DALLAS – North Texas industrial construction and leasing had been booming since the start of the pandemic—until recently. Lately, though, demand for warehouse and distribution space has begun to drop.
Net industrial leasing in DFW in 2Q2023 totaled about 7.8 million sf, down about 20 percent from a year earlier. Industrial leasing was well below the peak of almost 12.6 million sf of demand in 4Q2021, according to Transwestern.
Nationwide, net industrial leasing fell by more than 40 percent year over year in the second quarter, according to a new JLL study. DFW still led the country in total industrial building absorption in the first half of the year with more than 14 million sf of net leasing, JLL estimates.
North Texas industrial vacancies were up to 7 percent by the end of the second quarter, compared with just over 5 percent vacancy a year ago, according to Transwestern. Nationwide, there’s just over 4 percent of industrial space that’s empty, JLL estimates.
So far, warehouse rents have remained strong in North Texas—up about 19 percent year over year to an average of more than $7 per sf.