News

You Can Still Break Into DFW Industrial. It's Just Going To Cost You

Dallas-Fort Worth Industrial

November 13, 2025 | 8:52 p.m. ET Billy Wadsack, Dallas-Fort Worth

Stream Realty Partners Executive Managing Director Seth Koschak has simple advice for those looking to get their foot in the door in Dallas-Fort Worth, one of the most competitive industrial markets in the country.

"Go overpay for your first deal," Koschak said.

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Leon Industrial’s Sean Wood, Harbor Capital’s Levi Benkert, CapRock Partners’ Taylor Starnes, S2 Capital’s Chris Roach, Stream Realty Partners' Seth Koschak and Legal 1031 Exchange Services’ Cindy Pham.

It’s the same advice he gives everyone looking to be taken seriously, especially when they are seeking a quality location for a value-add Class-B or infill property.

Track record is especially critical these days in DFW, whether for acquisitions or getting financing.

But outpaying the competition can help a company break in and give it the opportunity to be the one on the next bid sheet that has closed on a transaction.

"In the long run, that initial acquisition is not going to matter," Koschak said Tuesday at Bisnow’s 2025 DFW Industrial Summit at The Westin Galleria in Dallas.

Solid demand drove DFW's vacancy rate down to 9% during the third quarter, according to CBRE’s latest industrial market report. Net absorption dropped to 3.2M SF during the quarter, but it was the 60th straight quarter the DFW market experienced positive absorption.

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CenterPoint Properties’ Jeff Thornton, Ironwood Realty Partners’ Bob Rice, Dermody’s Danielle Rice, Newmark’s Jack Fraker, Hillwood’s Matt Hyman and Stream Realty Partners’ Matt Dornak.

The market's construction pipeline reached 21.3M SF, including 4.6M SF in new starts during the quarter. The 2.6M SF delivered in Q3 was eclipsed by new starts for the first time since the end of 2022.

That was driven in part by debt returning to the market, CapRock Partners Vice President of Acquisitions Taylor Starnes said. CapRock received multiple competitive term sheets from aggressive regional banks as it looked for a construction loan this year.

Equity can still be challenging. Starnes said discretionary funds really help pull the full capital stack together on new developments.

The key to getting deals capitalized often comes down to discretionary equity, Koschak said.

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St. John Properties’ Raphael Alterman, SVN Dunn Commercial’s Courtney Stanford, Arco/Murray’s Austin Brasher, Majestic Realty Co.’s Al Sorrels, Rockefeller Group’s Cavanaugh Adams, ABHR’s Steve Robinson and Terrell EDC’s Carlton Tidwell.

Working with regular partners can also make deals easier to finance, as they will save development equity for firms they are familiar with, he said. One-off deals and firms without a track record aren’t getting a lot of love.

"We're having a lot of hard conversations with people daily that are asking to go raise equity, and we are telling them it's not really feasible," Koschak said.

Much of the capital coming into the market is from the coasts, Harbor Capital CEO Levi Benkert said. The Morgan Stanleys and JPMorgans can come in from California or New York and write big equity checks.

Since that isn't as easy to do locally, Harbor Capital has had a lot of success this year with single-tenant industrial spaces under 100K SF, a segment that isn’t as overbuilt.

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Gordon Highlander's Nick Campbell, Foundry Commercial's Jim Traynor, SRS Industrial's Shannon Johnston, HFA Architecture + Engineering's Marc Jennings, Resource Commercial Construction's Chris Shakesby, O'Brien Architects' Lorelei Mewhirter and Grand Prairie Economic Development's Tony Ramirez.

"That's because the big money is not as prevalent there," Benkert said.

In addition to the coasts, Koschak said the market has seen an influx of capital from high net worth Mexican nationals in recent months.

The volatility of interest rates has led to fatigue in the market, as it almost feels like an annual conversation, S2 Capital President of Industrial Chris Roach said.

But investors are wrapping their heads around it and starting to move again.

"Everyone's more comfortable with just the instability around that," Roach said. "We're certainly, and I think the market is, more comfortable with floating-rate debt again."

After decisions were delayed late last year due to the presidential election and near the start of the year because of unpredictability around the Trump administration’s tariffs, decisions have to be made at some point.

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Pinnacle Structural Engineers' Don Greive, Provident Realty Advisors' Chris Martin, LGE Design Build's Ray Catlin, Merriman Anderson Architects' Will Cotton, Nucor Vulcraft Verco's Jay Smith, Mohr Partners’ Eric Beichler and Holley Development Co.'s Stephen Holley.

"That uncertainty I would hope ends soon, but I don't know what it's going to have to be to get us there," Benkert said. "Basically, everybody who had planned on renting a building at some point in 2025 for the most part is just delaying those lease signings."

Starnes said he expects DFW and Houston to be "super competitive" in the capital markets landscape, and CapRock will be active on both the development and acquisition sides.

Roach said the region’s healthy fundamentals and pent-up leasing demand for all sizes make him optimistic for its future.

While tenant demand has been down during 2025, total absorption numbers — 16.7M SF over the last 12 months, according to CBRE — have been strong, Koschak said.