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Industrial Vacancy Stays Above 10% Again in Q3

DALLAS-Double-digit vacancy is a warning sign, but the good news is it held 10.1% and didn't go higher. Absorption dipped to 4.6 million sf, forcing developers to brake on spec starts.

By Connie Gore | Updated on October 09, 2008

[IMGCAP(1)]DALLAS-For the second consecutive quarter, Dallas/Fort Worth’s industrial vacancy has been above the 10% threshold, a tipping point that many consider a warning sign for the market. There is some good news: the 10.1% vacancy was held and didn’t slip any higher and developers have benched projects for the foreseeable future.

The industrial market’s vacancy is predestined to edge up, given the depth of the global fiscal crisis and the 9.6 million sf that’s due to come on line before the year ends. To date this year, 14.4 million sf has delivered, of which 76% was vacant at completion, according to Cushman & Wakefield of Texas Inc.’s third quarter research.

As a credit to Dallas/Fort Worth’s tenacity, year-to-date net absorption hit 4.6 million sf at Q3′s close, down 2.65 million sf from third quarter 2007. “The bottom line is compared to the rest of the county, we’re doing pretty well. We’ve had almost five million sf of absorption in our market in a tough economy,” says Dan Cook, C&W’s senior director in Dallas. The times seem slow because the North Texas market has been on steroids for the past few years, he adds. Inventory is up to 492.8 million sf.

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