Thank you for sharing!

Your article was successfully shared with the contacts you provided.

DALLAS-Just-released industrial numbers show Dallas/Fort Worth is staying a steady but safe course with 857,248 sf absorbed in the third quarter despite double digit vacancy and a slight decrease in rents. Not only will the year end on a positive note, but Q4 is sure to bring a surge in activity, says a senior director for Cushman & Wakefield of Texas Inc.

C&W’s Jean Russo believes activity, which picked up after Labor Day, will rise again after election day. “Just the fact that we’re having the election and we’ll have that certainty, it will influence some users to make a decision,” she tells GlobeSt.com. “I think the fourth quarter is going to be gangbusters.”

In the interim, Q3 leasing activity was strong, but the market remained flat. The C&W research team concluded deal-making predominately was done for small to midsize tenants, who moved and sometimes expanded within the same submarkets, creating holes with their exits to higher-grade product and lower effective rents. Nonetheless, year-to-date leasing activity of 16.9 million sf rang up 3.2 million sf more than last year at this time. The quarterly comparison stacks 857,248 sf of gain up against nearly 2.8 million sf of losses in 2003.

Regardless, the quarter was “disappointing,” Russo says. “All this activity didn’t translate to a big absorption.”

Russo says office/showroom/warehouse space is dragging down the numbers for bulk distribution, a sector where she’s had back-to-back weeks of 100,000-sf plus in dual deals for Carrollton properties. Only three of 12 submarkets raked in positive absorption: Garland/Mesquite, North Dallas and Irving/Coppell. The C&W report does not include the region’s heavyweight, AllianceTexas.

Russo says the third quarter was fairly routine. Occupancy came in at 14.8% versus 14.1% a year ago and 14.7% just three months ago. Third-quarter rents ranged from $3.50 per sf to $8.20 per sf; last year, it was $3.60 per sf to $8.48 per sf. And three months ago, rent was $3.50 per sf to $8.29 per sf.

Whether it’s restraint or building material costs, developers aren’t overbuilding, according to Russo. “I would venture to say there’s not an existing submarket that’s overbuilt with spec space,” she says, adding the concern is there won’t be enough space to meet a significant spike in demand. “Their inventories are getting full.”

Third-quarter completions added 669,020 sf to the 362.4-million-sf inventory. By midyear, deliveries hit 4.5 million sf and Russo predicts it will rise to 6.3 million sf by year’s end, of which only 25% are build-to-suits.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 3 free articles* across the ALM subscription network every 30 days
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?


Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.