- Dallas led the nation in industrial investment volume with $3.8B in YTD sales, surpassing 2023 levels by $1.1B.
- Despite robust demand, the metro’s industrial vacancy rate rose to 8.3%, more than double the 4.1% recorded in October 2023.
- With 16.5 MSF under construction, Dallas boasts the second-largest industrial development pipeline in the nation, trailing only Phoenix.
The Dallas-Fort Worth metroplex solidified its position as a leader in industrial real estate in 2024, recording $3.8B in investment volume year-to-date through October. That’s $1.1B more than in the same period in 2023, according to CommercialEdge data.
However, the influx of new industrial supply has led to a sharp rise in the vacancy rate, challenging market fundamentals, as reported by Commercial Search.
Sales Volume Soars
Dallas topped the nation in industrial investment volume this year, ahead of other major markets like the Bay Area ($3.0B), Chicago ($2.6B), and Houston ($2.6B). Despite the strong sales, Dallas assets traded for an average of $113 PSF, below the national average of $129 PSF.
A significant transaction included Stonepeak’s acquisition of Alliance Gateway 61 and 53, a pair of rail-served Fort Worth assets totaling 1.1 MSF, from institutional investors advised by J.P. Morgan Asset Management.
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Wide Development Pipeline
Dallas boasts the second-largest industrial development pipeline in the country, with 16.5 MSF under construction as of October. Notable projects include:
- Alliance Westport 24: A 1.1 MSF speculative facility in Fort Worth by Hillwood, expected to deliver in late 2025.
- Plano Midpoint: Foundry Commercial’s conversion of a 1980s office building into two industrial facilities totaling 300 KSF, slated for completion in early 2026.
Phoenix remains the leader with 28.1 MSF under construction, but Dallas still outpaces other markets like Philadelphia (12.7 MSF) and Kansas City (11.7 MSF).
Vacancies Are Up
Dallas has seen substantial supply additions, with 27.4 MSF of industrial space delivered YTD as of October, accounting for 2.8% of the market’s total stock.
However, this supply surge has pushed the vacancy rate to 8.3%, significantly higher than the 7.2% national average and more than double last year’s 4.1%.
Despite this, demand remains steady, as evidenced by Google’s 1.1 MSF lease at Majestic Realty’s Creek Business Park in North Fort Worth. This is part of the tech giant’s $1B investment in Texas to bolster its cloud and data infrastructure.
Regional Outlook
While Dallas continues to lead in sales and development activity, the rise in vacancy poses challenges for landlords. Average rents in the metro grew by 8.1% YoY to $6.17 PSF, still trailing higher-priced markets like Orange County ($15.95) and Los Angeles ($15.05).
With significant new developments in the pipeline and steady investor interest, Dallas is poised to maintain its position as a top industrial market, even as it navigates the challenges of rising vacancy and a shifting demand landscape.
