Demand for industrial real estate in Dallas-Fort Worth set a record high in the second quarter.
Warehouse and distribution buildings have been the hottest sector in commercial real estate since the start of the COVID-19 pandemic.
And North Texas is one of the nation’s major industrial development markets.
Industrial leasing of new warehouses in the region hit a record 9 million square feet in the just ended quarter, according to a new report from commercial real estate company Transwestern.
The developers launched an 8.6 million square foot speculative industrial project in the region, bringing total construction to over 26 million square feet.
âRental speeds are expected to remain strong over the next 12 months, creating the right conditions for developers to launch new speculative projects where possible,â said Andrew Matheny, research director at Transwestern, in the new report. .
Most of the construction is in southern Dallas County (8.9 million square feet), North Fort Worth (5 million square feet) and South Fort Worth (4.1 million square feet), according to Transwestern.
Some of the biggest warehouse leases in the second quarter were with a logistics and consumer products company.
Comptree, a California-based e-commerce order fulfillment company,
has taken over 576,000 square feet in Grand Prairie and GSM Outdoors has leased 494,000 square feet for a new distribution center at DFW International Airport. Logistics companies Mainfreight and Kenco Group have leased large blocks of warehouse space in North Fort Worth and south of Dallas.
With all the rental activity, the vacancy rate for industrial buildings in the D-FW zone has fallen to just over 6%.
“Demand for new construction alone is not sufficient to explain the rise in rental activity, suggesting that pent-up demand from small and medium-sized users is creating additional favorable winds for the market,” said Transwestern analysts said in the mid-year report.