Is It A Tenant’s Market, Now?

May 16, 2023
Market Reports


Is It A Tenant’s Market, Now?

By Ward Richmond

Is it a tenant’s market, now?” This is a question I keep getting asked during this ominous year of 2023.

If you’re talking about Class B suburban office tenants, the answer is Hell Yes, it is. You might call it a bloodbath. And most experts say it’s only going to get worse (or better, depending on which team you play for!).

Industrial, on the other hand, is a different story. It is still by no means “a tenant’s market” IMHO, but it’s definitely better (for tenant’s) than it was a year ago. That’s for sure.

In markets like DFW, with ±62 Mil SF under construction as we close out Q1 2023, there is most definitely a soft spot in certain submarkets, particularly in the 500k SF+ range with a staggering 20 Mil SF of new product delivered in Q1, allowing the DFW industrial market to bust through the 1 Bil SF threshold.

So- BIG Tenants – strike now- while you have the chance. It won’t last long. This is because the debt market for speculative construction is locked down right now.

So, while I think 2023 is going to be a year of a little bit of softness (compared to the last couple of years) in many US markets (Canada/ Mexico definitely NOT included) due to record product under construction, 2024 should see a shift back to record low vacancy and record high rents due to the conservative (or is it turbulent?) lending environment.

Strike now- while the iron is hot. (Or not so hot)Absorption in Q1 2023 came in at a healthy 8.6 Mil SF in Q1 versus only 3.6 Mil SF of absorption in Q1 2022. That being said, Q4 2022 closed out with a staggering 11 Mil SF so we have seen a little bit of a slowdown in that regard, and many tenants are operating in a more conservative manner due to so much uncertainty in the global economy. Nevertheless, rent rates continue to rise, jumping from $4.84 psf per annum NNN at this time last year to $7.02 psf NNN today.

Nevertheless, DFW has close to 15 speculative 1 Mil SF buildings ready for occupancy by Q3, and only a handful of tenants currently in the market for these “big bombers,” so NOW is the time to go get yourself a big bomber. It is a great time to buy, in my opinion, while institutional capital sits on the sidelines waiting for more stability in the markets, and cap rates continue to creep up.

If you are an industrial tenant, and your company needs help identifying soft spots in the North American industrial market right now, hit me up. They do exist. And we know where to find them.

To get further inside my supply chain brain,
please check out my website and blog:

Q1 2023 Top Team Projects

  • Confidential – Southeast – 1M SF – Lease
  • CEVA – Dallas-Fort Worth, TX – 396k SF – Lease
  • DB Schenker – Mexico – 270k SF – Lease
  • Ready Spaces – Dallas-Fort Worth, TX – 138k SF – Lease
  • Keller – Defiance, OH – 70K SF – Lease

Q1 2023 Top DFW Deals

  • DHL – Alliance 1.2M SF – Lease
  • Hayes Co. – Forney 904k SF – Lease
  • Blue Triton – South Dallas 603k SF – Lease
  • RJW Logistics – East Dallas 592k SF – Lease
  • Lennox – DFW Airport 499k SF – Lease

Key Takeaways


The industrial market in DFW has achieved a significant milestone by surpassing the one billion square footage mark, making it the second market after Chicago to achieve this status.


The delivery of a record 19 million square feet of mostly speculative development this quarter has impacted vacancy levels, causing the overall rate to increase by 100 basis points to 6.3%.


Rental rates in the warehouse sector continue to escalate, as Big-Box rates hit an all-time high of $5.72 NNN and Non Big-Box warehouse rates peak at a record $8.39 NNN.


Ward Richmond has over fifteen 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.


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