408 replies to this topic

[elpingüino]

Mid-States Distributing Co., "one of the nations largest farm store retailers," is moving its headquarters (100 employees) from Minnesota to Fort Worth this fall. https://www.bizjourn...fort-worth.html

[Austin55]

I know there been a decades long discussion of how FW should market itself to corporations, but a few recent moves play perfectly into the western vibe of the city. American Quarter Horse, RFD TV, Kubota (in Grapevine, but close).

[Urbndwlr]

Did you notice that Mid-States Distribution has something like $6.5 BILLION in revenues?

I realize some businesses (such as distributors) have massive revenue and probably thin margins but thought that was worth noting. 

 

For the seemingly-vain goal of having more Fortune 500 companies within the city limits, woudn't this be one? 

Isn't the cutoff around $5 Billion in revenue?

 

I take my hat off to the Chamber (not sure if they're directly responsible) in that we (Fort Worth) have had a good little stream of companies announcing moving the HQ or decent-sized offices to Fort Worth recently.  I think there was another one there on the North Freeway as well. 

[Doohickie]

The building’s amenities, its western design and collaborative work space are attractive features and align with our brand’s identity

 

Metal roof = western identity, I guess.  Other than that it's a fairly generic structure, at least from the outside.

[elpingüino]

Hallmark Financial Services is moving its national headquarters (120 employees) from downtown Fort Worth to Dallas. https://www.bizjourn...-hq-dallas.html

[renamerusk]

If you are headquartered in Downtown Fort Worth, it would seem that the majority of your employees would are already be consolidated there.

 

I suspect that this is not so much about Downtown Fort Worth as much as it is about the amount of zombie buildings that string along  this section of LBJ.  I imagine that there is tremendous pressure coming from Frisco to the north that has created higher vacancy numbers that is forcing owners to lease at below market rates. 

 

Another way to look at it is that Downtown is severely lacking available or even speculative Class A Office Space.  The notion that Class B Office Space (Executive Building) is something that businesses are seeking is once again proven to be incorrect.

 

Apparently, the Downtown Office Relocation/Recruitement Committee created by the Downtown Office Owners has suffered its first defeat.

[youngalum]

The hits keep coming

 

This is what focusing on cows and not white collar jobs will do

[renamerusk]

The hits keep coming

 

This is what focusing on cows and not white collar jobs will do

 

 I have to disagree.  Its not about the cows, culture, museums, the Stockyards; we actually have some great attractions.  Its about the forces within Downtown who have retarded the speculative development of Class A Office Space; it is the combination of a lack of this First Class Office Space and a glut of space begging for tenants in sectors of Dallas and Irving. 

 

Annouce a 500K -1msf of New, State of the Art Class A Office Space Downtown and it will be absorbed.

[Presidio Interests]

rename, yes, of course a newly built 500K - 1MM SF office building in Downtown WOULD get absorbed.  The question is whether it would be fast enough and at rates sufficient to support the very high cost of new construction. 

 

Using overly simple math, what might a newly constructed office tower in Downtown FW require to build starting in 2019?

Since Frost Tower quotes around $40/SF, let's assume that rate works based on their construction costs locked in around 2016. 

If total costs (land and development) have risen by 20% since then, and assuming construction financing is available, the landlord would need to lease for approximately $46/SF for the building to make sense. 

 

Unless the new building is truly superior (and tenants see/understand that value) vs the 1980s Class A buildings,  the +/- $16/SF rent premium to be in the new building will seem like a big leap.  Now if we have companies coming to/expanding to Fort Worth from more expensive markets, $46/SF would sound reasonable or cheap to them, and would absorb quicker. 

 

Segue to relocation topic:

 

It is hard to generalize about the "why" companies move from one place to another.  Recently, the answer has often been the talent (i.e. people).  Sometimes it is a change in CEO, who single-handedly says "we're moving to my hometown".  Often it is a variety of factors including change in leadership or control, new leadership's bias/current residence plus their assumption that recruiting the people they need is better in their preferred city.  Sometimes it is proximity to key customers or companies where the firm wants to recruit talent.  I'm not familiar with Hallmark's company or reason but interested to hear.

