Real Estate Forecast 2022: Experts assess the market amid changing landscape

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Although new variants of coronavirus kept the economic recovery on a roller-coaster ride throughout 2021, a steady stream of newcomers helped the commercial real state market in Fort Worth and Tarrant County ride out the unpredictability and even fare better than expected.

“There were no surprises,” said Sarah LanCarte, owner of LanCarte Commercial, who moderated a panel discussion to lead off the 2022 Tarrant County Commercial Real Estate Forecast hosted by the Real Estate Council of Greater Fort Worth.

The forecast was held Thursday at the Fort Worth Convention Center, returning to fully in-person participation this year after going virtual in 2021 due to the pandemic.

Overall, panelists as well as industry specialists, who presented updates of individual sectors within the market, were upbeat about 2021 results although there were a few areas of difficulty.

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“Retail and office were hit the hardest,” LanCarte remarked.

While the pandemic prevented a robust return of workers to their office jobs, there was a rebound throughout 2021 and that trend is likely to continue, barring a major resurgence of Covid 19, said Jessica Miller Essl, co-president of M2G Ventures, a commercial real estate investment, development and consulting firm specializing in adaptive reuse and industrial properties.

Even so, the office environment of the future may be a departure from the office work setup of the past. There is already a shift underway that Essl and others described as a “flight to quality.”

Instead of office space in tall tower buildings, offices of the future will likely be some type of hybrid model, combing a mix of work-at-home with in-office work.

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“Hybrid is here to stay,” said Cannon Camp, a senior vice president with JLL in Fort Worth.

Business and professional services will likely favor more in-office days while the technology industry will likely lean toward remote.

The in-office experience of the future will likely be sprawling campuses over large campuses on large acreage tracts featuring extensive landscaping, walking paths and even water features.

Indoor amenities will include cafes, workout facilities, wellness centers and lounges, Camp said.

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The commercial real estate sectors still struggling are retail, restaurants and hotels, according to Amber Calhoun, a commercial real estate broker at Graham Property Brokerage.

The pandemic shutdowns dealt a painful blow to those industries and continue to impact travel and restaurant dining.

Retail was already shifting more toward e-commerce and online shopping before the pandemic and has continued to move in that direction, Calhoun said. However, more people are returning to in-person grocery store shopping because “people like the idea of picking their own produce.”

A shortage of workers and competition to hire workers has driven up labor costs, which also have adversely impacted restaurants and hotels, she said.

Among the commercial real estate sectors continuing to prosper and thrive is the industrial market, where the DFW market remains the second largest in the United States, according to Reid Goetz, a senior vice president for Hillwood.

The multi-family market also performed well in 2021, driven by strong demand from population growth in the Dallas-Fort Worth area although supply chain and worker shortages slowed construction starts in 2021, resulting in bumps in rental prices. That market is on par to do extremely well in 2022, said Drew Kile, senior managing director for 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, who all spoke about their agencies’ growth and development outlook for 2022 and their efforts at inter-agency collaboration to improve the lives of residents with expansion of early childhood education opportunities helping women return to the workforce, improving public health and tackling homelessness, among other priorities.

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