'Fort Worth Is Getting Those Deals.' Western Metroplex Benefiting From Available Land, Growing Population
July 27,2023
See full Bisnow article by Olivia Lueckmeyer here.
Commercial development is thriving on the west side of the Metroplex as companies seek to capitalize on available land and a burgeoning populace.
In downtown Fort Worth alone, there is $2.5B worth of development set to deliver over the next five to seven years. But other cities, such as Mansfield and Arlington, also have big projects in the works that are poised to put Tarrant County on the map.
“We truly believe that over the next 10, 15 or 20 years, Fort Worth and Tarrant County have a tremendous amount of potential for urban-infill type product,” Ryan Dodson, co-founder and managing partner of StreetRealty, said during a July 20 Bisnow event at Hotel Drover.
The industrial sector is one of the region’s most promising areas of growth due to the existing labor pool, road infrastructure and access to airports, said Forrest Cook, senior vice president of Stream Realty Partners.
Availability of land is another huge draw given the dearth of space on the east side of the Metroplex, he added.
“Fort Worth is continuing to pick up a lot of big users,” Cook said. “They will go and view South Dallas as a stalking horse, but overall right now, especially in the million-foot game … Fort Worth is getting those deals, even at a 50-to-75-cent rent premium.”
Competition among industrial developers has grown since the onset of the pandemic, with the number of players in DFW more than doubling since 2020, Cook said. This has made it harder to obtain lending, though the market will likely rightsize as challenges in the debt market push newcomers out of the game.
“We were living a little bit in La La Land, [industrial development was] very easy at that time to go and do, relatively speaking,” he said. “Now, we’ve gotten back to the fundamentals.”
Whether or not a project gets capitalized hinges on existing relationships, Cook said. Despite rising interest rates and waning liquidity, certain projects can still get funding, so long as the developer has a reputation for delivering high-quality projects.
“You can get a lot of things done, and there is capital — not only equity, but the whole capital stack is available,” said John Zogg, Goldenrod Cos. president of the Southwest region. “You just have to work harder to get there, and you better have a good project with good design in the right location.”
A strong lender relationship and proven track record of success paved the way for The Crescent Fort Worth, an 800K SF project in the cultural district that will eventually include a 200-key hotel, two office buildings and a 180-unit luxury apartment tower.
“When times like this happen, we at Crescent aren’t that disappointed because it sort of keeps the riff-raff out,” said Joseph Pitchford, managing director of Crescent Real Estate Equities. “If we have great projects, we’re going to keep the attention of the community of architects, contractors, and debt and equity participants.”
Texas A&M broke ground in June on its $250M Fort Worth urban research campus, a move expected to unlock a slew of development and redevelopment opportunities downtown, said Andy Taft, president of Downtown Fort Worth Inc. The city is also in the midst of expanding its convention center, located adjacent to the campus, he added.
“These big catalyst projects present a lot of opportunity for people to nestle up next to those and use their creativity to leverage them,” Taft said.
Another Tarrant County city capturing the attention of investors is Mansfield, a fast-growing suburb located 20 miles southeast of Fort Worth. Admiral Legacy is in the process of developing the Mansfield Innovation Community, a 1M SF development that will include 240K SF of Class-A office and retail.
The hope is to create a regional hub where businesses, academics and investors can work alongside each other and share knowledge, Admiral CEO and President Ese Aihie said.
“This is going to place the city of Mansfield and Tarrant County as a whole as a regional center for cutting-edge technology,” she said. “It’s going to position us as a regional center for providing solutions to our nation.”
North of Mansfield in Arlington, new projects continue to spring up around Texas Live!, a $4B joint venture project between Cordish Cos., the Texas Rangers, the city of Arlington and Loews Hotels.
The Cordish Cos. was originally drawn to Arlington because of its desire to grow, said Jim Watry, chief operating officer of Texas Live! The group recently opened the first phase of a 50K SF business incubator inside the 200K SF repurposed Choctaw Stadium, which transitioned to a commercial and retail venue in 2019.
Other projects happening in the vicinity include One Rangers Way, a luxury residential development, and Loews Arlington Hotel and Convention Center, on track to open in January.
“In a few months, there will be three places you can call and get 1,200 rooms, 300K SF of meeting space and an airport 10 minutes away,” Watry said. “There’s big stuff in the future, and I think you’ll see opportunistic endeavors that come along that we can capitalize on.”
As the fastest-growing city in the nation, Fort Worth is poised to attract a wealth of investment in the coming years. Nearby cities in Tarrant County, all of which boast business-friendly governments, will reap the benefits of that growth, said Chris Wallace, president and CEO of North Texas Commission.
“You’ve got leadership in place who understands the importance of the development community and understands the importance of, within reason, staying out of the way and letting the market drive,” he said.