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Wednesday, May 27, 2015
JLL Research Points to Hearty Industrial Market
Vacancy is likely to decrease into the mid-6 percent range by year-end or the first quarter of 2016.
DALLAS—The state of the industrial market in Dallas-Fort Worth is good, according to new research from JLL.
According to the firm, however, industrial vacancy has gone up marginally in the first quarter due to a “record level of deliveries;” currently, it stands at 6.9 percent.
“One of the most dynamic industrial submarkets in DFW is South Dallas,” JLL research manager Steve Triolet, told GlobeSt.com. “It has a significant amount of construction under way (over 5 million square feet) but there are also several large leases pending, which should help tighten the vacancy rate over the few quarters. Overall, the submarket is one to watch from a big-deal perspective.”
Though the vacancy rate is still low by historic standards and demand fundamentals remain high, in the last year, Dallas added an estimated 23,000 industrial jobs. In addition, JLL has found significant demand in the 400,000 to 600,000-square-foot sector, a “sweet spot” for the new spec construction. The JLL industrial team also says tenants in the 100,000 to 150,000-square-foot range are expanding.
With such a strong start to 2015, the JLL team is estimating 12 million square feet of net absorption this year. That, combined with a more restrained development pipeline, is likely to bring vacancy down into the mid-6 percent range by year-end or the first quarter of 2016.