DFW Market Report – Q2 2019
The Hot, Wet & 40 Foot High American Summer
By Ward Richmond
DFW explodes into mid 2019 with 30 Million SF under construction. As an FYI, this is comprised of 101 new buildings. 10 of these new buildings (about 5.7 Mil SF) are Build to Suit facilities and 91 of them (24.7 Mil SF) are being built on spec. This is an extraordinary amount of concrete.
DFW finished Q2 2019 with 6 Mil SF in Total Industrial Absorption bring YTD absorption number to a rock solid 13 Mil SF. Our 850 Mil SF market is hovering at 6% vacancy which is very healthy.
Rates are holding steady in the Big Box market (250K SF +) in the $3.80 psf NNN range while Non Big Box product continues to experience high levels of demand as rates have skyrocketed from $4.50 in Q2 2018 to $4.90 today.
DFW market activity remains strong with 3 different 1 Mil+ SF deals getting signed so far this year. Multiple other 250K SF+ monster deals keep slamming down with consistency trying to help our absorption numbers stay in line with the absolutely staggering amount of product that is being developed.
We are keeping our heads down and working hard to continue helping our customers meet the ever-growing demands of Speed and Flexibility in their supply chains in an effort to maximize corporate real estate value and efficiency.
Q1 2019 TOP TEAM RICHMOND PROJECTS
- Ace Hardware – Wilmer, TX – 900,000 SF
- FNA – Mesquite, TX – 400,000 SF
- 4000 Dan Morton Dallas, TX – 208,948 SF Investment Sale
- TForce FInal Mile – Elk Grove, IL – 87,600 SF
- Schenker International – S.A. de C.V. – Juarez, MX – 86,627 SF
Q1 2019 TOP DFW DEALS
- El Pedregal S.A. Food & Beverage distributor lease 1.54M SF at DFW Airport from Bandera
- Callaway Golf leased 783,000 SF in Fort Worth from Hillwood
- Systemax leased 489,804 SF at 2119 N I-35 N in South Dallas from Hillwood
- Petmate leased 468,300 SF at Park 20 in Lancaster from SV Captial
- Capstone Global LLC renewed 248,096 SF in Arlington from Emerik Properties
Construction has not stopped rental rates from increasing as rates bounced back from last quarter’s decline to come in at $3.80 this quarter.
Despite all of the construction activity, the vacancy rate remains strong at 10.5%. While leasing activity has been robust thus far, only 22% of the speculative development has been pre-leased, leaving close to 15 million SF of new space to come on the market.
“Go Big-Box or go home” continues to be the mantra in DFW with several new buildings kicking o during the quarter. These new builds are keeping the under construction pipeline of close to 24 million SF in record territory for the metroplex.
Absorption of almost 9 million SF through mid-year 2019 is on pace to eclipse the 2017 record of 18.8 million SF.
MEET THE TEAM MEMBERS
Ward Richmond has over twelve years of experience specializing in industrial real estate, and has negotiated over 500 transactions while working in over 100 cities across the USA, Canada, and Mexico. Several publications have featured Ward for his expertise in this field including the Wall Street Journal, Dallas Morning News, and Dallas Business Journal. He also serves on Colliers International Industrial Advisory Board, and is a member of the Logistics & Transportation Solutions Group.
WARD RICHMOND, SIOR
Executive Vice President
Client Services Specialist
The Gladiator Group is supported by Colliers International Research Team
ON THE ROAD AGAIN
Sept 4 2019: Annual Interface DFW Industrial Conference, Dallas, TX
Sept 14-18 2019: IAMC Fall Forum, Milwaukee, WI
Sept 24-27, 2019: Colliers International Supply Chain Conference, San Diego, CA
Oct 8-9, 2019: Keller Logistics Customer Summitt, Deance, OH
Oct 15-17, 2019: Armstrong 3PL Conference, Chicago, IL
0ct 26 2019: Arete Live, St. Louis, MO
Nov 8-11, 2019: Summit LA19, Los Angeles, CA