Pandemic Is No Match For DFW's Booming Industrial Real Estate Market

The coronavirus pandemic and civil unrest across the U.S. could not derail Dallas-Fort Worth's booming industrial sector in the first half of 2020.

Despite analysts expecting a decline in overall CRE demand and construction, the DFW industrial market absorbed 2M SF in the second quarter, bringing total year-to-date absorption to 8.2M SF. That is down slightly from 8.7M SF of absorption for the same time period last year.

The DFW vacancy rate increased 20 basis points in the second quarter to 5.9% as space availability edged up to 7.6%. Yet, demand overall remains high. Of the 23.2M SF in DFW's industrial construction pipeline, about 19.2% was already pre-leased by the end of the second quarter, according to CBRE. New projects keep getting started, such as Thursday's announcement that Crow Holdings, Clarion Partners and Rob Riner Cos. are starting a 556-acre industrial park in South Fort Worth.

CBRE tracked 71 new lease deals above the 100K SF threshold in the first half of 2020.

Lease transactions tied to approximately 5M SF of industrial space were finalized in the second quarter alone. Consistent demand for consumer goods, e-commerce and third-party logistics space inspired most of the searches for new space.

"COVID-19 is actually fueling the industrial market and creating more demand for industrial space, which will drive rents up," Hillwood Senior Vice President Tony Creme said on a Bisnow webinar in June.

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