Jackson-Shaw Finds First Tenant for DFW Spec Industrial

Jackson-Shaw secured its first tenant for a 1.7 million-square-foot industrial development that just started construction northeast of Dallas.

Chassis assembly and component manufacturer SAF Holland Group signed a 256,000-square-foot lease at the 165-acre Lakeview Business District in Rowlett, the Dallas Morning News reported.

The first phase of Lakeview Business District, located along President George Bush Turnpike near Merritt and Liberty Grove Roads, will comprise five buildings totaling just over 1 million square feet. Construction will cost an estimated $15.8 million, with completion slated for March 2025.

Dallas-based Jackson-Shaw has tapped Compatriot Capital as an equity partner, with financing provided by Bank OZK and Affinius Capital. Other collaborators include architecture firm Pross Design Group and general contractor Peinado Construction.

Dallas-Fort Worth’s industrial sector exploded during the initial years of the pandemic, which accelerated an increase of e-commerce and a wave of development. However, demand has started to taper off, contributing to 11.1 percent vacancy in the first quarter, the outlet reported, citing Avison Young. That’s up from 9.7 percent in the fourth quarter.

Industrial vacancies in DFW have reached heights not seen since the Great Recession, but that’s not necessarily a cause for concern.

“Rather than the deep demand decline that drove the past increases, this time the increase is almost entirely due to the lag in lease-up of DFW’s extraordinarily high development pipeline,” Avison Young analysts wrote. “Our review underscores that the newest product is leasing, but it is the volume of [speculative] deliveries that is driving vacancy up.”

The drop in demand caused more than 14 million square feet of industrial space to flood North Texas’ sublease market last year, according to Newmark Group. An additional 69 million square feet of DFW warehouse space was vacant at year end.

—Quinn Donoghue