 

My instinct on whether Mid States Dist example of choosing a location (building) with a western/frontier vibe is a sign of a broad preference:  in my opinion, no.  I would speculate that the preference for ranch-house design in office environments is shrinking, not growing.  This is not a data-informed comment, but that design seems to have fairly narrow appeal. 

 

It benefits Fort Worth to have a great variety of types and sizes of workspaces in our inventory (and as renamerusk pointed out, to have inventory/capacity for new expansion and new-to-Fort Worth companies).   

[Dylan]

Hallmark Financial says they plan to add employees after they move.

 

I'm wondering if part of the reason they're moving is the lack of office space here.

[Austin55]

Article mentions 50k sqft. 777 Main certainly has that much, but they'd need to spread out over different floors. If they wanted 50k on one floor they aren't going to find anything in downtown, 777's entire 5th floor is for lease, it fills nearly the full block and is probably one of the biggest office floor plates in downtown but is only 30k sqft.

[renamerusk]

rename, yes, of course a newly built 500K - 1MM SF office building in Downtown WOULD get absorbed.  The question is whether it would be fast enough and at rates sufficient to support the very high cost of new construction. 

 

Unless the new building is truly superior (and tenants see/understand that value) vs the 1980s Class A buildings,  the +/- $16/SF rent premium to be in the new building will seem like a big leap.  Now if we have companies coming to/expanding to Fort Worth from more expensive markets, $46/SF would sound reasonable or cheap to them, and would absorb quicker.

 

It benefits Fort Worth to have a great variety of types and sizes of workspaces in our inventory....

 

You are applying the laws of economics which seem to work in favor of Dallas, Irving, Frisco, etc but do not work in favor of Fort Worth.  How can the laws of economics punish Fort Worth and not punish them at the same time or rate?

 

The cost of everything to construct a skyscraper in those locations are the same or are within the cost to build in Fort Worth.  The factors that make these communities attractive (transportation, weather, tax, regulations, governance) are the same or within reason in Fort Worth.  What makes and has made Fort Worth different is that it has been led by a group(s) who do not necessarily desire growth that is competition to their self interest.

 

I do not know what is the successful rate or pace of absorption that you needed to break ground, but I would presume that neither do the other cities mentioned.  What seems to be the word about Fort Worth among developers, some from Dallas who say as much, is that property owners in Downtown seek prices for their land that greater than or equal to the more matured and proven land market of Dallas.  The developers also come away with a harden impression that Fort Worth property owners are not very interested in growth. Perhaps they fear that their property taxes will increase  and so it is financially better to depreciate and save taxes by allowing the land to remain unimproved.

 

It is impossible for any new building to not be truly superior to buildings that delivered in the 1980's and predate the internet. A new skyscraper would be attractive to companies seeking to relocate to a lower taxing state, to a city where living expenses are lower, and where the labor is non unionized. 

 

As for the variety of types and sizes of work spaces in Downtown, evidently it was not enough to keep a Downtown office user to relocate to North Dallas and have its employees deal with the additional 90 mins to commute for its Tarrant County residing employees.  The problem with Fort Worth, were it a shoe store, is that it does not have any new shoes on the shelf to sell; instead Fort Worth has cheap and aged Class A Space which is filled and Class B Office Space which is less attractive as newer offices buildings deliver to the east.

 

The problem is not the quality of Downtown rather it is sown up by a handful of property owners who are doing well enough with the status quo. 

[Presidio Interests]

As a general rule of thumb, it is likely a new office building needs to be about 50% pre-leased to kick off construction.  A developer could go in with much lower debt (higher equity) but I'd expect most equity investors would require some pre-leasing also to demonstrate that tenants are committed and so they don't risk opening empty.  It is more challenging to get tenants to make firm lease commitments two years in advance in buildings they have never seen or walked through. 

 

For certain windows of time and in certain submarkets, you do see speculative office projects happening (without pre-leasing). This requires an extremely strong, reliable demand for that vacant space, because those investors are taking big risks that something happens and the office market stops and demand dries up and they have vacant buildings.  There are unfortunately many examples of people who have lost everything they own because these bets went wrong.

