Dallas and Houston are tied in the Business Journal's Downtown Vitality Index.
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Dallas is near the top when it comes to downtown recovery post-pandemic, ranking first among Texas' four largest cities.
That's according to the latest Downtown Vitality Index. business journal, The study analyzed a variety of metrics that impact downtown activity to determine which central business districts are best positioned for success in a post-pandemic world.
Dallas recorded a Downtown Vitality Index score of 58.41, ranking 11th out of 44 markets analyzed. Business Journal. The city was just ahead of Houston and followed by Greensboro and Raleigh, North Carolina. San Antonio and Austin were further down the list.
“When the pandemic hit in 2020, we were told it would take five years for tourism to recover,” said the president and CEO of Downtown Dallas, a company that leads economic development efforts in the city center. says Jennifer Scripps. “It happened much faster than we expected.”
This score is based on a weighted formula that considers the following factors:
- Trends in urban office commercial real estate
- Urban/Central Business District Hotel Occupancy
- Percentage of people working from home
- Downtown cell phone usage compared to pre-pandemic levels
- Trends in the number of public transport users
- Metro population growth momentum
The formula weights office space trends, percentage of people working from home, and downtown cell phone usage as the most important factors. With the exception of cell phone usage in downtowns, category scores are aggregated using percentiles that show how downtowns across the country compare. A score of 0 is the worst and a score of 100 is the best.
While clearly these are not the only factors contributing to downtown vitality, this project, in conjunction with the recent Future of Cities event, puts downtown recovery into context and shows outstanding performance on these metrics. The aim is to shine a spotlight on companies that
Miami topped this year's Downtown Vitality Index thanks to strong momentum in office real estate, a strong tourism economy and a work-from-home rate that remains just above the national average of 9%. Last year, another Florida city, Tampa, topped the list.
Here's a breakdown of each metric, the top performers in the category, and key takeaways.
Downtown office commercial real estate
What we looked into: We analyzed central business district availability and office space absorption rates for CoStar Group, Jones Lang LaSalle, and Cushman and Wakefield.
Local photos: More than a fifth of office space in downtown Dallas remains vacant, with a vacancy rate of 21.6% at the end of 2023, a slight improvement from 22.7% at the end of 2022. The absorption rate, which is calculated by subtracting vacant space from rented space, was also negative last year. Year. Major buildings such as the Trammell Crow Center, Chase Tower, and Bank of America Plaza will soon lose anchor tenants who are headed uptown for new space.
“There are a lot of trends that we're experiencing in Dallas as well as across the country, a flight to new buildings coming on line and a reduction in existing leases,” Scripps said. “That being said, we have spoken with a new tenant downtown who has recently expanded its footprint.”
Key points: Several tech-heavy metropolitan areas, which are struggling to backfill empty space, score low on this index and have seen significant new office space construction in the years leading up to the pandemic. The same is true for some cities. Several fast-growing Sunbelt markets stood out in this category.
What we looked into: Using data from CoStar or local tourism associations, we tracked occupancy rates for hotels in central business districts or urban areas and how those occupancy rates have rebounded since the onset of the Covid-19 pandemic.
Local photos: Hotel occupancy in the Dallas metropolitan area in 2023 has rebounded to about 93% of 2019 levels, according to Coster, which reflects S&P credit analysts' expectations for potential refinance loans at the downtown Sheraton hotel. This can be seen from the fact that they reported a significant improvement in Future redevelopment of the Kay Bailey Hutchison Convention Center is expected to further increase the city's economic vitality. Additionally, big events like April's solar eclipse draw large crowds downtown, and the FIFA World Cup is expected to do the same.
“When you feel it on the streets, it energizes the city and people are walking around at night and on weekends, whether they're business travelers or leisure travelers,” Scripps said.
Key points: The recovery has been very strong in commercial and tourism centers such as New York, Boston, and Washington, D.C., all with recovery rates of at least 89%, but some smaller regions such as Birmingham, Alabama, have seen recovery rates of at least 100%. % recovery has become even stronger. That's pre-pandemic levels.
Local photos: Hotel occupancy in the Dallas metropolitan area in 2023 has rebounded to about 93% of 2019 levels, according to Coster, which reflects S&P credit analysts' expectations for potential refinance loans at the downtown Sheraton hotel. This can be seen from the fact that they reported a significant improvement in Future redevelopment of the Kay Bailey Hutchison Convention Center is expected to further increase the city's economic vitality. Additionally, big events like April's solar eclipse draw large crowds downtown, and the FIFA World Cup is expected to do the same.
