Demand for Dallas-Fort Worth industrial real estate set a record in the second quarter.
Warehouse and distribution buildings have been the hottest sector in commercial property since the start of the COVID-19 pandemic. And North Texas is one of the country’s top industrial development markets.
Industrial leasing in new warehouse buildings in the area hit a high of 9 million square feet in the just-completed quarter, according to a new report by commercial property firm Transwestern.
Developers started 8.6 million square feet of speculative industrial projects in the area, bringing total construction to more than 26 million square feet.
“Leasing velocities are expected to remain strong over the next 12 months, creating ripe conditions for developers to break ground on new speculative projects where feasible,” Transwestern research manager Andrew Matheny said 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 largest warehouse leases in the second quarter were by logistics and consumer products firms.
California-based Comptree, an e-commerce fulfillment firm, took more than 576,000 square feet of space in Grand Prairie, and GSM Outdoors leased 494,000 square feet for a new distribution center at DFW International Airport. Logistics firms Mainfreight and Kenco Group leased big blocks of warehouse space in North Fort Worth and southern Dallas.
With all the leasing activity, industrial building vacancy rates in the D-FW area fell to just over 6%.
“Demand for new construction alone is not sufficient to explain the jump in leasing activity, which suggests that pent-up demand from small and mid-size users is creating additional tailwinds for the market,” Transwestern analysts said in the midyear report.