Dallas Industrial Investment Activity Sees Surge
The Dallas-Fort Worth metroplex has become a key hub for the industrial sector, growing its inventory by an impressive 17.9 million square feet of new space delivered in the first five months of 2024. Presenting a strong pipeline of projects and multiple significant transactions, the metro continues to thrive, according to CommercialEdge data.
Dallas has been one of the most active markets for industrial sales activity this year, despite the industry slowdown, reaching a total transaction volume of more than $1.5 billion year-to-date through May.
Sales activity in the metro was also fueled by the cold storage sector, establishing Dallas-Fort Worth as a hub for refrigerated warehouses. Since the start of 2022, a total of 3.7 million square feet of cold storage space has been delivered, a milestone no other market has come even close to, according to CommercialEdge data. Dallas’ cold storage market is expected to continue its expansion in the coming years, its central location in the country largely contributing to its prominence.
Dallas industrial sales volume high
Industrial sales totaled $1.6 billion year-to-date through May in the Metroplex, with properties trading at an average of $152 per square foot, according to CommercialEdge data. The average price per square foot was higher than the $142 national average and was outpaced by markets, such as the Inland Empire ($216 per square foot) and New Jersey ($272 per square foot).
One of the major recent transactions was the sale of an eight-building, 846,261-square-foot infill industrial portfolio in Plano. DRA Advisors purchased the ensemble, while New York Life provided $79 million in acquisition financing.
Urban Logistics Realty has also recently sold Urban District 35, a 440,663-square-foot industrial park in Denton. High Street Logistics Properties purchased the four-building asset for $21.5 million, backed by a loan from The Hartford Financial Services Group.
New industrial inventory to come online
At the end of May, Dallas had 16.3 million square feet of industrial space under construction across 81 properties. The pipeline accounted for 1.7 percent of existing stock—just below the national average of 1.9 percent.
In the first five months of 2024, approximately 4.3 million square feet of industrial space broke ground in Dallas across 23 properties, representing 0.5 percent of the total stock, higher than the national average of 0.3 percent.
Capstar Real Estate Advisors recently broke ground on a 756,668-square-foot industrial project in Mesquite. The developer already fully preleased the warehouse—which is scheduled for completion in early 2025— to Canadian Solar.
Crow Holdings Development also started construction on Core30 Logistics Center, a 511,000-square-foot, two-building industrial campus in Dallas which is set to include a 300,347-square-foot, cross-dock facility and a 210,653-square-foot front-load building.
Year-to-date through May, the Dallas industrial market recorded 17.9 million square feet of industrial space delivered across 54 properties, representing 1.8 percent of the total stock. The metro was on par with the Inland Empire, where 17.4 million square feet were delivered accounting for 2.6 percent of total stock, significantly higher than the national average of 0.9 percent.
Just last month, Hillwood delivered Alliance Westport 25, a 1.2 million-square-foot industrial building in Fort Worth. The facility is part of the 27,000-acre master-planned community of AllianceTexas. The developer recently has landed forward financing for the property, with the new loan refinancing the development’s existing debt, a $57.4 million construction loan originated by Citizens Bank.
Lovett Industrial has completed the construction of Trinity West Business Park’s Building II, a 763,960-square-foot, cross-dock facility in Dallas. Trinity Park West is a 140-acre industrial campus that will bring approximately 2 million square feet to the area.
Lower vacancy than the national average
Dallas-Fort Worth’s vacancy rate clocked in at 5.3 percent in May, lower than the national average of 5.6 percent, CommercialEdge data shows.
Similar vacancy rates were reported in markets such as Atlanta (5.6 percent) and New Jersey (5.7 percent). Phoenix’s rate reached 4.7 percent, on par with Indianapolis (4.7 percent) and Chicago (4.9 percent), all below the national figure.
U.S. Lumber Group recently signed a full-building, 550,000-square-foot lease at Logistics Property Co.’s Southern Star Logistics Park in Midlothian. The agreement also included 25 acres of adjacent outdoor storage land, along with dual rail service.
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