Warehouse surge

Dallas-Fort Worth leads the U.S. for construction of industrial space, says report

DFW leads the U.S. for construction of industrial space, says report

Commercial building construction
 DFW is the No. 1 market in the U.S. for under-construction warehouse and distribution centers. Getty Images

Industrial space equivalent to more than 320 Walmart supercenters is being built in Dallas-Fort Worth, making it the No. 1 market in the U.S. for under-construction warehouse and distribution centers.

Data published by Community Property Executive shows DFW had nearly 60.6 million square feet of industrial space under construction in late June. That represents a little over 7 percent of the existing industrial space (more than 840 million square feet) in the region. Put another way, 60.6 million square feet would correspond to 324 average Walmart supercenters.

DFW’s total for under-construction industrial space exceeds the totals for the second-place Phoenix area and the third-place Riverside-San Bernardino area in Southern California, according to Commercial Property Executive.

In DFW and throughout the country, the meteoric rise of e-commerce is the main driver of industrial construction. In May, the average vacancy rate for industrial space in the U.S. sat at a rock-bottom 4.7 percent, Commercial Property Executive says.

“Although the COVID-19 pandemic brought on new challenges for the industrial market, with port congestion, materials shortages, and commodity pricing skyrocketing, the market has and will continue to excel,” commercial real estate services company Cushman & Wakefield says in a recent report.

Elsewhere in Texas, 21.2 million square feet of industrial space was under construction in the Houston area at the end of June, Commercial Property Executive says. The same figure was nearly 8.3 million for the Austin area, more than 5.7 million for the El Paso area, and almost 4 million for the San Antonio area.

One of the leaders of developing industrial space in DFW is Dallas-based Stream Realty Partners. The company recently broke ground on a 3.4 million-square-foot industrial park in Mesquite, which Stream calls “one of the nation’s most robust industrial submarkets.”

The Stream project, called 20 East, is in the I-20 corridor. The first phase of 20 East will feature 1.8 million square feet across three buildings, and the second phase will comprise 1.6 million square feet across another three buildings.

“This development will provide both the eastern side of the Metroplex and the Interstate 20 corridor with much-needed industrial space attracting tenants in the logistics and distribution space,” says Matt Dornak, managing director of Stream’s Dallas operations.