Dallas-Fort Worth is outpacing the rest of the nation in construction of industrial space. With over 60 million square feet of space currently under construction in Dallas Fort-Worth, the industrial market is definitely in high growth mode right now. Furthermore, according to data from CoStar, DFW saw absorption of 42.2 million square feet of industrial space this past year alone.
Demand for industrial space has hit a record high every single quarter of 2021, and vacancy rates have now fallen below the 10-year average of 7.1%, dropping to just 6.4%, according to JLL.
What’s fueling the demand? An ever-increasing demand for e-commerce space, the restructure of supply chains, and a boom in population growth have all contributed to the skyrocketing demand and procurement of industrial space throughout DFW and other hot spots in the nation.
One WHOPPING EXAMPLE is the recent announcement by USAA, Seefried to break ground on nearly 1.3 Million-Square-Foot Distribution Center in early 2022. It will be DFW’s largest speculative distribution center ever, coming in at 1,272,240-square-feet, and poised to be built on Highway 80 in Forney, Texas. Forney is one of the fastest growing suburbs in the country, with a population that has doubled in the past decade, according to CoStar.
“The project is planned for multiple tenants and “large-scale, e-commerce, distribution and manufacturing,” according to a press release by Seefried. “Forney has seen tremendous growth over the last 24 months, as the industrial base has rapidly expanded to include key logistics facilities for Goodyear, Amazon and other top name companies. These additions led to Forney being named one of the fastest growing cities and school districts in Texas and Kaufman County recently being named the third fastest growing county in America.”
The 3rd quarter of 2021 marked the 23rd consecutive quarter that more than 20 million square feet of space was constructed! In addition, the industrial sector in Dallas-Fort Worth grew by 10,833 jobs—1 percent—in the third quarter of 2021, according to Moody’s Analytics.
So, what is the effect on rent prices? Rent prices, of course, have followed the same course, steadily increasing each and every year and pushing direct rent up to an average of $5.37 PSF and Sublease rents to $4.63 PSF throughout the DFW area.
Looking into the future, what’s next? With absorption outpacing deliveries this year for the first time in the past 5 years, demand is not forecasted to slow down anytime in the near future and rent prices are expected to only increase. In fact, it is estimated that at least 1 billion additional square feet of space will be needed in the country by 2025, according to JLL’s Q3 Industrial Report. DFW’s central location and distribution position will also continue to ensure its own strong growth into next year and as far as we can see.
What does all this mean? It’s a great time to construct, acquire or sell industrial space in DFW. If you have any questions or we can help you with any of your real estate needs, M&D Commercial’s knowledgeable agents are always available and would be happy to provide you with a free consultation anytime. Please reach out to us at (972) 772-6025.
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