Although novel strains of the coronavirus have kept the economic recovery on a roller coaster throughout 2021, a steady stream of newcomers has helped the Fort Worth and Tarrant County commercial real estate market weather the unpredictability and even s come out better than expected.
“There were no surprises,” said Sarah LanCarte, owner of LanCarte Commercial, who moderated a panel discussion to launch Tarrant County’s 2022 Commercial Real Estate Forecast.
The preview took place Thursday at the Fort Worth Convention Center, returning to fully in-person attendance this year after going virtual in 2021 due to the pandemic.
Overall, panelists as well as industry specialists, who presented updates from individual market sectors, were optimistic about the 2021 results, although there were a few areas of difficulty.
“Retail and office have been hit the hardest,” LanCarte noted.
While the pandemic has prevented a robust return of workers to their office work, there has been a rebound throughout 2021 and this trend is expected to continue barring a major resurgence of Covid 19, said Jessica Miller Essl, Co-Chair of M2G Ventures, a commercial real estate investment, development and advisory firm specializing in adaptive reuse and industrial properties.
Even so, the office environment of the future may deviate from the office work setup of the past. There is already a shift underway that Essl and others have described as a “flight to quality.”
Instead of office spaces in tall towers, the offices of the future are likely to be some type of hybrid model, combining a mix of working from home and working in the office.
“Hybrid is here to stay,” said Cannon Camp, senior vice president of JLL in Fort Worth.
Business and professional services will likely favor more days in the office, while the tech industry will likely shift to remote.
The office experience of the future will likely consist of sprawling campuses on large campuses on vast expanses that include extensive landscaping, walking paths, and even water features.
Indoor facilities will include cafes, workout facilities, wellness centers and lounges, Camp said.
Commercial real estate sectors that are still struggling are retail, restaurants and hotels, according to Amber Calhoun, commercial real estate broker at Graham Property Brokerage.
Pandemic shutdowns have dealt a painful blow to these industries and continue to impact travel and restaurants.
Retail was already shifting more towards e-commerce and online shopping before the pandemic and continued to move in that direction, Calhoun said. However, more and more people are going back to grocery shopping in person because “people like the idea of picking their own produce.”
A shortage of workers and competition to hire workers have driven up labor costs, which has also had a negative impact on restaurants and hotels, she said.
Among the commercial real estate sectors that continue to grow and prosper is the industrial market, where the DFW market remains the second largest in the United States, according to Reid Goetz, senior vice president of Hillwood.
The multi-family housing market also performed well in 2021, driven by strong demand related to population growth in the Dallas-Fort Worth area, although supply chain and labor shortages have slowed growth. construction starts in 2021, leading to rental price increases. This market is poised to do extremely well in 2022, said Drew Kile, senior managing director of Institutional Property Advisors, a Marcus & Millichap company.
This year’s forecast also featured a panel discussion with Fort Worth Mayor Mattie Parker, Tarrant County Judge Glen Whitley, and Arlington Mayor Jim Ross, all of whom spoke about the growth and their agencies’ 2022 development outlook and collaborative inter-agency efforts to improve residents’ lives with the expansion of early childhood education opportunities helping women re-enter the workforce, improving public health and tackling homelessness, among other priorities.