Lack of Locales for Smaller Tenants

DALLAS-Pick up a real estate or business publication in the DFW arena and you might find news about massive build-to-suit and speculative industrial projects going north in submarkets including South Dallas, Coppell to the west and Lewisville, to the northwest. What’s conspicuously missing in these headlines and stories, however, is that little, if any, is being built for the smaller users, with “small” being defined as 200,000 square feet or less.

In other words, while these 500,000-square-foot projects and above are being announced and developed, experts tell GlobeSt.com there is little in the way of smaller space either on the drawing boards or under construction. The result of that lack is predictable. “A trend I think we’re seeing now and will continue to see in the near term is upward pressure on rental rates for users in the smaller spaces,” remarks Tim Vogds, vice president at CBRE.  He goes on to say that the average ask for space in the DFW area has ranged around $3 per square foot. “But for smaller spaces, we’re starting to see quoted rental rates in the high $3 to low $4 per square foot range, all due to supply and demand.”