Commercial real estate’s industrial sector has experienced some torrid growth due to what seems like a never-ending demand for space by e-commerce and third-party logistics users. And even though millions of square feet of new product has come online in the last few years, vacancy rates have stood between 4.8 percent and five percent over the last two years, according to Colliers International’s third-quarter U.S. industrial report (download here).
So, developers keep building, and there might not be an area that’s seeing more growth than Dallas and its surroundings.
Dallas-Ft. Worth has just under 37 million square feet of industrial real estate under construction currently, about as much as what is going up in the U.S. Northeast, says Colliers’ national report.
In a regional Colliers report on the market, the firm points out that big-box development is the main Dallas driver, with 56 different warehouse/distribution centers going up around the metro.
The largest of the projects tracked by Colliers is the 1.5-million-square-foot 9314 W. Jefferson Blvd., in the West I-30 Corridor submarket. Developer First Industrial is building the site for The Home Depot over 154 acres, to be delivered during the first quarter of 2020.
In the Alliance submarket, in the Fort Worth area, there is a speculative project of just over 1.2 million square feet underway at Hillwood’s Westport development site. Ceiling heights in that project, which will see its first phase open in the current quarter but could grow to two million square feet, are set at 40 feet.
There is also a 1.2-million-square foot in the outlying Metroplex being built at Highway 80 and Forney Road. This development, in the town of Forney, will be built as a distribution center for Goodyear by Petro-Hunt.
Besides these three mega projects, the Dallas metro has another four other developments at one million square feet or more going up around the region, says Colliers’ Dallas-focused report. In all, there is 26 million square feet of speculative construction underway, with about 25 percent of it preleased.
The national report scores Dallas high in industrial measurements other than new product being built. Year to date as of the end of the third quarter, there was just over $3.3 billion in industrial transactions, the third highest amount in the country, behind Los Angeles, Chicago, and California’s Inland Empire.
With 16.3 million square feet leased during the period, only Chicago saw more activity, with 17.6 million square feet.
Industrial real estate doesn’t seem to be slowing down any time soon, and Dallas is in the thick of the substantial growth.
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