By Ward Richmond
2018 came to a close and we have seen another year of tremendous industrial real estate activity in the DFW Metroplex. Not to mention, the world!
My sentiments about 2018 are nothing other than warm and fuzzy! We are a very grateful group of Gladiators! We did not set absorption records; nevertheless, activity was undoubtedly strong and steady. Please, keep in mind that what I call “steady” might be described by others around the world as “absolutely freaking explosive.”
DFW finished the year with just over 19 Million SF in Total Industrial Absorption, while delivering almost 25 Million SF of new product with another 23 Million SF under construction as we maintain a vacancy rate in the Low 6’s at 6.3%. Big Box rates have bumped up from $3.75 to $3.82 to reflect Investor confidence in the market as well as the inevitably rising construction and material costs.
Consumerism continues at an all-time high; hence, the absurd demand for Big Box Distribution Centers. We also expect to see a major spike in shipping numbers for Q4 2018 due to distributors trying to get as much product as possible into the USA before the new proposed trade tariffs take effect.
Third Party Logistics companies (3PL’s) need to be held responsible
for the bulk of industrial leasing activity as they fight to keep Brands
profitable and alive in the Age of Digital Commerce by providing their
customers with modern distribution solutions.
3PL’s lead the way nationally accounting for about 30% of the USA “big box” (100k SF+) industrial absorption in 2018 signing 115 Million SF of bulk distribution deals! Other key contenders responsible for absorption in 2018 include Retail, Manufacturing and eCommerce companies.
If you are a Retail Brand and you can’t figure out how to ship your product to customers via next day delivery (Think, Toys R Us), you are going to lose your customer base to Amazon. End of story. The only way to fight back and battle Amazon is to have an Amazon-like distribution infrastructure which is impossible for any brand to duplicate (unless that brand is WalMart) and that is the value gap being filled by these solution-hungry 3PL’s as they continue to take down space like a pack of Amazonian warriors!
2018 was an incredible, record year for our team. We closed over 4 Million SF of transactions, globally, as we continue to be recognized for our ability to deliver innovative corporate real estate solutions to dominant Logistics, Retail and Manufacturing companies. We plan to continue to build and grow in 2019 while develop new, massive value offerings for our customers.
Call me anytime to discuss Industrial Real Estate solutions, Supply Chain & eCommerce trends or even if you just want to talk about Tony Robbins!
“If you’re not getting better, you’re getting worse. Staying the same isn’t an option.”
To get further inside my supply chain brain,
please check out my website and blog:
2018 TOP TEAM RICHMOND PROJECTS
AVG Qoated Rate:$3.82 SF
200,000-499,999 SF: 380/59
500,000-749,999 Sf: 96/16
750,000+ SF: 64/7
Vacancy rose again for the sixth straight quarter and finished the year 1.8% higher than at the start of the year ending 2018 at 11.2%. This is the highest vacancy rate since Q1 2015.
Overall for 2018 the market delivered 41 Big-Box buildings for a total of 19.6 million square feet. These totals are second only to 2017 when 44 buildings with 22.4 million square feet delivered. Construction is still strong as well with 29 Big-Box buildings totaling 15.2 million square feet scheduled to deliver over the next 18 months.
Average rental rates were flat for the year ending at $3.82 by the close of the 4th quarter.
Absorption for the quarter was over 3.4 million square feet bringing the annual absorption to over 14 million square feet. This annual total is the 4th highest in the history of DFW Big-Box absorption.
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.
Executive Vice President
Client Services Specialist
The Gladiator Group is supported by Colliers International Research Team
“Occupier activity across the Unites States continues to be robust, particularly in bulk industrial space 100,000 square feet and larger…”
“The average size of a bulk transaction was 266,000 square feet—much higher than the 242,000 square feet average the previous year. The increase in size range was a direct result of third-party logistics and packaging companies (3PLs) and automotive-related companies taking larger chunks of space compared with the same time last year.”
– Occupier Activity Remains Robust in 2018 Thanks for 3PL Activity, James Breeze, 17 Jan 2019
CONTACT WARD RICHMOND AT: