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CRE Snapshot: Southwest Dallas Industrial Market

Dallas' inland ports

The International Inland Port of Dallas is arguably one of the nation’s best logistics hubs.

The hub encompasses 7,500 acres that include a massive Union Pacific intermodal facility and ample, affordable land flanked by three interstate highways: Interstate 35, I-20 and I-45. 

It is no wonder the IIPOD has attracted some of the nation’s most notable industrial developers and many recognizable Fortune 500 companies, including Amazon, FedEx, Home Depot and Whirlpool.

Net absorption in this submarket has risen to 4.6M SF in 2018, but the vacancy rate is still 16.1%, according to CBRE Research, which compiled a snapshot of the submarket for Bisnow

I-35 Logistics Crossing in Lancaster

CBRE Research attributes the high vacancy rate to several vacant speculative distribution center deliveries, but said commercial real estate analysts remain optimistic about the submarket as several large tenants have recently taken space or are looking in the submarket.

Notable deliveries during the third quarter included I-35 Logistics Crossing, twin buildings with 602K SF apiece by developer Crow Holdings Industrial and the 874,566 SF build-to-suit for e-commerce giant Wayfair, which is in Lancaster along I-35 just south of I-20.

South Dallas has been a hotbed for construction during this real estate cycle, particularly in the big-box distribution segment. Developers added over 22.6M SF to the Southwest Dallas industrial submarket since 2015, according to CBRE Research. Just over 1.5M SF of industrial space was under construction in the submarket at the end of Q3 with 78% of that pre-committed.