Retail real estate is performing better in Dallas-Fort Worth than anywhere else in the country, with 568,000 square feet of absorption in the second quarter, according to Cushman & Wakefield.
But downtown Fort Worth is still struggling.
An informal survey by the Fort Worth Star-Telegram found that 25 percent of ground-floor retail spaces in downtown Fort Worth are closed or empty, the outlet reported.
That is an improvement over the 31.4 percent vacancy rate reported in 2021, following the pandemic. But it’s well below the fourth-quarter retail vacancy rate of 4.6 percent across the metro, according to Partners Real Estate.
Earlier this month, reporters with the publication counted retail vacancies in a 104-square-block area, encompassing Lamar Street to the west, Weatherford Street to the north, Calhoun Street to the east, and Lancaster Avenue to the south.
Out of 188 commercial spaces counted, 47 were found to be vacant or closed. That included storefronts that were occupied but lacked visible business activity.
While the results are not scientific, city leaders and advocates viewed the decrease in vacancy as a positive indicator of downtown’s recovery and growth, supported by ongoing developments like hotels and apartments.
Sundance Square Management, owned by an entity of Ed and Sasha Bass, had the highest number of empty storefronts, with 20 of 141 spaces unoccupied. Even so, Sundance Square also had the most occupied properties, with a 73 percent occupancy rate.
Sada Tower LLC, an entity of Illinois-based Sada Capital Partners, had 17 vacant retail spaces out of 75 but is expected to fill some of them with tenants including restaurants Bocado and Belle Gente.
Despite its high retail vacancy rate, downtown Fort Worth is a major tourism draw for the region.
Sundance Square had 10.1 million visitors in 2022, and the Fort Worth Stockyards had 7.3 million visitors, according to JLL. Fort Worth as a whole saw an increase from 10.8 million visitors in 2022 to 11.4 million in 2023.
Fort Worth is leading the nation in hotel growth this year. Its supply has increased 5.3 percent, according to CBRE. The addition of over 3,500 hotel rooms has also boosted foot traffic. However, concerns have been raised about an oversupply of hotels potentially exceeding the demand generated by conventions, which mostly attract budget-conscious visitors.
Besides hotels, developments like the Deco 969 — Fort Worth’s first luxury rental highrise — could return some vibrancy to the central business district.
Fort Worth’s downtown retail trends mirror national patterns, with fewer office workers commuting daily due to remote work, said Andrew Matheny, a senior research manager at Cushman & Wakefield.
There is a silver lining to downtown Fort Worth’s high retail vacancy rate.
“New businesses that want to be on the ground floor can find a place in Sundance Square where they haven’t been able to in the past,” said Andy Taft, president Downtown Fort Worth Inc. “That’s certainly an opportunity.”
— Andrew Terrell
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