 

I would love to build what you are talking about.  I have ideas about scenarios that I think would work well if/when the circumstances are right.  As much as I love Fort Worth and am committed to making a positive impact via development, every project has to make good financial sense for its stakeholders or else it should not move forward.  The preliminary design and tenant recruitment require substantial investment so this can't be done casually.  You've seen examples of those half-baked proposals posted on this forum over the years.

 

Most of what I do is redevelopment of existing buildings, but I have developed one ground-up office building at 3707 Camp Bowie (only 35,000 SF).  Even that size of project was challenging to pull off.  We developed that in 2007-2008, which was at the peak of that economic cycle.  We were very fortunate that two key, anchor tenants showed up at the perfect time and were willing to pay very strong lease rates (for that time).  If they hadn't, and if we'd had to wait even 12 more months, the financial crisis would have started and we likely would have sold the land. 

 

I haven't tried to buy Downtown land in Fort Worth or other cities so don't know whether FW owners are more or less difficult.  We dont have many assembled blocks though so it can be harder if you have to put together land from multiple owners.  I have not seen evidence that local property owners are trying to prevent new entrants into the market. 

[renamerusk]

Presidio Interests, thanks for your level headed input and it is both appreciated and sobering.

 

I attribute my frustration from watching the unbridled growth in office development in Dallas, Collins, Travis Counties and even in OKC and wondering what forces are restraining Fort Worth from delivering at best a fraction of the lease-able space that is developed and quickly claimed in these cities. 

 

It also seems that even as cycle comes and go and other cities weather them too;  Fort Worth remains more bearish while other cities come out bullish.

 

Would you know or can you recall learning whether Google pre leased the new speculative tower in Austin or if it decided to claim it as soon as it was proposed?  Now, I acknowledge that Fort Worth is not an Austin, but at some point even Austin must to have had its first speculative project which faced too the same universal trepidation.  I am hoping for a spark like that to kick start Downtown even though I realize that it is unlikely to entirely replicate the Austin Experience.

 

I am glad to learn that your Camp Bowie Project ended successfully for you.  Being an optimist, I think that there can and will be a "white knight" to come in the nick of time  or even well in advance should a major Downtown skyscraper be flirted about in some major East and West Coast markets.  As it stands today, even flirting the idea has been a non-starter.  I am encouraged by the response of the hospitality industry when a campaign designated to recruit major hotel developers to Fort Worth was floated in the hotel industry print media.

 

Continue to work the phones in pursuit of that "signature tower" that Fort Worth is waiting for and is lacking.  I believe it will be superior, awesome and a great day for Downtown.

[tamtagon]

Fort Worth fell behind when every other city in North Texas took to offense with recruitment incentives and corporate tax breaks in a competition for expansions and relocations. Fort Worth has a plan, now, it'll take five-ish years before 'keeping up with the Joneses' will have new workers coming & going to DTFW. 

 

The strategy of the Bass Brothers timed out decades ago, insulated Fort Worth during two major recessions, and stifles Fort Worth the rest of the time.

[Presidio Interests]

Rename, from articles I've read, I think that Trammell Crow Company decided to start construction on the building and Google signed on after.  I could be mistaken though.  But Austin has recently had an extraordinary run of good office absorption.  Amazon took an entire building in East Austin, Apple announced a massive campus (an expansion from existing Austin operations), Oracle built a big campus on the river, the Army put in a technology office. 

 

IMO, the takeaway here likes in the "why".  Why did these companies choose Austin over all the other cities that would have LOVED to have them?

 

Answer:  1) Existing talent base that can be recruited quickly (in specific technology fields - from companies already there).  2) Austin's reputation, particularly on the West Coast, for people's willingness to move there. 

 

This did not happen overnight.  Austin has been gradually developing a technology specialty for several decades.  The fact that the University of Texas is there is a major part of the story.  Students and recent graduates form start-ups, keep it in Austin to continue to have access to other students (esp grad students) and to the faculty as key advisors.  Stanford is the ultimate example of this.

