07-28-2018
Fort Worth Business Press – Metal Fabrication Dallas
CBRE industrial market highlights:
Q2 2018 is the 31st consecutive quarter of positive absorption for the Dallas-Fort Worth industrial market.
Industrial occupiers took down just under 6 million square feet in the second quarter, bringing the year-to-date absorption total to nearly 10 million square feet, in line with mid-year absorption levels seen over the past three years.
The construction pipeline grew by 7.9 million square feet in new starts over the quarter to reach a record – 22.3 million square feet of new industrial and flex product underway in the D-FW area.
Product coming online totaled 6.4 million square feet and was 54.8 percent pre-committed, largely due to several build-to-suit properties delivering in the past 90 days.
The market-wide vacancy rate was essentially unchanged over the quarter at 5.8 percent.
Source: CBRE
Just as prospective homebuyers jockey to score in Dallas-Fort Worth’s competitive real estate market, demand for warehouse and industrial space has boosted the area’s industrial market to the fourth largest in the country.
It comes as no surprise that residential and industrial growth – as well as commercial growth – are driven by population growth. Dallas-Fort Worth added 146,000 new residents in 2017, making it the fastest-growing metropolitan area in the nation, according to the U.S. Census Bureau .
Tarrant , Collin , Dallas and Denton were among the nation’s top 10 counties for gaining newcomers, who were drawn by the area’s robust economy, plentiful jobs and affordability compared to other regions.
“Population growth means greater demand for more goods,” said Tony Crème , senior vice president in charge of the industrial focus for Hillwood . “And that means more demand for e-commerce sites and warehouses.
“We’re a very, very hot market in the country,” Crème said.
In the D-FW market, Dallas leads Fort Worth in population growth and the size of its real estate markets. But recent economic indicators show Fort Worth is gaining on its counterpart in population, job growth and housing starts, which economists and real estate insiders say is because Fort Worth is more affordable and has abundant available land for new homes, office buildings and warehouses.
Fort Worth’s industrial market is exceeding expectations, according to Sarah LanCarte , managing director of industrial for Fort Capital , a Fort Worth real estate investment firm.
“Just four years ago, there were very few national developers taking space and setting up operations in Fort Worth ,” said LanCarte, who recently led Fort Capital in the acquisition of four industrial properties totaling 369,627 square feet. “But now major firms can’t get here fast enough.”
Fort Worth has long been known as a manufacturing hub but has also experienced robust growth as a distribution center. Driving that growth is its logistics, which includes major highways, Dallas-Fort Worth International and Alliance airports and major railroad lines such as BNSF and Union Pacific .
Because population growth in the Fort Worth area lagged Dallas , the western side of the region was overlooked for new industrial development.
But as land for industrial development becomes scarcer in Dallas , Fort Worth is becoming more desirable because of the abundance and lower cost of land, Crème said.
Major residential developments such as Walsh, which is expected to add about 50,000 new residents, and Veale Ranch , bringing an estimated 33,000 new residents, increases the need for more industrial space, especially warehouses, LanCarte said.
“Some areas of Fort Worth remain untapped with industrial development, most notably west Fort Worth ,” she said.
Hillwood recently announced that it will build two new speculative industrial buildings with a combined total of nearly 1.3 million square feet to help meet demand in North Fort Worth . Alliance Center North 3 will offer 782,000 square feet in Fort Worth and Alliance Northport 1 will contain 500,000 square feet in Northlake . Both buildings will be located along Interstate 35W in southern Denton County .
Crème said Hillwood has leased more than 3 million square feet at Alliance during the first half of the year so “this is a continuation of our aggressive speculative building program to meet the demands of the market by having existing product on the ground ready to occupy.”
As a whole, the D-FW area has added 100 million square feet of new industrial properties and the market has had seven years of positive net absorption, Crème said.
That level of sustained growth has boosted D-FW from the fifth largest industrial market in 2007 to the fourth largest, trailing the Los Angeles area, Chicago and the Philadelphia area.
