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Despite Sluggish Start to 2016, Industrial Fundamentals Grow

Craig Jones at JLL

After a record 2015 and a sluggish start to 2016, many industrial folks thought this year would be an uphill battle to keep pace. JLL's Q2 data shows that industrial fundamentals are not only surviving, but thriving.

JLL managing director Craig Jones calls the 10M SF of absorption in 2016 a pleasant surprise. JLL thinks that if it keeps pace now, 2016 will compare to 2015. And a couple of big forthcoming industrial deals from JLL will springboard fundamentals in upcoming weeks. Craig and many others previously expected a flattening or downturn in late 2016, but now believe that won't happen until mid-2017 or later.

Industrial report Q2 2016

But the sheer volume of absorption may not accurately depict the landlord-favorable market. Of that 10M SF, about half were expansions or additional locations for companies already in North Texas. That speaks loudly to the number of companies committing to growing their businesses in the area, Craig tells us.

With all this favorable Q2 data, some tenants up for renewal might have sticker shock at rents increasing by 5.2%. Craig notes the importance of educating tenants about the market so they understand why their rents may be increasing by 10% or 20% when coming off a yearlong lease.

Related Topics: Craig Jones, JLL Dallas