Chicago, which purchased the Oncor building and plans to redevelop it as a residential property.
“I think downtown and going west is extremely exciting,” Camp said of submarkets in Fort Worth. “There’s a dozen projects that are in the pipeline that we would love to see get built, and I think they will.”