The industrial market in Dallas-Fort Worth is on the cusp of something huge.
As our team starts to wind down the first quarter and look at trends leading into the second, we’re seeing a tremendous amount of activity on the development side, the new project-side, and from the tenants in the market. As I was enjoying spring break with my family, my mind couldn’t help but wonder, “What’s going to happen next?”
But it dawned on me—this sense of familiarity—this feeling of something eerily similar.
It’s starting to feel like last year.
In 2016, DFW’s industrial market had 11 deals which accommodated nearly seven million square feet in absorption. As an industry, we are all rooting for the same occurrence to benefit the overall health of the market and to keep it going in the right direction. This year, I think we’ll see 10 or more deals that will account for seven to eight million square feet of industrial deals again.
Our forecast for last year was a bit lower than what it turned out to be. At the end of the year, we were very pleasantly surprised by it.
Ultimately this year, I think we’re going to see a similar or even greater year than 2016.
Even so, you’re always looking over your shoulder. Many of the same challenges remain. From an operational standpoint, we’re managing expectations from tenants and educating them on what’s happening in DFW. The market has changed drastically as far as rates from previous cycles. The same can be said of the availability of quality options for tenants. On the development side, the amount of quality land sites are shrinking daily.
Another challenge comes from the development side. We are working diligently with our development partners to make strategic decisions on what to build, where to build, and when to build.
There are, however, opportunities within the challenges; a way to capitalize on lessons learned from our previous campaigns for everyone involved. In order to increase our shared success, we have to continue to be creative and peel back the opportunities and take advantage of advancements in technology.
Empathy goes a long way. We need to show clients daily that there’s more than a real estate deal in each transaction. When they make a decision, we dive into the insights that impact their businesses every day and highlight cost savings beyond the rental rates. We have to put ourselves in their shoes and, in a way, become a shareholder in their company. There are numerous ways we can offer cost savings.
If we do these things together, there’s no doubt that we will increase our collective success and build on our record-breaking 2016.
Craig Jones is a managing director at JLL.