University Submarket Emerging as Retail Hotspot in Fort Worth
For the last several years, Fort Worth’s retail market has posted a vacancy rate of 5 to 6 percent, suggesting that absorption is strong yet new construction is still permissible.
However, there is a difference between Fort Worth’s vacancy rate and that of comparably sized markets wherein 95 percent of the retail space is occupied. In Fort Worth, occupancy is evenly distributed from submarket to submarket. Because of this balance, the metro’s most thriving retail neighborhood — the university corridor — and the driving forces behind its growth often go overlooked.
Perhaps because it has only one campus that is located within a large city and even larger metropolex, Texas Christian University (TCU) doesn’t always get the credit it deserves for driving retail growth in Fort Worth. Rarely in recent history, however, has the connection between the two been more visible.
According to the school’s website, its total enrollment was approximately 10,400 students during the academic year ending in May 2017. Three years earlier, that figure stood at roughly 9,700.
That difference of 700 or so students may not seem like much at first. But it bears reminding that these are young adults attending a private university. This means that the amount of disposable income flowing into this submarket is increasing by a certain multiplier and largely being directed toward retail and restaurant expenditures.
But TCU has also been around for some 150 years, meaning retail developments around it have long since stabilized. In addition, land in this area is scant and construction costs are rising. Consequently, there are more retail redevelopment play, which speaks heavily to the growing presence of young people.
The most successful retail projects in Fort Worth’s University Submarket share the common thread of being destinations — places at which people genuinely want to come to, mingle and linger. These are locations that do not require prearranged plans, but rather invite a sense of spontaneity that is derived from having a variety of shopping, dining and entertainment options at one’s fingertips.
The Shops at Clearfork, located 4.5 miles from campus, captures the concept of open-air entertainment, dining and retail destinations perfectly. Owned by Simon Property Group and Cassco, the 26-acre, 400,000-square-foot center opened in fall 2017. The site embodies the history of the area, as the land was once used for the Edwards cattle ranch operation in the mid-19th century.
Shops at Clearfork features some of today’s preferred entertainment anchors, including a 30,000-square-foot Pinstripes Bistro Bowling and Bocce and an eight-screen, 36,000-square-foot AMC Theatres (which is not yet open). But the owners also opted to lease a 90,000-square-foot anchor space to a traditional big box fashion retailer — Neiman Marcus — suggesting that in this market, old-school retail players can still generate traffic. They just need a little more assistance.
Help has indeed arrived, not just in the form of entertainment anchors, but also via the diverse lineup of bars and restaurants. These include French restaurant Rise n°3, upscale eatery Twigs Bistro & Martini Bar, charcuterie B&B Butchers & Restaurant and City Works Pour House, a sports bar.
Jumping back east over the Clear Fork of the Trinity River is University Park Village. This 17-acre, 177,000-square-foot property was originally developed in 1995 and is located less than two miles from campus. The property recently underwent a major facelift to its storefront and overhaul of its tenant roster.
Some still view University Park Village as an upscale shopping destination, thanks to its lineup of high-end retailers, including J. Crew, Ann Taylor, Banana Republic and Williams-Sonoma. Following a change in ownership, Simon converted University Park Village into an open-air lifestyle center and the rest, as they say, is history.
Helping the property maintain its iconic status is its anchor tenant, Apple Store, which opened in 2008 and has since achieved sales in excess of $5,000 per square foot, according to CoStar Group. Without question, the close proximity of a large contingent of iPhone-wielding and Mac-using college students has enabled Apple Store and its neighboring tenants to achieve remarkable sales.
Located across the street from University Park Village is the latest retail destination in the corridor that is experiencing sizable, student-driven growth: WestBend.
Developed by Trademark Property Co., which has several retail redevelopment projects in the works across Texas, WestBend offers a more unique experience than its counterpart across the street. In addition to traditional shopping and dining, patrons at WestBend can enjoy spa treatments, art programs and walks along the nearby Trinity River. Retailers and restaurants in WestBend include HG Supply, Tyler’s, Warby Parker and Woodhouse Day Spa.
Within this three- to four-mile radius, Fort Worth’s white-hot retail market has embraced many of the national retail trends that are dominating headlines and creating both headaches and opportunities for retail developers.
As a major part of the Dallas-Fort Worth (DFW) metroplex, Fort Worth and its retail market should benefit from continued population growth in the foreseeable future.
This particular TCU-driven submarket has seen an exceptional amount of action in recent years, but it has not yet hit its ceiling. The University Submarket is also benefitting from the growth of households with disposable income, many of which work as doctors administrators or professors at or in connection with TCU.
Landlords here have shown a willingness to embrace the student population and to throw down large sums of money to reposition their centers in ways that appeal to this segment of the population. As such, we expect this submarket to exhibit some of the strongest rent growth and occupancy figures in both Fort Worth and the metroplex as a whole.
— By Chris Corbin, senior vice president, Venture Commercial Real Estate. This article first appeared in the June 2018 issue of Texas Real Estate Business magazine.