Q1 2024 Dallas Industrial Market Report

Industrial leasing activity decelerated from historical highs in the first quarter, with 14.4 million square feet being transacted, the lowest first quarter reported since 2017. With 16.3 million square feet of new deliveries added during the first quarter. Continued deliveries, paired with an increase in sublet space, increased vacancy rates to 9.6 percent from 8.4 percent the previous quarter. This is the highest vacancy rate reported since 2012.

Net absorption has been supported by national retailers occupying large blocks of space, including Walmart, Niagara Bottling, and Dollar General, each taking over 1 million square feet in major industrial hubs in south Dallas and north Fort Worth.

Increasing availability depends on building size, type, and location. Logistics buildings above 500,000 square feet report availability of 15 percent, up from 9 percent in 2020.

Market rent growth is at a significant annual increase of 7.5 percent year-over-year, coming down from 9.0 percent reported last quarter. Vacancy rates may expand further, as 30.8 million square feet of projects are under construction, many of which are slated to deliver over the next 12 to 18 months.

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