The North Texas industrial commercial real estate market is on fire. Need proof? Just look at research reports recently released by Cushman & Wakefield of Texas and Jones Lang LaSalle. Although the firms show slightly varying stats, due to the type and number of buildings measured, both brokerages show that local industrial market fundamentals have improved to levels not seen since 2006. JLL reports an overall vacancy of 5.9 percent—the lowest it has ever recorded.
Here are some highlights from the two reports. Scroll down to see statistical charts.
Cushman & Wakefield of Texas Inc.
• As of November 2013, DFW gained 83,700 payroll jobs over the past 12 months, placing North Texas at the fourth position nationwide. With ongoing job growth, expect trend to remain stable or improve during 2014.
• Overall absorption levels were up 57 percent last year and the best they’ve been since 2006. Overall absorption was 15.5 million square feet for the year, compared to 15.7 million square feet in 2006.
• The average overall absorption total from 2006 through 2013 was 7.6 million square feet—half of the 2013 total.
• Submarkets that showed greater than 1 million square feet of absorption last year were Irving/Coppell, Pinnacle/Turnpike, GSW/Centreport, I-20/Inland Port, and Alliance.
• At 28.3 million square feet, industrial leasing activity (new leases, expansions, subleases) during 2013 rose 11.2 percent when compared to the same period in 2012. Leasing activity was the highest since 2006, when it hit 32.8 million square feet.
• The market saw 65 transactions that were at least 100,000 square feet in size.
• Construction completions totaled 8.47 million square feet, with 10 build-to-suit projects accounting for 64.5 percent of the total. It’s the highest it has been since 2008, when it was 20.5 million square feet.
• Currently, 10.5 million square feet is under construction, with 13 speculative projects totaling 8.4 million square feet. Of the total space under construction, 31 percent is pre-leased. All told, projects under construction represent an 81 percent year-over-year increase.
Jones Lang LaSalle
• The North Texas industrial market saw 9.1 million square feet of positive net absorption in the fourth quarter of 2013, bringing the year-end total to a near-record-setting 17.2 million square feet.
• Much of the net absorption came from several large build-to-suit projects.
• Market fundamentals continue to improve. Vacancy is at 5.9 percent—the lowest ever recorded. The situation is expected to continue, until a significant amount of spec product is brought to the market in 2014 and 2015.
• The construction pipeline is back to the historic norm of about 10 million square feet of industrial space.