North Texas has widened its lead as the country’s market for industrial development.
Almost 67 million square feet of warehouse and distribution space was under construction in North Texas in October, the Dallas Morning News reports, citing a report from Yardi Systems. The total marked a record for the region and topped the charts for industrial construction in metro areas throughout the U.S.
Second-ranked Phoenix only had about 47 million square feet of industrial space under construction in October. Nationwide, nearly 714 million square feet of industrial building was recorded during this time.
Last month, a report from national commercial brokerage Savills measured that the Dallas-Fort Worth area had 78 million square feet of space under construction. It warned that the pipeline had far exceeded the 50 million square feet threshold, potentially putting the market at serious risk of becoming oversupplied.
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“Dallas’ market expansion showed no signs of slowing, with [the] local development pipeline nearing 67 million square feet,” Yardi Systems’ new CommercialEdge industrial report said. “While the market’s current construction pipeline is set to boost its industrial footprint by 7.8 percent, stock planned for the market that has yet to break ground could bring that increase as high as 13.1 percent.”
Industrial building activity in North Texas has more than doubled since the start of the COVID-19 pandemic as online shopping and demand for consumer goods skyrocketed. The current volume of industrial construction in the D-FW area is more than the space in all the high-rise buildings in downtown Dallas.
The trend also has made Dallas-Fort Worth one of the hottest markets in the country for industrial real estate. From the beginning of the year through the end of October, more than $4.05 billion worth of industrial properties in the area have changed hands. It was the third-highest in the country in terms of year-to-date sales— just behind Los Angeles’ $4.37 billion and $4.06 billion in California’s Inland Empire region.
— Maddy Sperling