Report: DFW continues to show strength in industrial market

Transwestern on Monday released its national industrial report for the second quarter of 2018. The report showed that that 37 of 47 markets posted positive absorption for the quarter, and 43 of 47 posted positive absorption for the previous 12-month period. Brisk absorption in the majority of primary and secondary markets has kept the national industrial vacancy rate low, with 30 markets recording vacancy at or below the U.S average of 5.0 percent.

Dallas-Fort Worth also continued its industrial growth spurt, leading the nation in product under construction while recording the second-highest trailing four-quarter net absorption total.

According to the report, Dallas-Fort Worth has a vacancy rate of 6.2 percent and has about 767 million square feet of industrial space in inventory. Rents have increased in DFW about 4.4 percent and there is 25.6 million square feet of industrial space currently under construction.

“After a slow start to the year, we saw a sharp uptick in consumer spending in the second quarter, which boosted e-commerce activity and contributed to job growth in the trade, logistics and transportation sectors,” said Matthew Dolly, Research Director in New Jersey. “In markets where absorption cooled somewhat, the issue is not lack of demand but a wait for new construction to deliver.”

- FWBP Digital Partners -

While leasing at coastal port markets such as the Inland Empire and New Jersey continued unabated, Columbus and Cincinnati, Ohio; Charlotte, North Carolina; and Phoenix were a few of the secondary corridors that made the top 10 for absorption in the second quarter, further fueling the conversation about labor shortages in the warehousing, transportation and construction industries.

In the second quarter, 39 markets saw year-over-year rent growth, indicating that tenants continue to battle for new industrial product, especially for improvements such as more efficient layouts and greater truck-court depths. In space-constrained markets where land is in play, developers are willing to explore site remediation as costs are likely to be recovered through higher rents.

“U.S. ports continue to experience record-setting volumes, and this has been amplified by retailers pre-ordering merchandise amidst rising trade tensions and tariffs that many fear will lead to higher-priced consumer goods,” said Michael Soto, Research Manager in Los Angeles. “While rising protectionism has added a level of uncertainty in the supply chain not seen in quite some time, the U.S. consumer has been resilient, and the market is expected to remain strong through year end.”

Download the national industrial market report at: