Q4 2023: Dallas Industrial Market Report

Record deliveries in the Dallas-Fort Worth industrial market have pushed vacancy rates to 8.5 percent, a high last recorded in 2012. Developers added 70.7 million square feet in 2023, the highest level on record. Nearly half of the volume is from buildings 500,000 square feet or greater. Increasing availability trends are contingent on building size, type, and location. Logistics buildings above 500,000 square feet report availability of 15 percent, up from nine percent in 2020. Leasing activity totaled just over 69 million square-feet in 2023, down from the recent highs of 2020-2023, yet still above pre-pandemic totals. Market rent growth is keeping pace at a significant annual increase of nine percent year-over-year, de-accelerating from a peak of 12.6 percent in 2022.

Though construction starts are softening, due in part to rising interest rates and elevated construction costs, over 41.2 million square feet is currently under construction throughout the market. The pace of deliveries is expected to slow further in early to-mid 2025. South Dallas has been a submarket cluster with surging deliveries, partly due to cheaper land, and direct access to I-20 and I-45 and the Dallas Inland Port, home to the Union Pacific Intermodal Terminal. Other areas with significant deliveries include: North Fort Worth, Denton and Kaufman counties.