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Dallas industrial market absorbed 3.5M square feet in Q4: Report

Dallas-Fort Worth’s industrial market closed 2016 on a positive note, with 3.5 million square feet of positive absorption in fourth quarter of 2016, according to “Industrial Real Estate Outlook – Q4 2016,” a research report from Transwestern. 

The overall vacancy rate, including sublet, was 6.7 percent at the end of the fourth quarter, an increase of 70 basis points year-over-year. Direct vacancy was 6.5 percent in the same time period, compared to 5.8 percent at year-end 2015.

 

Despite the high demand for space in the market, vacancy rates are anticipated to tick upward as additional speculative buildings are delivered in 2017.

The Dallas-Fort Worth area has performed exceptionally well since the recession, recording positive absorption each quarter since the end of 2010. Developers have addressed this record demand by delivering over 72 million square feet since 2012, with over 3.2 million square feet delivered in first quarter 2017 so far. Concerns about overbuilding have been assuaged in part due to the 40 percent pre-leasing activity on the 23.3 million square feet currently under construction. 

“The availability of land, relatively low-cost of doing business, and access to both domestic and international markets make the region a naturally good fit for logistics firms and trade-related operations,” said Ryan Tharp, North Texas director of research. “Simply put, the Dallas-Fort Worth industrial market is succeeding because of the region’s strong fundamentals and its continued ability to attract capital investment.”

· Overall vacancy in Fort Worth recorded 6.4 percent at the end of the fourth quarter, with positive net absorption of 9.7 million square feet at year end.


· Dallas ended the year with 13.4 million square feet of positive net absorption and an overall vacancy rate of 6.8 percent.
 
· Warehouse/distribution properties in D-FW made up the bulk of the net absorption with 20.8 million square feet, while flex and manufacturing both recorded a little over 1 million square feet each.
· Leasing activity for D-FW totaled 31.5 million square feet at the end of 2016 with the majority of activity taking place in the Southeast Dallas, Northeast Tarrant/Alliance and Meacham/Fossil Creek submarkets.


Download the full report.

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