By Ward Richmond
Once again, DFW Industrial blasted into the year with a powerful army of tenants taking down millions square feet of modern bulk distribution space! The staggering numbers displayed by the DFW market solidifies our spot at Number 1 in the USA in 2019 in Absorption, Product Delivered and Product Under Construction.
I don’t mean to sound like a non-humble bragger, but I just report facts and the fact of the matter is that our market is explosive and we have established ourselves here in DFW as a premier global distribution hub.
DFW finished Q1 2019 with 6.5 Mil SF in Total Industrial Absorption. This level of absorption accounts for about 1/3 of total absorption we saw in 2018. We kicked the final year of the decade off by delivering almost 8 Mil SF of new product with another 25 Million SF currently under construction as we our vacancy rate hovers at a healthy Mid 6.
Our Colliers Dallas office alone represented three different companies for 1 Million SF space requirements in Q1 2019 and 2 of the 3 deals have successfully closed. Multiple other massive unannounced projects are secretly circling the market and inking deals as I write this sentence.
USA Wide, absorption numbers are actually down with 39.2 Mil SF absorbed in Q1 2019 which is the lowest quarter on record since 2012. That has not stopped USA industrial rental rates from pushing to record highs with an average of $5.89 psf. US vacancy rate is riding low at 5% while the song “Lowrider” plays on construction sites everywhere as workers build 294 Mil SF of space which is an all-time record.
We look forward to seeing what happens this summer as eComm continues to replace traditional retail, WalMart continues to chase down Amazon, the trade negotiations with China drag on and the labor market continues to tighten.
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AVG Qoated Rate:$3.75 SF
200,000-499,999 SF: 382/64
500,000-749,999 Sf: 96/14
750,000+ SF: 64
New construction and deliveries did not affect the overall vacancy rate as it held steady to last quarters rate of 11.3%. Expect that number to rise over the year as much of the speculativeunder construction inventory is set to deliver later this year.
Since 2010 the DFW has been the Big-Box inventory increase by over 200 buildings totaling 100M SF. For Context, in 2010 there was Big-Box building that was under construction during the entire year while in Q1 2019 alone, there were 40 building with a DLF quarterly record combined square footage of close to 25M SF.
Rental rates, although still strong at $3.75 NNN, did slide down $0.08 from last year’s record high of $3.83.
Absorption had a strong start to the year with over 3.4 million absorbed on Q1 2019.
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
ON THE ROAD AGAIN
May 8-10, 2019: CLDA – Phoenix, AZ
May 20-22, 2019: ICSC, Las Vegas, NV
June 10-12, 2019:EFT, Altanta, GA
Sept 14-18, 2019: IAMC, Milwaukee, WI
Sept 25-27, 2019: Colliers International Conference, San Diego, CA
Oct 15-17, 2019: Armstrong 3PL Conference, Chicago, IL
Nov 8-11, 2019:Summit LA19, Los Angeles, CA
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
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