Supply is flooding Dallas-Fort Worth's industrial sector — but vacancy trends remain favorable and are expected to stay that way.
In the second quarter, vacancy declined by 50 basis points year-over-year to 10.9 percent, according to a market report from JLL. The brokerage attributed this to the "continued lease up of historic-levels of speculative construction deliveries."
Interestingly, Dallas-Fort Worth was the leading industrial market in the first half of the year for construction, with developments hitting nearly 20 million square feet. But simultaneously, the market also ranked first in realized demand, according to JLL.
Moreover, the metro was the "only market to surpass 4 million s.f. of absorption this quarter," the CRE firm further noted, but added that the amount was down 6.5 percent.
While demand was high, it was a slow second quarter for leasing, which was down about eight percent from last year's quarterly average of 9.7 million square feet. The five largest industrial leases (accounting for almost 2.6 million square feet) were signed in the South Dallas and North Fort Worth submarkets.
Still, the fundamentals look solid for what's to come in Dallas-Fort Worth's industrial sector. JLL predicts that the market will see at least 20 million square feet in total annual net absorption for the seventh straight year.
"Vacancy is expected to continue to decrease through the first half of 2026 while net absorption continues to outpace new supply from a speculative development pipeline expected to maintain activity closer to the historical annual average," JLL concluded in its forecast.
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