Strong flow in Texas pipelines for industrial development

Dallas, Houston combine for than 20 percent of the national square footage under construction

Industrial construction (Illustration by The Real Deal with Getty Images)
Industrial construction (Illustration by The Real Deal with Getty Images)

Texas is no stranger to pipelines, but the Lone Star state has never seen flows like this before.

Based on their construction pipelines, the top five markets for industrial construction in the Southwest were all in Texas, according to Commercial Search’s latest report. Combined, these five markets are expected to expand the national industrial stock by 100 million square feet.

After the pandemic juiced up the e-commerce industry in 2020 and 2021, the demand for more industrial space has blown up.

Dallas ranked first in the U.S. and Houston ranked second in the Southwest. Together they account for more than 20 percent of 700 million square feet of industrial space under construction nationally.

The Dallas-Fort Worth metroplex had more than 61 million square feet underway, the equivalent of 7.2 percent of its total existing stock, which is slightly above 840 million square feet.

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Though it’s difficult to predict end-of-year completion, should DFW’s pace remain constant, the metroplex is on track to outperform its 2021 volume of 24.7 million square feet.

Notable DFW projects under construction include Stream Realty Partners’ industrial park in Mesquite and Texas Instruments’ chip manufacturing plant in Sherman.

The Greater Houston area has some 21.2 million square feet of industrial space under construction, which comes to around 145 Costco stores. Upon completion, this new industrial space would increase Houston’s total stock by 3.9 percent. In 2021, 19.6 million square feet of industrial space, or 3.8 percent of total stock, was delivered in the Houston area.

Austin has 8.3 million square feet of industrial space under construction. The Texas’ capital’s pipeline represents 7.3 percent of its existing stock of 114.5 million square feet. Though premier projects like Samsung’s semiconductor plant in Taylor and Tesla’s Giga Texas have put Austin’s industrial market on the map, the metro has faced setbacks such as the cancellation of the Amazon distribution center in Round Rock.

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