Avison Young releases Second Quarter 2024 Dallas-Fort Worth

Dallas-Fort Worth, TX – Avison Young has released its Second Quarter 2024 Dallas-Fort Worth (DFW) Industrial Market Report.

DFW’s economy continues to expand. The region’s job base has risen by 10.5% since the end of 2019. Since year-end 2019, industrial jobs rose by 10.6%, or 78,000 new jobs in warehousing, wholesale trade, and manufacturing.

Even with this strong economy, DFW’s industrial vacancy remains elevated. As of Q2 2024 it hit 11%, comparable to where it stood in Q1 2024. While the vacancy is higher than the region’s long-term average of 8.3%, this is largely due to a lag in lease-up of its significant development pipeline.

For newer assets, industrial user demand has been strong. Limited space is available in properties delivered between 2019 and 2021, with vacancies well below the regional average. In comparison, more recent deliveries pull that average up.

“Although vacancy has increased slightly in existing properties, it remains well below the market’s long-term average. Because of that resilience, we do not see the higher vacancy as a major worry because it is driven by recent deliveries that are still in initial lease-up,” said Avison Young Senior Market Intelligence Analyst, Walter Bialas.

Due to tight supply in stabilized properties and consistent, strong demand, as well as increasing land and development costs, DFW’s industrial rents had rapidly increased the last several years. In Q2 2024, DFW’s average industrial rent came in at $8.34 per square foot – which is the first time in this cycle that the increases materially slowed.  This should bring some needed predictability back to the market for investors, developers, and space users.

“DFW’s industrial metrics have been exceedingly robust as the region continues to reinforce its position as a national logistics hub. While its central U.S. location and multimodal accessibility are key to this reputation, DFW is also an affordable alternative to other distribution markets where average rents can easily exceed $12 to $16 per square foot. We expect market vacancy to move lower in 2025 as our slower development pipeline lets this new product lease-up,” noted Greg Langston, Principal and Managing Director for Avison Young’s Dallas office.