A Look at The DFW Industrial Market for 2019

 In BLOG

Looking back at the 2019 local Industrial Market, one thing is obvious.  North Texas still has a fair amount of open space when we compare it to other large metropolitan areas.  And developers are filling that space with Industrial warehouse buildings faster than any other type of asset class in the commercial real estate space.  According to a recently published Dallas Morning News article, warehouse space is being built at a rate that is ten times greater than retail and six times higher than office space. 

Amazing Growth

In 2018 Dallas was second in the nation for industrial property sales. More than 26 million square feet of space were delivered, of which almost 24 million was absorbed.  Fourth-quarter figures have yet to be compiled. But as we look at 2019 through the third quarter, it has surpassed the 2018 figures, approaching 37 million SF. This represents more industrial square feet than Atlanta and Houston combined.

The Good News

In an article in the January 8 edition of the Dallas Business Journal, Colliers told the reporter that overall absorption in the Industrial Market was not as strong as 2018, but that leasing certainly was. He also stated that they had observed an increase in large deals. Georgia Pacific leased 1 million square feet in South Dallas and Dematic leased 700,000 feet in Alliance Texas.

Even with all of this space, things are getting tight in and around Dallas city proper and companies are looking at locations further out for their industrial warehouses in locations such as Denton and South Fort Worth.

Due to the recent influx of company relocations and resulting population growth in the DFW area, combined with its moderate climate and central location, North Texas has become an extremely desirable area for this asset class.

e-commerce warehouse needs are growing.
E-commerce warehouse demands are growing with no end in sight.
Photo by Marcin Jozwiak on Unsplash

The huge growth in the e-commerce area has demanded well-located, modern warehouse facilities from which to house and ship inventory. With online sales becoming the norm rather than the exception, companies are going to need more locations to store all of that inventory before it’s shipped out. North Texas’s central location makes it ideal for this purpose.

This brings up another trend. Build-to-suit facilities are growing in popularity. Speculative builds have seen an increase as well. According to a report published by Bradford Companies, vacancies have remained flat at 6.1% due to these facts. Rental rates across the board have skyrocketed even in the Class B and C categories.

For More Information

The Bradford Companies produced a comprehensive Q3 report on the Industrial Market in the DFW area. You can read that here. Read about how we can help you with your real estate taxes and assessed value on industrial properties you own here.

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