XTO Energy already has buyers for two of its Fort Worth buildings

June 19,2017

By Sandra Baker

XTO Energy, which announced plans on Friday to move 1,600 employees from Fort Worth to an Exxon Mobil campus near Houston, has already lined up buyers for two of its Fort Worth buildings.

A former Swift & Co. building in the Fort Worth Stockyards, at 600 Exchange Ave., is under contract with a sale expected to close this fall. The buyer has not been disclosed. It was listed for sale earlier this year for $5.4 million.

Also, the 50,000-square-foot building at 801 Grove St., on the east end of downtown, is under contract to be sold to the Fort Worth Transportation Authority. The T plans to move its headquarters to the building, which is near the Intermodal Transportation Center.

Laura Hanna, a T spokeswoman, said that move is being planned for a couple of years from now. The T has its main offices in Burnett Plaza downtown. The contract will close by the end of the month, she said.

XTO has used the Grove Street building for document storage, said Suann Guthrie, an XTO spokeswoman.

In announcing the relocation to Houston, the company said it would be done in phases, by 2020, to both support business continuity and to minimize the economic impact on Fort Worth, particularly in regard to real estate. XTO plans to keep 350 employees in Fort Worth and keep one of its seven buildings.

“We’ve indicated with the mayor and the chamber that we want to work with them on an effective transition for the highest and best usage for the downtown buildings,” Guthrie said.

The XTO office buildings, though, will come on the market at time when the vacancy rate downtown is about 10 percent. Some of the more recent space to hit the market are in three high-rise office towers:777 Main, Bank of America tower, and the former D.R. Horton Tower in Sundance Square.

The future use of XTO’s four core buildings, the W.T. Waggoner, 810 Houston St.; Bob R. Simpson Building, 711 W. Houston St.; Petroleum Building, 210 W. Sixth St., and 714 Main St., the former Transport Life insurance building, will depend on who buys them, said Jack Huff, principal of Transwestern real estate brokerage in Fort Worth.

Those buildings have smaller floor plates, which make them unattractive for a corporate relocation, Huff said. However, what does make them desirable are the renovations and finishes to them, he said.

“That’s just because Bob Simpson liked old buildings and loved renovating them,” Huff said, referring to one of XTO’s founders and the company’s CEO before its sale to Exxon in 2010. “Those are Class B buildings that are as close to a Class A building as you can get. There’s a high probability those buildings will end up in the hands of investors who will convert them to multitenant buildings.”

One of the last large chunks of office space to come on the market was in 2000 when Fort Worth-based UPR was acquired by Anadarko in Houston, opening up about 530,000 square feet in 777 Main. The space was eventually sublet by the Carter Burgess engineering firm. That company was later acquired by Jacobs Engineering, which still has some space in the building.

Andy Taft, president of Downtown Fort Worth Inc., a downtown advocacy organization, said the buildings will open up a great deal of opportunity. He sees them being reused for office space, but also for hotels, apartments and condos.

“I’ve already started getting calls,” said Taft, who often speaks with investors and developers.

“Downtown Fort Worth has more opportunity now to reuse those buildings than we ever have,” Taft said. “There’s high demand for multitenant users. The buildings are well located. That’s very significant for the re-use of those buildings.”

Staff writer Max Baker has contributed to this report.