 

Eventually, there were a number of tech-related firms in Austin and California-based firms needed a low-cost alternative to expand. 

 

So.... if Fort Worth can use this lesson - what universities locally can offer programs that are the next generation of highly desired talent?  AI? Data science? Generally computer science?   It is these institutions (universites) that companies view as the anchors of an intellectual community and as future partners in their futures.  

[renamerusk]

Once again PI, thank you for a brief but thorough explanation.

 

It is a hard thing to remain patient, but eventually, I believe that Fort Worth will have its day in the sun.  It will happen as Fort Worth gets itself out of the shadow of its much bolder neighbor.

[renamerusk]

Fort Worth fell behind when every other city in North Texas took to offense with recruitment incentives and corporate tax breaks in a competition for expansions and relocations. Fort Worth has a plan, now, it'll take five-ish years before 'keeping up with the Joneses' will have new workers coming & going to DTFW. 

 

The strategy of the Bass Brothers timed out decades ago, insulated Fort Worth during two major recessions, and stifles Fort Worth the rest of the time.

 

 There is some consolation in that you, who could be described as a friendly outsider, recognize the harm and the good that derives from that kind of strategy; and that you seem to see a silver lining approaching as this strategy has come to its end. 

[elpingüino]

Two corporate headquarters moves.

ProMark sports merchandise company moves to Fort Worth from Colorado:
https://www.dallasne...orth-fort-worth

KT&G, the fifth-largest tobacco firm in the world, moves its US headquarters to Fort Worth from Plano. Its new distribution center is the first tenant in the new Fossil Creek Crossing.
https://www.bisnow.c...-ship-98386#ath

[elpingüino]

Point of Rental Software is moving its North American headquarters (100 employees) to Fort Worth from Grand Prairie.
https://www.point-of...ew-hq-location/

[BlueMound]

Two corporate headquarters moves.

ProMark sports merchandise company moves to Fort Worth from Colorado:
https://www.dallasne...orth-fort-worth

KT&G, the fifth-largest tobacco firm in the world, moves its US headquarters to Fort Worth from Plano. Its new distribution center is the first tenant in the new Fossil Creek Crossing.
https://www.bisnow.c...-ship-98386#ath

Awesome!

Any relocate to FW is welcome news

[Not Sure]

Also from the KT&G story elpingüino linked:

This is the second time in a month Fort Worth has landed a major corporate relocation. Last month a $6.5B farm store retailer, Mid-States Distributing Co., signed a deal to move its headquarters from Minneapolis to the Mercantile Center in North Fort Worth.

[ramjet]

Another one!  Stanley Black and Decker to open a new plant at Alliance.

 

https://www.dallasne...orth-fort-worth

[renamerusk]

Can we agree that a company that is shifting from one part of the metropolitan area to another part of the same metropolitan area is not a relocation in the truest sense?

[johnfwd]

Can we agree that a company that is shifting from one part of the metropolitan area to another part of the same metropolitan area is not a relocation in the truest sense?

 

Yes, if you wish to adopt the regional perspective.  This was the whole point of the Dallas Regional Chamber of Commerce's approach to bidding for Amazon HQ2.  But I don't like it.  Fort Worth is its own metropolitan area and I won't stray from that thinking!

 

Ramjet, thanks for posting the news article about Stanley Black and Decker.  This isn't a "corporate relocation."  It's North American corporate headquarters is located in New Britain, Connecticut.  The corporation is adding plans for a manufacturing plant in North Fort Worth and augments its earlier plan to have a major distribution center here.

[renamerusk]

 

Can we agree that a company that is shifting from one part of the metropolitan area to another part of the same metropolitan area is not a relocation in the truest sense?

 

... This isn't a "corporate relocation."  It's North American corporate headquarters is located in New Britain, Connecticut.  The corporation is adding plans for a manufacturing plant in North Fort Worth and augments its earlier plan to have a major distribution center here.

 

Yes. Thanks for the clarification.  I was not sure whether this is an out of state relocation into Fort Worth, or a regional move. After reading the news reporting, it did not state that this is the distribution center, so yes, it is indeed a corporate relocation.  Certainly wish that it could have taken up residence in Downtown.

