DFW Industrial Sets Construction Record

IRVING, TX—The Dallas-Fort Worth industrial market continues its record run as one of the top in the country from a growth perspective. From fourth quarter 2019 to third quarter 2020, 33.7 million square feet was delivered, more than any other 12-month period.

One of the industrial properties developed in 2019 was Gateway Logistics Center. This five-building 1.4-million-square-foot class-A industrial park is situated near the south entrance of Dallas-Fort Worth International Airport. DFW Airport is one of the most desirable industrial submarkets in the Dallas-Fort Worth area.

BentallGreenOak recently acquired the industrial park on behalf of an institutional investor. The price was undisclosed.

The seller was Bandera Ventures and Long Wharf Capital, the development team. The center is leased to a roster of household name tenants.

“Investors are highly attracted to the DFW airport due to its proximity to the general rapidly rising population, as well as the growing importance of the airport as a freight hub of the South Central region,” Peter Kroner, investor research, industrial, JLL, tells GlobeSt.com. “Additionally, the broadening buyer pool launching investment into industrial assets is highly competitive, and this asset proves that the increased competition has driven investor interest in assets on ground leases near airport proximity.”

For the 19th consecutive quarter, the DFW market recorded more than 20 million square feet under construction due to the market’s strong fundamentals and sustained demand. These construction starts continue to backfill the development pipeline after the largest 12-month period of deliveries. After two quarters of decreased leasing activity, more than 12.1 million square feet was signed in third quarter 2020, above average for the last two years, according to JLL research.

Speculative projects with available space totaled 13.9 million square feet, accounting for 68% of all construction. This construction wave has been met with nearly equal demand, as year-to-date net absorption remains within 10% of the total space delivered.

These fundamentals and ongoing demand for space will continue to push rents higher along with new speculative construction well into 2021. In addition, several owner-user requirements targeting existing and build-to-suit projects are expected to lower the overall vacancy rate, says JLL.

The JLL capital markets investment advisory team representing the seller was led by managing director Dustin Volz, senior director Stephen Bailey, executive managing director Jody Thornton and analysts Zach Riebe and Wells Waller.