Tony Crème
Hillwood
In 2017 the Dallas-Fort Worth industrial market completed an all-time North Texas high 26.8 million square feet of new space, breaking the record it set just last year by approximately 4.1 million square feet. In addition, almost 24 million square feet of net warehouse leasing occurred in DFW last year. This marks the 29th consecutive quarter of positive absorption, and there is no sign of that momentum slowing in 2018. DFW is now the third largest industrial market in the U.S. at 884 million square feet, trailing only Chicago (1.2 billion square feet) and Los Angeles (927 million square feet).
Greater Tarrant County accounts for approximately 38 percent of DFW’s total industrial inventory, and was responsible for almost half of the 18.9 million square feet under construction in DFW at the end of 2017. Each submarket in Tarrant County made headlines in 2017 because of the healthy economy and extremely active overall DFW industrial market. From UPS acquiring Hillwood’s 800,280 square foot Westport 18 in AllianceTexas, to Exel leasing its 712,000 square foot speculative building to Campbell’s at Mark IV, to Majestic, Holt and Rob Riner Cos. all breaking ground on new speculative projects in south Fort Worth, and NorthPoint Development announcing its 1.2 million square foot Arlington Automotive Logistics Center, there was no shortage of big deals to report last year.
AllianceTexas experienced significant activity from all facets of the business including leasing, development and land acquisition. General Mills renewed its 860,000 square foot lease in the Alliance Gateway, which will rank as one of the top 5 industrial deals in DFW for 2017. In addition, Hillwood sold its 800,280 square foot spec building plus 42 adjacent acres to UPS for their second parcel sort hub at AllianceTexas. Trammell Crow broke ground on three new buildings totaling approximately 1.6 million more square feet of speculative space. IDI broke ground on its 316,128 square foot Speedway Distribution Center Building C, and Stream leased the last remaining 350,000 square feet in their Northport 35 project to Allen Distribution. Lastly, the joint venture between TCRG and Ironwood Realty broke ground on their first speculative building totaling 496,782 square feet located at Interstate 35W and Golden Triangle.
Moving south to the intersection of Interstate 35W & 820, the developments of Railhead, Mark IV, Fossil Creek and Mercantile each experienced a flurry of activity last year. In Railhead, Ridge Development leased their 299,810 square foot building to Dematic and immediately broke ground on the second phase of Ridge Railhead, an adjacent 343,720 square foot speculative building. On the south side of 820, Andrews Distributing commenced construction on their new 400,000 square foot beverage distribution center. Scannell purchased 33 acres on the north side of 820 and launched a two-building spec project totaling 473,000 square feet. At the northwest corner of 820 and I-35W in Mark IV, Exel leased their new 712,000 square foot speculative building to their client, Campbell’s, and subsequently sold it to Transpacific Development Company. On the east side of I-35W in Mercantile, Hunt Southwest leased 492,322 of their new speculative building to S&S Activewear. Lastly, at the northeast corner of I-35W and 820, a joint venture between Johnson Development and Huntington Industrial broke ground on two new speculative buildings totaling 432,458 square feet.
The South Fort Worth submarket is starting to reinvent itself as a real player in the modern industrial game. Last year it was reported that 2016 saw several new developers/investors taking land positions in this submarket. In 2017, these owners showed their confidence in this area by moving forward on three new speculative projects. A joint venture between Rob Riner Cos and Crow Holdings just completed two new speculative buildings totaling 488,564 square feet in Carter Distribution Center, and Majestic is nearing completion on the first 287,261 square foot building in their Fort Worth South Business Park. Lastly on the new development front, TA Realty has broken ground on their 4-building 457,745 square foot Everman Trade Center at I-35W and Everman Parkway. In addition to this new building activity, Associate Wholesale Grocer’s sold their 1,147,977 square foot distribution center to Highridge Provender, a facility that was originally built for Albertson’s. I think we will see more exciting announcements in 2017 coming out of this area of Fort Worth.
In eastern Tarrant County, the submarkets south of DFW airport were very active last year. Exeter leased its 1M square foot speculative building in Arlington Commerce Center to UPS, which was one of the top 3 industrial deals in DFW for 2017. In Great Southwest, the redevelopment trend that we saw in 2015 and 2016 continued into 2017 as the former High Point Church site at the northwest corner of State Highway360 and Interstate 20 is now home to the first four industrial buildings in the Park 20/360 project. At I-30 and 360, NorthPoint Development announced the Arlington Automotive Logistics Center on the site of the former Six Flags Mall. At the end of 2017 they were half way through construction on two buildings totaling 1.2 million square feet that will house suppliers for the General Motors Arlington Assembly Plant just across Highway 360.
Overall, the Tarrant County industrial market was extremely active in 2017, and we see this momentum continuing into 2018 with all the new buildings that are either planned or under construction. In addition to these new projects, I believe the continued growth of Tarrant County will catch the attention of more developers and brokers who do not currently have a presence on the west side of DFW Airport as they realize the potential of this industrial market.
Tony Crème is senior vice president at Hillwood.