“When you feel it on the streets, it brings life to the city and people are walking around at night and on weekends, whether they're business travelers or leisure travelers,” Scripps said.
Key points: The recovery has been very strong in commercial and tourism centers such as New York, Boston, and Washington, D.C., all with recovery rates of at least 89%, but some smaller regions such as Birmingham, Alabama, have seen recovery rates of at least 100%. % recovery has become even stronger. That's pre-pandemic levels.
But as Scripps puts it, there are many “gray areas” downtown between these middle points. It's not an easy walk between the convention center and other downtown attractions such as the farmers market, or from the Discovery District to the West End. This is a project that downtown developers The Headington Company and Pacific Elm Properties have planned to interconnect the West End and the Arts District, and connect the rest of downtown with 30 acres of green space and towers along Field Street. This is one of the problems I would like to solve.
Key points: Average downtown activity is now 74% of pre-pandemic levels, according to the survey's latest data for spring 2023. Las Vegas is a special case because of its focus on tourism, leading the nation at 103%. Among more traditional metropolitan economies, top-performing cities include San Jose, California; Miami; and Phoenix. At the other end of the spectrum, St. Louis, Minneapolis, and Louisville, Kentucky, both have activity levels below 56% of pre-pandemic levels.
What we looked into: The U.S. Census Bureau's latest American Community Survey shows the percentage of each metro's employees who work from home. For the purposes of the Downtown Vitality Index, the higher the percentage of people working from home, the lower their score on this metric. That's because many communities say a high percentage of people working from home is a factor limiting activity downtown.
Local photos: Only 13.7% of people in Dallas worked from home in 2022, according to Census data. The Dallas area, excluding Fort Worth, also ranked No. 1 in his Placer.ai report, which analyzed February pedestrian data for office properties across 11 major U.S. metropolitan areas. This comes in the wake of reports that major financial institutions with large corporate offices in Dallas-Fort Worth are strictly enforcing return-to-work mandates nationwide.
Key points: Unsurprisingly, technology hubs such as Silicon Valley, North Carolina's Research Triangle, and Austin, Texas, generally still have the highest percentages of people working from home, with the average hovering around 20%. , which is well below the national average of 9%.
What we looked into: The metric is based on data from the U.S. Department of Transportation and looks at trends in public transit ridership since 2019 and one-year changes from 2022 to 2023.
Local photos: Dallas Area Rapid Transit ridership is still down compared to pre-pandemic levels, but increased by double-digit percentages in 2023 compared to 2019. While construction work continues on the agency's new Silver Line trains, DART CEO Nadine Lee emphasizes improvements to daily transportation. operation.
“I want to provide DART with a new strategy,” Scripps said. “They've made a big shift in recent years to focus on security, safety and rider experience, and it's paying off, and it shows in numbers like these.”
Key points: Many transit systems have struggled since the pandemic, with the average system still down 29.6% compared to 2019. Metro, with average levels of remote work and a strong recovery in hotel occupancy rates, also performs well across public transport metrics, as do recently improved systems. I have upgraded my system.
What we looked into: We analyzed the U.S. Census Bureau's latest population growth estimates, taking into account population growth since the pandemic and the one-year increase from 2022 to 2023. These are metropolitan-level numbers and are not limited to downtown, but they do indicate which areas have the strongest population growth. Population growth is a factor that energizes downtown.
Local photos: One category in which DFW is a national leader is population growth, with an estimated addition of more than 150,000 residents across the metroplex from mid-2022 to mid-2023, a 5.7% population change since 2020. did. But will it reflect the sheer numbers seen in the suburbs? For robust business downtown? That remains to be seen.
Key points: The Sunbelt remains the star, dominating population metrics this year as well. Austin, Dallas, Houston, and San Antonio in Texas all had three-year growth rates of at least 4.76%, while Orlando and Jacksonville in Florida hovered around 5% and 6.5%, respectively. A closer look at county-level data also shows some parts of the Midwest are picking up the pace.
Expensive coastal metropolises such as Los Angeles, New York and San Francisco continue to lag behind population growth.
Managing Editor Will Anderson contributed reporting.
