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DALLAS-The Dallas-Fort Worth industrial market seems to have “turned the corner,” says Grubb & Ellis Co., with scrubbed numbers showing improvement in second-quarter absorption.

Granted, the absorption total market-wide is still registering in the red, but it’s 606,503 sf instead of nearly 1.4 million sf as it was at the end of the first quarter. The improved numbers were driven by positive readings in the DFW Airport submarket, Northwest Dallas, South Dallas and North Fort Worth. The second quarter closed with vacancy edging to 10.6% from 10.4% and average rent down by a nickel to end the three-month period at $4.70 per sf.

What the numbers do show bode well for the long term. The average size of the buildings under construction is growing. “We’ve seen precedence like this before in the Inland Empire, which has increased its distribution industry three-fold in the last 10 years,” Robert Kramp, Grubb & Ellis’ director of client services in Dallas, tells GlobeSt.com.

Larger buildings rising in pairs or more for “economies of scale” often will translate into a lower rent per sf, Kramp cautions. But, he emphasizes the foundation for growth in warehouse and distribution can’t be disputed with a winning “middle of the US” positioning tied to “a 360-degree transportation flow” for coast-to-coast and border-to-border shipments, minus any natural barriers that conceivably could block trade routes.

North Fort Worth led the nine submarkets with 452,301 sf of positive absorption versus a negative 603,977 sf in the first quarter. Second place went to the DFW Airport submarket, 435,476 sf in the black in comparison to the 46,448-sf backslide in Q1. Other positive strides were reflected in Northwest Dallas, 314,890 sf, and South Dallas, 10,208 sf. At the end of Q1, the northwest submarket was one of just three with a positive reading, 391,621 sf. And the second quarter’s big gainer was South Dallas, which overcame a 508,206-sf deficit for a midyear positive showing.

Kramp says the second-quarter analysis, with vacancy still above 10%, falls right in line with the 2003 forecast for the inventory of more than 639 million sf. On the horizon, there is slightly more than 4.3 million sf under construction whereas it was 4.1 million sf and then some in the first quarter.

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