Courtesy of Joseph Anzaldua, Unsplash
The Fort Worth office market continues to show signs of strength, according to data generated by JLL. For the fourth consecutive quarter, occupancy losses have narrowed, a trend that reflects the gradual return to a more stable business environment post-pandemic.
The growth is in Class A office space.
Downtown Fort Worth, the largest concentration of Class A space in the market, continues to see the lowest vacancy rate overall. Higher asking rents are expected to reflect the surge in demand.
Overall, office-using employment continues to rise, totaling 241,300 jobs as of August in the Fort Worth-Arlington-Grapevine metro division centered on Tarrant County.
That represents a 16.2% increase compared with March 2021 when office-using employment had recovered from losses during the pandemic.
Source: JLL
JLL says: “While the increase in employment for office-using industries is not correlated with current occupancy and absorption, those two trailing data points could point towards an increase in the long term as occupiers continue to incorporate return-to-office and hybrid work strategies into their real estate footprints.”
On the other hand, Class B properties aren’t doing as well. Those are seeing more empty offices, which is dragging the overall market down. Also, Fort Worth’s suburban markets have remained pretty flat this year in terms of demand.
Post-pandemic, downtown areas have bounced back faster than suburban office spaces. According to studies, suburban office spaces have experienced slower recoveries as businesses streamline their footprints and focus on premium urban locations.
The shift is partly driven by the demand for "flight-to-quality" office spaces.
Looking ahead, Fort Worth’s office market could get an injection of fresh energy with the arrival of new Trophy Class properties — the top of the line in office spaces. About 400,000 square feet of new space is expected to break ground by 2025. This means that tenants will likely flock to these top-tier buildings, creating opportunities for older Class A spaces to be rented out again and potentially converting some Class B buildings into mixed-use spaces.