Dallas Industrial Investment Sees Surge

Dallas-Fort Worth has become a key hub for the industrial sector, growing its inventory by an impressive 17.9 million square feet of 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 this year, despite the industry slowdown, reaching a total transaction volume of more than $1.6 billion year-to-date through May.

Sales activity in the Metroplex was also fueled by the cold storage sector, establishing it as a hub for refrigerated warehouses. Since the start of 2022, a total of 3.7 million square feet of cold storage space have been delivered, a milestone no other market has come even close to, according to CommercialEdge data. The metro’s cold storage market is expected to continue its expansion in the coming years, mainly due to its central location in the country.

Dallas industrial sales volume, high

Industrial sales totaled north of $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 sale price was higher than the $142 national average but 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 involved 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 acquired 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—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. The index was 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. The property 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 came online accounting for 2.6 percent of total stock. Both figures were significantly higher than the national average of 0.9 percent.

In May, 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 obtained forward financing for the property. The new loan refinanced the development’s existing debt, a $57.4 million construction note 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. The developer broke ground on the project in 2023 within Trinity Park West, 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.