Warehouse and distribution tenants consumed nearly three times more commercial space in North Texas than was added to the market in the second quarter.
Commercial real estate company Cushman & Wakefield Inc. estimates that net industrial rent over the past three months has been nearly 8 million square feet of buildings. That far exceeded the newly opened warehouse, which was just 2.7 million square meters.
By the first half of 2021, warehouse tenants in the Dallas-Fort Worth area have taken nearly 13.4 million square feet of industrial space off the market.
“This strong demand is coming from tenants from a wide variety of businesses including sales, consumer goods and fulfillment,” said Nathan Orbin, executive managing director of Cushman & Wakefield. “We see demand in a wide range of sizes and uses, with many requirements new to the region and coming from abroad.”
The largest new industrial leases signed in the second quarter included a 1 million square foot shipping center for retailer TJ Maxx in South Fort Worth. And Henry Schein Inc, the medical supplies distributor, took up 810,908 square feet in the Alliance Airport area of North Fort Worth.
The Great Southwest Industrial District along Interstate 30 between Dallas and Fort Worth had the largest lease area in the second quarter at 1,867,000 square feet. And Mesquite recorded more than 1.4 million square feet of net rent.
The D-FW industrial construction market was one of the hottest commercial property sectors during the COVID-19 pandemic, and activity is showing no signs of slackening.
Tenants are taking up storage space faster than developers can finish buildings.
“Total vacancy fell significantly in the last quarter to a healthy 6.9%,” said Kurt Griffin, executive managing director of Cushman & Wakefield. “This is good news for market fundamentals as construction activity remains high at over 28 million square feet.
“And there doesn’t seem to be any slowdown in housing starts given the recent increases in land and building materials prices,” Griffin said. “The construction pipeline remains very active and will continue this trend well into 2022.”
According to Cushman & Wakefield, the most industrial buildings are in southern Dallas County (6.2 million square feet), South Fort Worth (6.1 million square feet), and the Alliance area of North Fort Worth (4 million square feet).
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