The commercial real estate market in the Dallas/Fort Worth area has been seeing record demand over the last few years, making this area one of the most competitive commercial markets in the country.
Industrial space and warehouses currently lead local and national demand, with the last quarter of 2016 registering the highest amounts of leased warehouse space in the Dallas area. Combined with the total amount of commercial space leased, this makes the Dallas/Fort Worth area one of the most successful and desirable nationwide commercial markets in all sectors.
Demand Leading the Nation
According to analysts, industrial space leasing has been in high demand in the country over the last three years. Nationwide, the industrial sector is experiencing a record 27 quarters of occupancy increases, with no signs of slowing yet. The demand for warehouse space has been the highest in the Dallas/Fort Worth area, with this sector of commercial leasing surpassing all others. This is in part due to the growth of ecommerce and retail in the region, as more companies have begun to locate within this area.
The D/FW market surpassed all others at the end of 2016 with 5.3 million net square feet of warehouse space leased. The second most popular markets were Houston and Chicago, both with 4.1 million net square feet of leased warehouses. Total D/FW leased space throughout 2016 was a healthy 23.7 million net square feet. This was 43% higher than 2015 totals, which came in at 16.5 million net square feet leased.
Dallas Developers Working to Fill Demand
With the continually rising demand for industrial space in the D/FW area over the past few years, commercial developers are working hard to fill the need. Last year alone more than 22 million square feet of new warehouse space was completed and leased. Most of this was built on speculation of a growing market for more warehouses and decreasing vacancy rates.
There is currently more than 17 million square feet of industrial space under construction, as the demand for warehouses keeps growing. The area is setting records in both the production of this type of commercial space and also in how quickly the space is being leased. Companies like Amazon, Wayfair, American Tire Distributors, and United Technologies account for a large portion of the leasing, which has mainly been to new businesses coming to the area, not relocations.
What does this mean for local business owners looking for industrial space and warehouses in the Dallas/Fort Worth area? As long as demand stays high and commercial developers continue to deliver more warehouse space, it suggests that D/FW remains a strong market in the U.S. and one of the best areas in which to locate a new businesses.
Demand for both industrial and office leases make the region highly attractive for many types of businesses, strengthening the local commercial market even more. Record low vacancies in the area combined with the fast absorption of new construction also suggest that lease rates in the industrial sector will be competitive!