[johnfwd]

I think you had a typing error because...No, it is not a corporate relocation.  It is a new manufacturing facility to add to a new distribution center.  I've excerpted the two key sentences from the S-T article.  No mention in this article that the company is relocating its corporate headquarters.  And nothing is actually being "relocated,"  as these are new facilities for this corporation.

 

https://www.star-telegram.com/news/business/article230424999.html 

 

Fort Worth has won a new Stanley Black & Decker manufacturing facility...

 

The plant is in addition to a regional distribution center of about 1 million square feet Stanley Black & Decker will open in Northlake, which is expected to bring more than 300 new jobs.

 

 

[renamerusk]

So this news story was first posted in this thread; and so my excuse and reply [typing error as you suggest] are based upon that; and which is a problem on to itself as postings are frequently in made freelancingly.

 

Fort Worth has been a leading location for manufacturing jobs; and this has its own positive impact upon the image of the City.  However, when we do get a corporate relocation, especially the white collar Class A variety, then Corporate Relocation is the proper designation and should be clear to everyone.

 

Perhaps what is actually needed is a "Manufacturers Thread" to delineate between white collar and blue collar jobs; it would certainly be more active than the long awaited Big Corporate Relocation.

[elpingüino]

Fort Worth a finalist for health care HQ, nearly 1,200 jobs

Quantum Health, headquartered in Columbus, Ohio, plans to move 800 jobs and expects growth of 350 more positions. Fort Worth, Nashville, and Dublin, Ohio, are the finalists.

[Urbndwlr]

Nashville has a huge healthcare cluster and they're already in Columbus so Dublin would be the easy move, but there is a reason so many companies and people are moving to Texas.  Would enjoy having Quantum Health join the community in Fort Worth.  

 

The Pier 1 Building (maybe) a few downtown, and proposed buildings in Alliance and Edwards Ranch could all be players. 

[Jeriat]

The Pier 1 Building (maybe) a few downtown, and proposed buildings in Alliance and Edwards Ranch could all be players. 

 

I'd much rather them move to Near Southside over Alliance and Edwards Ranch. DEFINITELY more than Alliance...

[Urbndwlr]

Bold prediction: We'll get it and it'll be in the Medical District.

It appears to be a health insurance company so I don't know that proximity to healthcare and life sciences talent matters.  I'm also not aware of any developers who have 150,000 SF of office space available or ready to go on the Near Southside.  For those reasons I'd expect they would be looking at the existing buildings or those that are basically shovel ready. 

[Dylan]

Unfortunately, I can't access the above Dallas Business Journal article.

 

But, it appears Quantum Health rents their current space, and is looking for office space they can rent. That would eliminate Fort Worth's Medical District.

 

Here's an article from a Columbus news source. Scroll down to "Previous Story," and look for the 10th paragraph: https://www.thisweek...oking-to-dublin

 

The city of Columbus worked with Quantum, providing the company with building options within the city that could accommodate growth, but in the end, Quantum found what it needed in Dublin, said Mark Lundine, Columbus’ economic-development administrator.

[NThomas]

 

Bold prediction: We'll get it and it'll be in the Medical District.

It appears to be a health insurance company so I don't know that proximity to healthcare and life sciences talent matters.  I'm also not aware of any developers who have 150,000 SF of office space available or ready to go on the Near Southside.  For those reasons I'd expect they would be looking at the existing buildings or those that are basically shovel ready. 

 

 

 

 

Any shovel ready project would be on the same timetable in Columbus, Fort Worth, or Nashville, so you're can rule out anything other than existing space.

 

Thankfully, there are (only) a handful of large block availabilities in the Fort Worth office market as of today, but they're scattered across the northern half of Tarrant County:

• Downtown (e.g., 777 Main)
• Fossil Creek/Mercantile Center (e.g., Gourley Plaza)
• Alliance (e.g., Heritage Commons IV)
• Westlake/Southlake (e.g., Solana)

[elpingüino]

Fort Worth a finalist for health care HQ, nearly 1,200 jobs

Quantum Health, headquartered in Columbus, Ohio, plans to move 800 jobs and expects growth of 350 more positions. Fort Worth, Nashville, and Dublin, Ohio, are the finalists.

