Is Fort Worth on the verge of a high-rise building boom like Austin? What experts say.
December 11,2022
See full Fort Worth Star-Telegram article by Jenny Rudolph here.
For decades, downtown Fort Worth’s high-rise office towers have stood as monuments to the mighty business of oil and gas.
Since the energy-fueled construction boom of the early 1980s, not much about that skyline has changed — Burnett Plaza, the monolithic landmark building that opened in 1983, is still the city’s tallest.
But Fort Worth may be entering a new era of skyward development, driven less by the traditional titans of Texan industries and more by the types of residential and mixed-use projects like those driving Austin’s downtown boom.
A red and white crane towering over Commerce Street is a signal that such an era has already begun. The project under construction, Deco 969, will be the city’s first new-build residential high-rise with 27 stories of luxury apartments. The tower is already 21 stories tall and is expected to begin move-ins by early 2024.
Deco 969 won’t be the city’s tallest tower — Burnett Plaza has 40 stories — but the project is being watched closely by real estate developers and investors. If Deco 969 succeeds, other residential towers catering to a new wave of young professionals are likely to follow, especially with the new Texas A&M campus coming to downtown. That could mark a significant tipping point for the future of Fort Worth’s skyline, experts say.
“The Deco project will be interesting. It will kind of be the bellwether for future projects,” said David Walters, senior vice president of CBRE, a commercial real estate and investment firm based in Dallas.
“I know there are other residential developers that would love to go vertical,” Walters said. “I suspect if Deco leases up quickly, does well and gets rents that meet their performance, you’ll see other developers that are going to follow.”
Some business leaders predict that a burgeoning high-rise residential market in downtown could spur more commercial projects, too, and sweeten the deal for relocating corporate headquarters. Demand for office space has largely recovered to pre-pandemic levels; vacancy rates are now about 13.3%, down from nearly 15% in 2021, according to CoStar data provided by Downtown Fort Worth Inc.
To be clear, Fort Worth has a lot of catching up to do when it comes to high-rise development.
With the exceptions of Frost Bank Tower in 2018 and the Omni Fort Worth Hotel tower in 2009, Fort Worth hasn’t seen much change to its skyline in three decades, despite now being one of the fastest growing cities in America.
Dallas has 14 commercial and residential towers taller than Fort Worth’s Burnett Plaza, and none of Fort Worth’s landmark high-rises even cracks the Top 30 in Texas.
IS FORT WORTH THE NEXT AUSTIN?
This summer, work began in Austin on the 74-story Waterline tower, which would be the tallest building in Texas.
But the Waterline’s glory was short-lived.
In November, another Austin developer announced plans for an even taller skyscraper: the 80-story Wilson Tower, with 1,035 feet of apartments, restaurant and retail space. That height is equivalent to stacking Fort Worth’s sister towers, Bank of America and Wells Fargo, on top of one another.
Austin, the tech hub capital city, is experiencing a high-rise building boom that seems remarkably unlike the rest of Texas. But some see comparisons with Fort Worth.
Bethany Perez moved to downtown Austin 12 years ago. It was a city with famous nightlife and vibrant energy, though few people actually lived downtown at the time.
Now the city center has grown tremendously, and that’s been further catapulted by the pandemic, said Perez, an executive vice president of the real estate professional services firm JLL.
Austin has densified significantly not only due to commercial office growth, but also through hospitality and residential development, Perez said. Those trends are similar to what Fort Worth is seeing today.
“Our population is on the younger side,” Perez said, “and I think for employers, they’re wanting to be where the talent is. We have that here with not only UT Austin, which is a Tier 1 research university, but also 25 other colleges and universities in the area to pull from.”
Comparisons between Fort Worth and Austin might sound extreme, but business experts in Fort Worth are having those conversations.
Many UT Austin students graduate and choose to stay in Austin, Perez said. While Fort Worth has some TCU graduates staying here for jobs, the expansion of Texas A&M’s Fort Worth campus dubbed “Aggieland North” could do even more to retain young talent downtown and attract new employers.
The $255 million expansion will add to Texas A&M’s existing law school on Commerce Street with a new education extension building and a research and innovation center.
Todd Burnette, managing director of JLL’s Fort Worth office, describes the Texas A&M project as one of the most significant in the history of downtown.
“They’ll have three buildings arise when they’re finished there,” Burnette said. “It will continue to attract companies. The most important thing today is hiring employees.”
