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New DFW Industrial Markets Roaring To Life

Heading into 2020, market analysts predicted less well-known cities on the periphery of Dallas-Fort Worth would emerge as industrial players.

Industrial

After all, Dallas-Fort Worth ranks No. 1 in industrial demand and supply, Cushman & Wakefield said in its latest 2020 North American Industrial Outlook.

And Cushman predicts DFW industrial absorption will soar again this year, reaching 45.1M SF during the 2020-2021 cycle.

In late 2019, industrial commercial real estate experts pegged parts of Fort Worth and Denton County as top emerging industrial markets, along with pockets of land bordering Interstate 35.

Analysts also predicted stronger growth in emerging industrial markets outside the DFW core, especially as infill properties and established submarkets oversaturate. 

While it is too soon to cast these predictions in stone, three industrial developments, just announced within days of each other, bolster the theory that big dollars are flowing into emerging submarkets. 

Denton Crossing @ I-35

Ironwood Realty Partners and Scannell Properties just broke ground on a 1.2M SF speculative industrial hub in Denton, called Denton Crossing @ I-35.

This 83-acre site near the I-35 East and I-35 West connector will bring four buildings online, three of which are slated to be larger than 330K SF. 

New DFW Industrial Markets Roaring To Life
Map of Hillsboro Rail Park in Hillsboro, Texas.

Hillsboro Rail Park in Hillsboro 

Hillsboro, a city 57 miles south of Dallas, landed its first manufacturing tenant inside the 78-acre master-planned Hillsboro Rail Park, developed by Hughes Commercial Real Estate and Development.  

With two building sites left on the 1.5M SF industrial property, Hughes announced Berkshire Hathaway-owned Johns Manville is planning to occupy a 418K SF manufacturing plant developed by Hughes Commercial with the help of Peinado Construction, Alliance Architects, Kimley-Horn Engineers and Via Rail Engineering. 

Hillsboro Rail Park benefits from proximity to Interstate 35 and rail transport services provided by Union Pacific Railroad. Land acquired by investors in the park also qualifies for tax credits through the New Markets Tax Credit Program.  

“It’s a very powerful federal incentive that is administered by the Department of Treasury, and we utilize that program for 100% of [the] development clients and site selection clients that we represent,” Hughes Commercial founder Craig Hughes said. “The bottom line is it is going to save them about 20% of the total cost of construction and equipment.”

With industrial land in Hillsboro selling by the acre, and not the square foot, Hughes sees a competitive advantage for Hillsboro against more established North Texas submarkets.  

“The land is quite a bit cheaper and the labor is a little bit cheaper." 

New DFW Industrial Markets Roaring To Life
Rendering of Midlothian master-planned community with industrial.

Midlothian's Next Industrial Play 

Midlothian, another small city south of Dallas, is getting high-quality industrial  development within a $950M master-planned community. 

Hanover Property Co. is setting aside 42 acres inside the development just for industrial.

The nearly $1B project also will offer single-family housing and other commercial development to support incoming neighborhoods.