Tuesday, June 03, 2014

D-FW warehouse construction tops pre-recession building volumes

Developers have ramped up warehouse building in North Texas to a new high point.

At the end of the first quarter, about 16.5 million square feet of new industrial buildings were in the construction pipeline in the Dallas-Fort Worth area, Cushman & Wakefield of Texas reported Wednesday.

That’s more than a million square feet ahead of where construction in the market was in 2007 before the recession hit.

“We’re looking at about 12 million square feet of speculative warehouse space under construction,” said Jay Lucas, Cushman & Wakefield senior director. “The big question is, does all of it make sense?

“In the next three to six months we’ll see.”

During the recession, warehouse building in North Texas ground to almost a halt.

But as the economy has recovered, major companies have been snapping up large blocks of empty distribution space.

The largest volume of warehouse building in the Dallas area is in the Interstate 20 corridor, where developers are putting up about 3.4 million square feet of industrial space.

Even with all the new construction, industrial building vacancy in D-FW averaged only 8.4 percent at the end of March, according to Cushman & Wakefield.

So far this year, net warehouse leasing has totaled about 3 million square feet in the area — up from 2.4 million square feet a year ago.

“The market is wild,” Lucas said. “All the companies are looking for bigger spaces.”

Steve Brown- Dallas News