NEWS RELEASES

Fort Worth Business Press
January 2, 2006
By: ALESHIA CLAUNCH

2006 Real Estate Forecast

Tom Struhs, president of Trinity Bluff Ltd., said he expects to see big changes in the Central Business District (CBD) that will begin to take shape in 2006.

“Within the next two years, there will be an additional area of the CBD that will include Trinity Bluff, and you’re going to see no less than six-story buildings that will add width to the downtown people know. It’s going to be a very noticeable extension of downtown.”

Elizabeth Falconer, one of the creators of the Trinity River’s Trinity Bluff mixed-use development, said residential development in downtown will continue to steam ahead in 2006 as it has done in recent years. Falconer said there was a national study completed by the National Association of Realtors asking U.S. citizens if they were given the chance to live in a safe, clean and “walkable” downtown area, would they be interested. The results: three percent said yes.

“Three percent of our 600,000 population is a potential market of 18,000 and with less than 1,000 condos available right now in downtown, we have only scratched the surface of residential development in downtown; 2006 will see residential piling in from all sides,” she said.

Falconer said the trend of seeing amenity-packed residential development in the center of Fort Worth will also continue in 2006 and get increasingly exclusive.

“Land is a diminishing asset in downtown, and as it goes away, and with construction materials rising, developers are having to pour more and more money into their projects,” Falconer said. “It’s tough to do affordable housing that’s reasonably priced in an urban development especially when you add in the cost of a parking garage and elevators so developers are tending to tack on more amenities and blow the idea of high-end living even higher.”

Falconer said the look of Fort Worth development in 2006 will err on the side of traditional and shy away from the urban, edgy design trends evident in other cities.

“As the baby boomers see themselves settling toward retirement, they’re willing to pay for granite versus Formica,” Falconer said. “The edgy designs appeal to a younger buyer and with construction costs on the rise, the younger buyer isn’t going to want to spend the extra money for the more costly building materials. So design will cater to the class that will pay for it – and that’s the baby boomers.”

“The more progressive the transportation in Fort Worth becomes, the more obvious the opportunity for development is going to be for people inside and outside of Fort Worth,” Struhs said. “... There will be some sort of dash for land pretty soon.”

Other residential trends that will expand in 2006 will include the mixed-use urban village layout. As is true in many cities throughout the nation, Falconer said people want to revert back to the days of neighborhood grocery stores and salons and steer clear of malls and big box retail locations at a one-stop-shop.

“Samuels Avenue, for example, was once an area with little shops along a street and housing units above them – people want to go back to that,” Falconer said. “It’s not a new concept, but these little community village areas will continue to pop up in 2006. They are already all around downtown with Magnolia Green, Seventh Street and Trinity Bluff, and they will keep happening until they are throughout the city. It’s what people want.”

Overall, Struhs said, the Class A office space in downtown will drive the real estate economy in 2006. Though current rental rates in downtown spaces are high, he said, they could be higher and the fact that more landlords have not price gouged is indicative of Fort Worth’s business practices.

“A number of people in downtown think that when the tide goes up all boats rise,” Struhs said. “That’s a healthy attitude that Fort Worth developers and a lot of politicians seem to have. It makes us different from other people in other cities. Yes, our downtown is stronger than it’s ever been, but influential Fort Worth people are willing to have a climate where everybody benefits – not just the landlords. That’s what’s going to make 2006 a great year.”