The North Texas industrial market has set another record – Dallas Business Journal – Dallas Business Journal

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Nearly 11.9 million square feet of industrial space was absorbed during the second quarter, the highest number ever recorded in North Texas, according to CBRE.
With 10.3 million square feet of net absorption during the first three months of the year, the Dallas-Fort Worth market has already seen 22.2 million square feet of absorption since the beginning of 2021. This is particularly astonishing considering that 2020 saw 27.4 million square feet of total net absorption. This is the 43rd consecutive quarter of positive industrial absorption in DFW and the sixth consecutive year with more than 20 million square feet of industrial demand. Over the last 12 months, 37.2 million square feet of industrial space have been absorbed locally.
“This strong demand is made up of tenants from a variety of businesses including distribution, consumer products and fulfillment operations. We are seeing demand across a broad spectrum of sizes and uses, with many requirements being new to the area and coming from out of state,” said Nathan Orbin, executive managing director at Cushman & Wakefield, in a prepared statement.
The largest lease signed during the second quarter, according to Cushman & Wakefield, came courtesy of HomeGoods, which is taking a 1 million-square-foot build-to-suit warehouse in south Fort Worth. The quarter’s largest sale happened in north Fort Worth, where San Diego-based Realty Income Corp. acquired a 1.02 million-square-foot Amazon fulfillment center.
Like the first quarter, every industrial submarket saw positive net absorption, according to CBRE. The most absorption was seen in the Great Southwest (2.7M-SF) and Northeast Dallas, including Allen and McKinney (1.9M-SF). With so much demand and increased prices on things like steel, rents have continued to climb. According to Transwestern, triple net industrial rents are now averaging $5.13 per square foot, while triple net flex rates have risen to $10.25 per square foot.
New deliveries still haven’t been able to keep up with absorption. Just over 7.2 million square feet of new space was delivered in the last three months, down from 8.3 million square feet in the first quarter. Over 27 million square feet of space remain under construction, with most being found south of Dallas (8.6M-SF) and in north Fort Worth (7.4M-SF).
Over 40% of new construction south of Dallas has been spoken for, while nearly 22% of space in north Fort Worth has been preleased. Preleasing is most prevalent in East Dallas and Northeast Dallas, where 100% and 84.1% of all space respectively has been preleased, according to CBRE.
As a result of bustling demand and new construction that can’t keep up, vacancy fell 80 basis points to 4.6%. Even when vacancy was at 5.4% during the first quarter, it was at its lowest point in over a decade. The submarkets with the lowest total vacancy today are Great Southwest and South Stemmons, which are at 3%.
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