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Keeping Up With Industrial Demand in North Texas

Written by Christine Perez, Senior Communications Specialist

Dallas-Fort Worth has long been a top national distribution and logistics market. But the region’s population growth in recent years has made it even stronger. Not only does D-FW’s central location make it easy for companies to get their products and supplies to destinations far and wide, the area’s 7 million residents are attracting new consumer goods and e-commerce companies.

Mark Collins

Mark Collins

Last year’s near-record leasing activity reflected that demand, says Mark Collins, Senior Director of Cushman & Wakefield’s Brokerage and Global Supply Chain Solutions team and Tenant Advisory Group. “Dallas is a very sought-after region,” he says. “Everyone looking at a regional distribution center—especially if it’s related to e-commerce—is looking here. It’s an exciting time for everyone in our sector.”

Last year was a record year for Collins. His clients included Chewy.com, which entered the Dallas market with a 663,000-square-foot facility on Grady Niblo Road. The world’s largest online pet food company, Chewy.com will create about 1,000 new jobs in South Dallas.

Grady Niblo Road - Source: CoStar

Grady Niblo Road – Source: CoStar

With robust demand, the challenge now is for new projects to keep pace. Thankfully, North Texas is home to a deep and talented base of developers. During 2016, they constructed a whopping 22.4 million square feet of industrial space, according to C&W research. The current construction pipeline is approaching 20 million square feet.

Most of the new projects are in South Dallas, which continues to attract mega-sized build-to-suits, and in Great Southwest and the area north of DFW International Airport. The DFW Real Estate Review tracks new development in its exclusive Crane Report.

Even with all of the new construction, there’s a good balance of supply and demand, Collins reports. “Developers were smart in this cycle; they waited until the market had rebounded after the downturn before they started building—and then they couldn’t build things fast enough,” he says. “Everyone is reaping the rewards from that constraint. New facilities are getting filled and the market is solid and healthy. Everything is making sense, and all arrows are pointing up.”

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