Industrial Insight and Statistics: Dallas-Fort Worth (2019-Q2)

1. © 2019 Jones Lang LaSalle IP, Inc. All rights reserved. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof.
Q2 2019
Industrial Insight
The Dallas-Fort Worth (DFW) industrial market remains strong halfway into
2019, propelled by population and employment growth in the region. Vacancy
remains at historic lows while demand continues to keep up with
unprecedented supply. DFW remained the most active market for
construction in the nation for a second consecutive quarter with rent
increases beginning to plateau as tenants adjust to rates in the market.
The DFW market remains the highest in the nation in construction activity.
Speculative projects account for over 70-percent of the activity across the
market. Over 60-percent of current projects under construction in the South
Dallas submarket are build-to-suit, helping to keep in check the submarket’s
16.4-percent vacancy rate.
Even with vacancy near historic lows, available space remains at near
“frictional” levels, accounting for the normal tenant movement within the
market. Rents increases have begun to plateau as tenants renewing are
accounting for higher rates that have grown two to four percent annually on
average.
Outlook
Demand is expected to remain strong through the second half of the year,
with net absorption topping 20 million square feet for the fifth consecutive
year. Several leases signed in the first half of the year, along with construction
already accounted for in the South Dallas submarket will bring vacancy rates
lower market-wide.
Fundamentals Forecast
YTD net absorption 9,964,490 s.f. ▲
QTD net absorption 5,245,662 s.f. ▲
Under construction 26,189,953 s.f. ▶
Total vacancy 7.0 % ▶
Average asking rent (NNN) $4.36 p.s.f. ▲
Tenant improvements Stable ▶
0
10,000,000
20,000,000
30,000,000
2015 2016 2017 2018 YTD
2019
Supply and demand (s.f.) Net absorption
Deliveries
DFW leads the nation in new construction
activity for second consecutive quarter
6.4%
6.1%
7.0%
6.6%
7.0%
2015 2016 2017 2018 Q2 2019
Total vacancy
For more information, contact: Nick Thomas | nick.thomas@am.jll.com
• Vacancy remains at historic lows for the cycle, with over half of the DFW
submarkets below six percent
• Rent increases are plateauing as tenants accommodate higher rates
• For the second consecutive quarter, DFW is the top market in the nation
for new construction activity by square feet
$2.00
$3.00
$4.00
$5.00
2015 2016 2017 2018 Q2 2019
Average asking rents ($/s.f.)
W&D Manufacturing
Dallas / Fort Worth

2. Dallas / Fort Worth
Q2 2019
Industrial Statistics
Inventory
(s.f.)
Quarterly
total net
absorption
(s.f.)
YTD
total net
absorption
(s.f.)
YTD
total net
absorption
(% of stock)
Total
vacancy
(%)
Total
availability
(%)
Average
total asking
rent
($ p.s.f.)
Quarterly
completions
(s.f.)
YTD
completions
(s.f.)
Under
construction
(s.f.)
Market Totals
Warehouse & Distribution 537,344,795 3,971,175 9,033,696 1.7% 7.7% 11.7% $4.34 4,876,479 12,176,014 25,825,203
Manufacturing 84,321,336 1,274,487 1,278,201 1.5% 2.3% 3.8% $4.73 1,000,000 1,000,000 364,750
Totals 621,666,131 5,245,662 9,964,490 1.6% 7.0% 10.7% $4.36 5,876,479 13,176,014 26,189,953
Submarkets
DFW Airport
Warehouse & Distribution 65,304,245 1,524,264 2,014,543 3.1% 8.6% 13.5% $4.46 2,062,640 2,695,996 2,019,018
Manufacturing 2,177,108 0 0 0.0% 2.2% 16.3% $4.89 0 0 0
Totals 67,481,353 1,524,264 2,014,543 3.0% 8.4% 13.6% $4.48 2,062,640 2,695,996 2,019,018
East Dallas
Warehouse & Distribution 22,230,419 114,607 994,906 4.5% 6.5% 11.6% $3.89 162,800 1,040,030 1,206,911
Manufacturing 3,679,450 44,067 44,067 1.2% 0.0% 0.0% $0.00 0 0 0
Totals 25,909,869 158,674 1,038,973 4.0% 5.6% 10.0% $3.89 162,800 1,040,030 1,206,911
Great Southwest/Arlington
Warehouse & Distribution 86,317,179 -267,136 1,381,207 1.6% 5.7% 9.4% $4.78 128,024 2,064,935 2,714,880
Manufacturing 11,157,787 1,022,200 1,022,200 9.2% 0.9% 2.7% $4.04 1,000,000 1,000,000 0
Totals 97,474,966 755,064 2,403,407 2.5% 5.1% 8.7% $4.75 1,128,024 3,064,935 2,714,880
North Fort Worth
Warehouse & Distribution 69,520,007 287,960 1,284,907 1.8% 8.9% 16.6% $4.16 0 2,579,526 8,077,344
Manufacturing 12,843,682 0 0 0.0% 1.2% 1.6% $5.44 0 0 0
Totals 82,363,689 287,960 1,246,819 1.5% 7.7% 14.4% $4.20 0 2,579,526 8,077,344
Northeast Dallas
Warehouse & Distribution 51,789,514 855,486 1,020,791 2.0% 7.3% 10.1% $5.08 1,084,640 1,748,231 565,342
Manufacturing 16,506,160 10,613 10,613 0.1% 4.4% 5.3% $4.98 0 0 0
Totals 68,295,674 866,099 981,404 1.4% 6.6% 9.0% $5.06 1,084,640 1,748,231 565,342
Northwest Dallas
Warehouse & Distribution 73,357,087 500,275 1,161,002 1.6% 4.1% 8.5% $5.12 734,200 885,376 2,348,961
Manufacturing 8,292,395 225,691 215,705 2.6% 2.1% 2.9% $5.48 0 0 0
Totals 81,649,482 725,966 1,376,707 1.7% 3.9% 8.0% $5.12 734,200 885,376 2,348,961
South Dallas
Warehouse & Distribution 63,792,583 148,850 453,161 0.7% 17.7% 17.5% $3.61 404,175 404,175 4,432,596
Manufacturing 6,856,748 21,979 21,979 0.3% 3.7% 4.5% $3.90 0 0 322,000
Totals 70,649,331 170,829 475,140 0.7% 16.4% 16.3% $3.62 404,175 404,175 4,754,596
South Fort Worth
Warehouse & Distribution 39,690,405 85,173 122,427 0.3% 6.1% 7.4% $4.86 300,000 757,745 0
Manufacturing 12,647,083 -40,500 -40,500 -0.3% 1.3% 4.0% $4.23 0 0 42,750
Totals 52,337,488 44,673 81,927 0.2% 5.0% 6.6% $4.75 300,000 757,745 42,750
South Stemmons
Warehouse & Distribution 65,343,356 721,696 600,752 0.9% 4.4% 8.7% $4.61 0 0 4,460,151
Manufacturing 10,160,923 -9,563 4,137 0.0% 2.9% 3.6% $5.75 0 0 0
Totals 75,504,279 712,133 345,570 0.5% 4.2% 8.1% $4.61 0 0 4,460,151
Nick Thomas | Senior Analyst, Research
201 Main Street, Suite 500, Fort Worth, TX 76102 | tel +1 817 334 8128 | nick.thomas@am.jll.com
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