Image

Welcome to 2021. Blackjack!

June 10, 2021
Market Reports
167 Views

 

Welcome to 2021. Blackjack!

By Ward Richmond

Industrial real estate developers in Dallas, TX absolutely killed it in Q1 2021. Is it time to cash in their chips? Not likely.

DFW was one of the most active markets in the world in Q1 2021 with over 25 Mil SF of new space under construction for the 15th consecutive quarter. Wow! Our overall market size has now passed 920 Million Square Feet as we quickly approach the 1 Billon SF mark which will undoubtedly occur by the end of the decade.

This tremendous amount of activity is due to the ongoing demand by occupiers of Supply Chain Real Estate to relocate or expand their presence in DFW due to the amazing logistics infrastructure, low cost of living, central location, fast growing population and business friendly government.

I am happy to confirm as I write this blog that our great state of Texas is 100% open for business. My kids no longer have to wear masks to school. I am fully vaxxed and ready to hit the conference circuit in the fall. Kudos to our government for setting an example of “how to properly handle a global pandemic” at the State level.

Q1 2021 saw record setting absorption numbers busting through the 10 Mil SF threshold! The majority of this absorption came in the big box market (200K SF + facilities) to accommodate eCommerce, logistics and manufacturing tenants. Job levels are back to pre-pandemic levels and we expect robust levels of activity for many quarters to come.

The only bad news is that if you are in the market to buy, lease or build, the prices are not trending in your favor. I expect rents, land cost and construction costs will continue to push upward and onward for the foreseeable future and highly recommend getting in to the market sooner rather than later. Forget crypto currency. Buy industrial real estate.

A building that cost $45 psf to build 12 months ago may cost you $55 or even $60 psf today. Lumber and steel costs are at all-time highs while availability is at all-time low creating 8X the amount of time to deliver. Industrial land is disappearing as every obvious site within close proximity to DFW is already under developer control.

Tenants need to act fast if they want to secure existing space because the competition is ferocious. While automation may take over cars and trucks and material handling, you are still going to need a badass commercial real estate broker for many years to come if you plan to lock down industrial real estate in DFW.

You know where to find me.

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

Q1 2021 Top Richmond Projects

  • Keller Logistics – Napoleon, OH – 600,000 SF Sale
  • Gulf Relay – Soutrh Dallas, TX 350.150 SF Lease
  • Keller Logistics – Houston, TX 223.061 SF Lease
  • Schenker, Inc – Chandler, AZ 135,217 SF Lease
  • Fusion Transport – Grand Prairie, 105,000 SF Lease

Q1 2021 Top DFW Deals

  • Walmart – Alliance – 1,002,536 SF Lease, BTS from Hillwood
  • Petco – Eastern Lonestar/Turnpike 608,939 SF Lease from Clarion Partners
  • Bissell – South Dallas – 524,800 SF Lease from Barrings
  • Plastipak – Garland – 471,000 SF Lease from Duke Realty
  • FB Flurry – Garland – 427,000 SF Lease from Clarion Partners

Key Takeaways

img

The Big-Box sector continues to lead all product type in the metroplex accounting for nearby all the absorption.

img

DFW’s quarterly absorption was the highest ever recoreded at over 10.6 million square feet.

img

15th quarter in a row for construction levels to surpass 25 million square feet.

img

Rental rates shot up to $6.91 per square foot NNN.

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

COLE HOOPER

Senior Associate

ZACK RUTLAND

Senior Associate

JAMES EWING

Associate

KRISTINA RODRIGUEZ

Client Services Specialist

The Gladiator Group is supported by Colliers International Research Team