Colliers: DFW construction ‘beat goes on’

​DALLAS-FORT WORTH – The construction boom continued in Dallas-Fort Worth’s industrial market in 1Q 2016.

Over 4 million sf was delivered to the market and 20 million is still under construction.

Buildings under construction in DFW were 34 percent pre-leased at the end of the quarter, which is up from 20 percent at the end of Q4 2015.

Large distribution centers of over 1 million sf are becoming more prevalent, fueling speculation that the market is being over built; however, 15 of the 18 distribution centers that are over 1 million sf are leased.

Economic conditions in the Dallas-Fort Worth area remain strong, despite challenges in other parts of Texas tied to the downturn in the oil industry.

The Dallas Federal Reserve noted an increase in the production index in March, rebounded from negative rates in the first two months of 2016.

Additionally, due to increased credit availability, consumer spending has continued to rebounding from its post-recession lows, fueling more demand for ecommerce.

Overall market fundamentals continue to trend in positive directions—rental rates increased 5.3 percent from 1Q2015 and vacancy decreased 0.7 percent year-over-year. 

Net absorption exceeded 1Q 2015’s level by 559,590 sf. If similar levels of absorption can be sustained throughout the year, the market will reach just over 21 million sf of absorption.