This should drive demand for studio housing for young adults, said Andy Taft, president of Downtown Fort Worth Inc.
“We have spoken to one developer who is working on a project downtown that will have smaller units, and so the price-per-unit will be lower,” Taft said. “They mentioned that they believe that Texas A&M students would likely be in their prospect pool.”
MORE APARTMENT TOWERS IN THE WORKS
There’s already momentum for rental development in downtown, in addition to Deco 969.
A 12-story apartment building on Jones Street, within walking distance of the Texas A&M expansion, has gotten preliminary design approval from the city.
Another 12-story apartment building, 1000 Weatherford, is planned for the west side of downtown, and a 16-story apartment tower is proposed for North Henderson at West Seventh streets.
Downtown Fort Worth Inc. was also talking with a condo developer who is drafting plans for a high rise as of October.
“I think it’s an indication that high-rise developers are now more active post-COVID,” Taft said.
Until recently, most residential development has been three to five stories, including Burnett Lofts that started leasing in late 2021 along West Lancaster Avenue. Now, the city is seeing more high-rise residential development because rents and demand are strong enough to support it, Taft said.
The average rent in downtown Fort Worth is $1,587 as of this month, according to ApartmentData.com.
‘FORT WORTH IS REALLY GOING TO BE ONE OF THE TOP MARKETS’
Internally, commercial real estate company Transwestern refers to Fort Worth as the next Austin or Nashville, said Andrew Matheny, a research manager at the firm. All three cities share unique, authentic cultures with strong downtowns and living options for young professionals, he said.
“We think over this next cycle, Fort Worth is really going to be one of the top markets to be in,” Matheny said.
For one thing, Austin will run out of land that’s feasible for development.
“Austin is going to get to a point where they really don’t have any more area to build more of these high rises, and Fort Worth has the opportunity,” said Burnette of JLL. “(Fort Worth) has land, and it has sites.”
“We have so much more institutional money looking at Fort Worth,” Burnette said. “I think it’s just in the early stages of seeing a lot of that growth. It just hasn’t happened in the past. Fort Worth is a gem for these developers that are looking at opportunities because they can come in and buy land at less price-per-foot than they can in downtown Dallas.”
Downtown Fort Worth Inc. says one-third of downtown parcels are undeveloped or underdeveloped.
“There is a lot of land downtown,” Taft said. “About 33% is either surface parking, completely vacant or underutilized.”
In October, around 30 Fort Worth business and community leaders, including the Fort Worth Chamber of Commerce, visited Nashville to study its best practices for downtown development.
“They had a transformation in their downtown similar to Austin,” Fort Worth chamber president Brandom Gengelbach said. “They’ve had some transformations through population growth and redevelopment. They’ve done some redevelopment along the river, and I would directly equate that to the redevelopment opportunity we have at Panther Island.”
Gengelbach said Fort Worth will soon see the same type of growth Nashville and Austin have seen, given trends in Fort Worth that are already happening, including the rise of a thriving hospitality industry, increased residential development and the attraction of new businesses as a result.
Like Austin, Nashville is seeing university students sticking around after graduation.
“Nashville has become a place where it’s clearly evident that young people will move here with or without a job,” said Bo Tyler, senior managing director at JLL’s Nashville office. “We’re retaining more of our students attending local universities that are no longer just staying at Vanderbilt for four years and then heading to New York or Atlanta, necessarily. A lot of them are sticking around.”
Tyler said he thinks the main factor propelling Nashville’s downtown development has been companies chasing recent graduates. The city has seen many financial services and tech companies choose Nashville.
“(Nashville’s) skyline is significantly different than it was 10 years ago, and I think that it reflects growth and a positive trajectory of the city,” Tyler said. “It reflects a city that is going in the right direction and a city that people are moving to and staying in.
“As an insider, it’s certainly impressive to look up every once in a while and notice how much it’s changed and the growth that’s reflected in it,” Tyler added.
There certainly is an intangible value to an “impressive” downtown skyline, experts say.
Robert Sturns, the director of economic development for Fort Worth, said improving the density of downtown is a strategic goal in attracting business.
“The skyline is often the first impression that visitors have of a city,” Sturns said. “In some ways it can help characterize that city’s personality and the kinds of industries, investments and overall ‘vibe’ that it prioritizes.”
Locations Mentioned: Bank of America Tower, Burnett Plaza, Deco 969, Frost Tower Fort Worth, Omni Fort Worth Hotel, Texas A&M University School of Law, Wells Fargo Tower