Industrial Mid-Year Report_Q2 2019_FINAL

Cushman &Wakefield Dallas/Fort Worth

South Dallas

The South Dallas submarket has been the most active from a development perspective this cycle, more than doubling its inventory since 2012. It is home to mostly modern bulk distribution product with approximately 60% of its building stock constructed since 2010. The submarket is served by three Interstate freeways (I-20, I-35E and I-45) and is desirable for its proximity to both the Union Pacific Intermodal and FedEx Ground hubs.

experienced steady leasing velocity, while most development in the I-45 corridor has come from build-to-suits. The high vacancy rate is a direct result of the record high construction and deliveries over the past few years. Despite new supply of over 16 MSF over the last two years, construction starts in South Dallas have slowed during 2019, allowing net absorption to begin closing the vacancy gap. While South Dallas only saw 646K SF of net absorption during the first two quarters, the submarket leads DFW with 4 MSF in new leasing activity year-to-date.

380 DFW WITH 4 MSF OF NEW LEASING ACTIVITY DURING THE FIRST TWO QUARTERS OF 2019 THE SOUTH DALLAS SUBMARKET LEADS

75

380 The majority of speculative development has taken place in the I-35E/I-20 corridor and has

LITTLE ELM

FRISCO

ALLEN

75

PLANO

OBSERVATIONS & TRENDS

121

MURPHY

ADDISON

30 • South Dallas has seen a significant reduction in speculative construction activity during the first two quarters of 2019 • Build-to-suit product accounts for over 92% of the submarket’s 2.5 MSF under construction at the end of Q2 • Long-term, expect South Dallas absorption to outperform most other submarkets because of its available supply of modern bulk distribution product, ready to be leased at competitive pricing • Smuckers (1 MSF), Georgia Pacific (1 MSF), Systemax (487K SF), Petmate (468K SF) and Ace Hardware (450K SF) account for the majority of the submarket’s 4 MSF of mid-year leasing activity

RICHARDSON

CARROLLTON

35E

75

FARMERS BRANCH

635

635

114

12

12

HIGHLAND PARK

35E

30

183

IRVING

75

DALLAS

80

30

D

IE

12

35E

FORNEY

45

12

175

20

BALCH SPRINGS

12

20

20

HUTCHINS

67

35E

175

DUNCANVILLE

SOUTH DALLAS

45

DESOTO

LANCASTER

WILMER

67

35E

90 Q2 2019