Dallas Industrial Development Accelerates

Dallas remained one of the country’s most active industrial development markets through July, with more than 33 million square feet underway and one of the largest volumes of new starts nationally. The construction pipeline was more than four times larger than during the same period last year, while deliveries also moved ahead of their year-ago level.

Investment activity reached nearly $4 billion, placing Dallas at the top of the markets tracked for sales volume. Vacancy, meanwhile, stood just above the national average as rents continued to post strong annual growth, according to Yardi Matrix data.

Development pipeline expands sharply

Dallas had nearly 33.7 million square feet of industrial space under construction across 93 facilities as of the end of July. The pipeline represented 3.2 percent of total stock, above the 2 percent national average.

Phoenix remained ahead of Dallas relative to inventory, with 6.8 percent of stock under construction. New Jersey stood at 1.7 percent, while Chicago industrial space underway and Kansas City’s posted 1.3 percent and 1.1 percent, respectively.

The metro’s development pipeline was more than four times larger than during the same period last year, when 16 properties totaling 7.7 million square feet were underway. Developers also broke ground on 47 properties year-to-date through July. According to Yardi Matrix data, Dallas recorded 15.9 million square feet of industrial starts through July, second only to Phoenix’s 18.1 million square feet.

Hillwood is developing two of the largest projects in the metro. Alliance Westport 12 will comprise 1.2 million square feet, while Alliance Westport 15 is set to total 798,494 square feet. Both projects are within the developer’s 27,000-acre AllianceTexas master-planned development in North Fort Worth, Texas.

Deliveries move ahead of last year

Year-to-date through July, Dallas delivered 15.5 million square feet of industrial space across 64 projects. Completions represented 1.5 percent of total stock, above the 0.7 percent national average.

Dallas led its peer group in delivery volume, followed by Phoenix with 7 million square feet and Chicago with 6.8 million square feet. The Inland Empire delivered 2 million square feet, while Kansas City completed 1.6 million square feet during the period.

The metro also surpassed its industrial deliveries volume from the same period last year, when 55 facilities totaling 12.3 million square feet came online.

Sales volume leads major markets

Dallas industrial sales volume reached $3.93 billion year-to-date through July, according to Yardi Matrix data. The metro ranked first among the markets tracked in the report for total transaction volume. Some 208 properties encompassing nearly 31 million square feet changed hands.

Industrial properties traded at an average of $156 per square foot. New Jersey posted a higher average of $184 per square foot, while Phoenix reached $158 per square foot and the Inland Empire matched Dallas at $156 per square foot. Chicago and Kansas City recorded lower averages of $97 and $96 per square foot, respectively.

Sales volume was substantially higher than during the same period last year, when transactions totaled $1.1 billion across 205 properties encompassing 33.2 million square feet.

In one recent deal, Ares Management sold Tradepoint 45 East in Wilmer, Texas, to Cavender’s. The buyer acquired the 610,622-square-foot warehouse with financing from a $42.3 million Truist Bank loan. Champion Partners and Rosewood Property Co. developed the distribution center in 2022.

Nuveen Real Estate also sold a 403,200-square-foot warehouse in Dallas to BakerTriangle. Frost Bank provided a $27.3 million acquisition loan. The property came online in 2001 on a 29-acre site at 4130 Port Blvd. in southern Dallas.

Vacancy sits slightly above the national average

Dallas’ industrial vacancy rate stood at 9.4 percent as of the end of July, slightly above the 9.3 percent national average. Chicago posted a higher rate of 11 percent, while Kansas City registered a considerably lower 6.7 percent.

Average in-place rents in Dallas reached $7.09 per square foot, up 7.3 percent over the previous 12 months. Leases signed during the previous 12 months averaged $9.38 per square foot.

Havener Cos. signed American Infrastructure and Metal Works to a 93,198-square-foot, long-term lease at 2817 Braswell Drive, a historic industrial property in Fort Worth, Texas. Transwestern represented the landlord in the transaction.