In the D-FW construction pipeline, 22.3 million square feet of industrial property is under construction, including 7.9 million that began in the second quarter of this year, according to research from CBRE, the nation’s leading commercial real estate firm, based in California .
Despite rampant development, the vacancy rate has not edged up from a steady 5.8 percent, according to CBRE.
Warehouse users, e-commerce firms, manufacturers and others are snapping up available space almost as fast as it becomes available. The strength of the market has also made it top target for investors.
The D-FW market is “the second most desirable market for investment in the Western Hemisphere,” according to a survey earlier this year conducted by CBRE researchers. Los Angeles edged out this area in the CBRE survey. A separate survey by the Association of Foreign Real Estate Professionals ranked industrial property as the top real estate investment type for foreign investors.
As a result, speculative development has reached an historic high level and rental rates for industrial space have increased more than 20 percent since 2010, with annual jumps of 2 to 4 percent, according to Holt Lunsford Commercial , a Dallas -based commercial real estate firm with an office in Fort Worth .
The D-FW industrial market has about 770 million square feet of inventory and is spread across 11,548 buildings, according to second quarter data from CBRE.
With seven industrial submarkets across the area, the Dallas markets accounts for about 65.7 percent of market share and Fort Worth accounts for the remaining 34.3 percent, according to CBRE data.
Fort Worth’s inventory of 264.1 million square feet is spread across 3,562 buildings. Dallas has 7,986 buildings containing 505.9 million square feet of inventory.
On the Fort Worth and Tarrant County side, the largest concentration of industrial inventory is in the Great Southwest/ Arlington submarket, with 108 million square feet of inventory, according to CBRE’s second-quarter data.
Recent top rental transactions there include Schumacher Electric’s lease of 358,143 square feet from Hillwood at CentrePort 2 and Living Spaces’s sublease of 858,000 square feet from Restoration Hardware at the Pioneer Distribution Center, according to Holt Lunsford.
The North Fort Worth submarket, including Alliance and the Meacham Field/Fossil Creek area, had inventory of 83,865,296 square feet, according to CBRE second-quarter report. In this area, sales, leasing and development are moving briskly, particularly in the Alliance area, where Black & Decker has pre-leased Hillwood’s new speculative space that is under construction, according to a Holt Lunsford report.
The South Fort Worth submarket, which includes most of central and south Fort Worth as well as Mansfield and southwest Tarrant County , had 71,242,208 square feet in inventory as of the second quarter, according to CBRE.
Top deals there include RTP’s lease of 135,141 square feet from Crow Holdings , according to Holt Lunsford.
The D-FW Airport submarket is split between Dallas and Tarrant counties and had 72,473,651 square feet of inventory during the second quarter, according to CBRE data.
The strength and lucrativeness of the D-FW industrial market has drawn a variety of investors, including oilman Paun Peters , who earned a fortune in energy before returning to his roots in real estate investment.
Peters’s Fort Worth -based Corinth Land Co. and his Dallas -based partner, Prattco Creekway Industrial , recently announced the acquisition of an East Dallas – Garland business park. The property includes 213,481 square feet and is fully occupied with 11 tenants. The partners had previously acquired industrial property in Arlington and White Settlement .
“We continue to see significant investment opportunities and our recent acquisitions of properties in Fort Worth and Dallas are perfect examples of the active North Texas market,” Peters said in a statement. ” Fort Worth is a strong player in this robust market and we continue to look for prospects here that are a strategic fit to our portfolio.”
Astro Sheet Metal offers custom sheet metal, with unique specialization in break metal, metal fabrication, cladding, stainless steel countertops, metal panels, custom metal fabricator, custom metal fabrication, stainless steel fabrication, stainless steel fabricator, metal welders, brake metal, column covers, architectural metals, metal fabrication shop, industrial metals, custom handrails, custom steel fabricators, stainless steel cladding, metal fabrication welding, metal fabrication service, and custom architectural metals. We are the premier provider for sheet metal dallas and sheet metal texas, with focus on metal fabrication Dallas. Please call 972-438-1110 for more information on our services and offerings.
