Rock Solid

February 2, 2023
Market Reports


Rock Solid

By Ward Richmond

The DFW Industrial Real Estate Market closed out 2022 strong with no signs of slowing down. The year was rock solid here in the greatest distribution hub in the world (IMHO).

In terms of absorption, we saw our second greatest year to date (2021 is still #1 thanks to “The Covid Effect” as I like to call it). 2022 closed out with a staggering 33 Million SF being absorbed while delivering just under 40 Mil SF of new product. This tells a story of Mensa level development fundamentals here in the hometown of Trammell Crow, though I’m not sure if this close gap between demand and supply was intentional because at the beginning of 2022, we found ourselves staring down a 70 Mil SF development pipeline which basically delivered at slightly over 50%.

With that being said, take the following data with a grain of salt. We currently have another record setting “development pipeline” with 83 Mil SF “under construction”. Word on the street is that only 50 Mil SF of this is actually under construction but it’s all semantics at the end of the day. Still, it is my belief that this 83 Mil SF number is about as realistic as my bench press when I was a senior in high school trying to get a football scholarship.

Yes- 83 Mil SF of dirt is moving (according to Costar), but in my opinion, there is no way in hell that we are going to see anywhere close to 80 Mil SF get delivered by Christmas 2023. Not happening. Mark my word. This is due to a lot of factors including the turbulent debt market, lack of construction materials, and labor shortages which are all contributing to the construction life cycle moving faster than molasses. In many cases, it takes longer to get a transformer than it does to build a freaking building.

Tenant demand from my perspective remains strong and steady and I expect we continue hitting close to or above that nice 10 Mil SF mark on a quarterly basis for the next few quarters to come – at least. There is no doubt, the leasing market is not quite as explosive as it was in 2021 or early 2022 but from everything I see, it remains strong with DFW flaunting a low (for DFW) vacancy rate of 5.3% (4.7% for Non Big Box and 6.6% for Big Box).

My optimistic thoughts on the leasing market are reinforced by record high rental rates at an average $6.54 NNN across all industrial product and $5.32 NNN average in the Big Box Market. This is the first time that Big Box Market has seen average rates exceed $5.00!

According to reliable sources, cap rates continue to creep up and the investment sales market, in general, has cooled off significantly when compared to 12 months ago. This is thanks to the aforementioned debt market and uncertainty around interest rates, etc. but I’m told by a number of psychic medium investment sale brokers that this will all change, and activity will ramp back up during the back half of 23 or early 24 at latest.

I’m thankful to work in this industry with so many wonderful people as we all do our part to make the supply chain as rock solid as the industrial real estate market. Please contact me anytime to discuss strategy, market trends or how to lease a 1 Million SF distribution center at the lowest price possible. Welcome to 2023!

Congratulations, James!

To get further inside my supply chain brain,
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Q4 2022 Top Richmond Projects

  • CEVA – Dallas-Fort Worth – TX – 396k SF – Lease
  • DB Schenker – DB Schenker- CA- 133k SF – Lease
  • Confidential – Dallas-Fort Worth – TX – 106k SF – Lease
  • Johns Manville – Norwalk – OH – 80k SF Lease
  • Keller Logistics – Temple – TX – 44.2 AC – Sale

Q4 2022 Top DFW Deals

  • Careismatic Brands – South Dallas – 1.03M SF Lease
  • Ryder – South Dallas – 826k SF Lease
  • Samsung – South Fort Worth – 670k SF Lease
  • Masonite International – East Dallas – 626k SF Lease
  • Kenco Logistic Services – South Dallas – 489k SF Lease

Key Takeaways


Annual absorption was the 2nd highest total ever at over 33 million square feet while 39.2 million spare feet delivered, an all time high.


For the 8th quarter in a row construction levels have risen and as of Q4 are over 83 million square feet. For perspective, since 2000, DFW had 16.7 million square feet under construction on average per quarter


The vacancy rate is 5.3%, still hovering near historically low levels. The big-box vacancy rate is 6.6% while non big-box is 4.7%, both are near their all-time lows


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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Feb 7-8, 2023: Stifel, Amelia Island, FL

Mar 19-21, 2023: IWLA, Palm Springs, CA

Mar 26-29, 2023: Shoptalk, Las Vegas, NV

May 10-12, 2023: Colliers Logistics & Transportation, Las Vegas, NV

Sep 28-29, 2023: Colliers National Industrial Conference, Scottsdale, AZ

The Supply Chain Syndicate is supported by Colliers International Research Team