Warehouse Space Fourth-Quarter Data is In!
We recently read a report published by Cushman & Wakefield on the DFW Industrial/Warehouse market and decided to continue our discussion from last week. The report contains the 2019 data for this warehouse space and is worth a closer look. You can download a copy of the report here.
The Cushman & Wakefield report predicts that Dallas/Fort Worth will witness almost 47 million square feet of new warehouse space become available by the end of 2021. Forty-five million square feet will be leased.
The Need for Space
This puts DFW in the top market for warehouse building in the nation. According to the Cushman and Wakefield report, “The DFW industrial market continued it’s trajectory of positive occupancy growth and absorbed 12.2 million square feet in the fourth quarter of 2019. Net absorption outpaced new supply added in the fourth quarter by 1.2 msf.”
What is driving all of this need for warehouse space? One factor is the current trend for traditional retailers to enter the e-commerce arena. This fact demands space to store inventory prior to shipping. Another reason is the growth of third-party logistics providers. Unemployment is at an all-time low. The population of the DFW area is currently 7.7 million. According to Moody Analytics, of the 109,700 new positions added last year 19% were in the industrial sector.
Rental prices remained stable for 2019 at an average rate of $5.14 PSF. This marks a 1% increase over 2018. According to an article in The Dallas Morning News, “new leasing activity will be driven in large part by leasing among traditional and online retailers.”
Dallas/Fort Worth remains at the top of the nation with 46.3 msf predicted by the end of 2021. Compare this to California at 45.7 msf and Atlanta at 34.9 msf and you can see why the area is predicted to remain at the top.
Next week we look at what is happening with traditional brick and mortar retail shops.
Questions about appealing your commercial property values this year? Contact us here.