CARROLLTON, TX—A healthy amount of industrial absorption continues throughout the metro, thanks to steady supply meeting growing demand, keeping the total vacancy around the 7.4% mark through third quarter 2017, according to JLL research. With nearly 20 million square feet delivered this year—if the recent past holds true—this flurry of development activity won't be an over-supply. For example, 2015 delivered nearly 20 million square feet, and since then, more than 18 million square feet of that has been absorbed.
Historically, there has been a lag in the lease-up of new Dallas industrial space. However, Dallas continues to see healthy absorption among warehouse and distribution properties—having already re-leased some of the larger move-outs from the GSW/Arlington submarket, GlobeSt.com learns.
Moreover, Northeast Dallas continues to emerge as a hot spot for manufacturing space. The tenants going into these spaces are venturing beyond traditional manufacturing companies to design, engineer, and install custom products. Some are even patenting new processes, GlobeSt.com learns. This follows a growing trend of narrowing the space between product designer, tester and assembly. The Northeast submarket is uniquely equipped with a labor mix able to fill the middle-skills gap between professional and vocational STEM skills to meet the needs of these types of tenants.
In addition, Dallas offers an above-average location for contact center workforce labor quality and operating environment. For that reason, companies are looking at older product with potential for creative conversion.
And some are staying put and expanding. Such is the case with Illes Foods, the seasonings and flavors company, which has renewed its 73,584-square-foot industrial lease and expanded into the additional 81,912 square feet of Prologis Valwood One located at 2022 McKenzie Dr. Illes Foods will occupy its new space in January.
JLL managing director Tom McCarthy and senior associate Elizabeth Jones negotiated the lease on behalf of the tenant. Mitch Pruitt represented the owner.
“Illes' expansion strengthens their strategic positioning within an area of projected growth for their company while providing great access for their logistics hub,” said McCarthy. “North Texas is one of the most active markets in the US, and their firm is situated to better serve the growing population of Far North Dallas and our region.”
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Lisa Brown
Lisa Brown is an editor for the south and west regions of GlobeSt.com. She has 25-plus years of real estate experience, with a regional PR role at Grubb & Ellis and a national communications position at MMI. Brown also spent 10 years as executive director at NAIOP San Francisco Bay Area chapter, where she led the organization to achieving its first national award honors and recognition on Capitol Hill. She has written extensively on commercial real estate topics and edited numerous pieces on the subject.