Quantum ended up picking Dublin, Ohio, for its new headquarters, a move of about 20 miles. https://quantum-heal...blin-Ohio.shtml

[renamerusk]

Education, transportation, and tourism. Those were my suggestions.  If you think Panther Island will draw corporations and jobs (more than opening up Meacham), then sure, let's get it done.

 Nothing at al wrongheaded with those three suggestions.  The reality is that those are the kind of things that Fort Worth can actually do concretely and also achieve long time benefit. 

[renamerusk]

As reported in the Fort Worth Business Press,

 

Walter Bettinger, CEO Charles Schwab to keynote Fort Worth CofC Annual Meeting -

 

The Fort Worth Chamber of Commerce, partnering with the city of Fort Worth’s economic development office, is making concerted efforts to attract corporate relocations to North Texas, Tarrant County, and particularly Fort Worth.....

 

“Walter’s [Bettinger] appearance complements those efforts,” Chamber President Brandom Gengelbach said. “He will provide some insight as to what companies are looking for when relocating to the Fort Worth region.”

[elpingüino]

Not exactly a relocation, but still good news.

Linear Labs, an electric motor company, plans a 500,000-square-foot research/manufacturing facility in Fort Worth to support thousands of new skilled jobs over the next 10 years. http://fortworthtexa...Labs-Agreement/

[Austin55]

Linear Labs is definitely one of the coolest things going right now. Theyve got a bright future I think.

[johnfwd]

Fort Worth needs many more of this kind of entrepreneurship.

[Austin55]

An interesting note in next weeks pre-council agenda...

 

 

Briefing on Proposed Economic Development Program Agreement with Project Panther for the Relocation of a Corporate Headquarters and Other Offices to Fort Worth – Robert Sturns, Economic Development

http://fortworthtexa...c9cd32892f5.pdf

[Austin55]

The company is Wesco Aircraft, they are based in California currently. They would occupy the old FAA headquarters north of downtown.

[JBB]

Corner of Meacham Blvd. and Sylvania and not the complex on Blue Mound Rd. west of 35, correct?  They already have 2 local warehouse facilities.

 

Totally off topic, but I have a friend that started working a job based at the new FAA building in the Alliance area and he hasn't set foot in the office yet and won't this year.

[Austin55]

Corner of Meacham Blvd. and Sylvania and not the complex on Blue Mound Rd. west of 35, correct?  They already have 2 local warehouse facilities.

 

 

Yep! 

 

ST has coverage - https://www.star-tel...e245722335.html

[rriojas71]

If people were smart they would start to build residential of some sort nearby.  I think the development planned near Mercantile Station should use this as an opportunity to proceed with their plans.

[johnfwd]

Here's still another corporate relocation, together with a distribution center in far north Fort Worth, the Alliance area.  I think the city's tax incentives were well placed in this case.  Article in FWBP.

 

https://fortworthbus...-in-fort-worth/

[rriojas71]

Always glad to get corporate tax dollars but I don't really consider the Alliance area to be Fort Worth even though it's in the city limits.

[Urbndwlr]

Always glad to get corporate tax dollars but I don't really consider the Alliance area to be Fort Worth even though it's in the city limits.

 

Well, as you know, it is.

Far North FW has grown so quickly that I think people in other parts of the city dont recognize it when they go there, so it does feel foreign.  And generic - think it doesnt fit with what many of us love about our city.  Not sure what to do about that.

[Randall]

North Fort Worth, is the home of flying dirt. 35W, 170, 114, 287 is the new heart beat of Fort Worth. No pandemic there!

[johnfwd]

Not to stray from the topic, but north Fort Worth is Fort Worth, whether a developer wants to call it Alliance or whatnot.  Same with new developments on all fringes of the city. 

 

Eventually, over a period of many years, growth in population as well as commerce and industry will fill in the gap between downtown and Alliance Airport and you won't know the difference.   Right now,   there's a lot of available land to build distribution facilities and corporate campuses.