Industrial Mid-Year Report Q2 2020

Industrial Insider M I D -Y E A R R E P O R T | Q 2 2 0 2 0 DA L L A S / F O R T WO R T H , T E XA S

Cushman &Wakefield Dallas/Fort Worth

2

Q2 2020

Industrial Insider Mid-Year Report

Table of Contents

MID-YEAR UPDATE

4

DFW MARKET OVERVIEW

8

DFW OVERVIEW: SUPPLY

14

DFW OVERVIEW: DEMAND

20

SUBMARKET SNAPSHOTS

26

28

Allen/McKinney

32

Alliance

38

Brookhollow/Trinity

42

DFW Airport

48

Far North/I-35

52

Garland

56

Great Southwest

62

Mesquite

68

North Dallas/Metropolitan

72

North Fort Worth

76

Pinnacle/Turnpike

80

Redbird

84

Richardson/Plano/Frisco

88

South Dallas

94

South Fort Worth

100

Valwood/N Stemmons

104

Walnut Hill/Stemmons

ACTIVE LISTINGS

108

Q2 2020

3

Cushman &Wakefield Dallas/Fort Worth

75

35

AUBREY

MELISSA

380

DECATUR

380

DENTON

MCKINNEY

FARME

35W

Allen/McKinney

287

Far North/I-35

ALLEN

35E

PLANO

75

Richardson/Plano

FLOWER MOUND

Valwood/ N Stemmons

Alliance

RICHARDSON

COPPELL

North Dallas/ Metropolitan

ROWLETT

30

KELLER

35E

DFW Airport

35W

Garland

Walnut Hill/ Stemmons

12

North Fort Worth

IRVING

635

East Da

75

Brookhollow/Trinity

Central Dallas

HALTOM CITY

DAL LAS

West Fort Worth

Pinnacle/Turnpike

East Fort Worth

Mesquite

30

ARLINGTON

Central Fort Worth

GRAND PRAIRIE

30

20

Great Southwest

FORT WORTH

20

12

Redbird

20

20

BENBROOK

DUNCANVILLE

35W

South Dallas

175

South Fort Worth

CEDAR HILL

LANCASTER

287

BURLESON

FERRIS

CRESSON

34

45

35E

MIDLOTHIAN

35W MID YEAR NET ABSORPTION (16.1 MSF) OUTPACED THE 14.9 MSF OF MID-YEAR CONSTRUCTION COMPLETIONS, TIGHTENING THE OVERALL VACANCY RATE TO 6.1% (LOWER BY 20 BASIS POINTS FROM 2019 YEAR-END).

4 Q2 2020

Industrial Insider Mid-Year Report

N

Mid-Year Update

Welcome back to The Industrial Insider. We hope you and your families have been staying healthy and safe. Our team is excited to present the state of the Dallas/Fort Worth industrial market with our Industrial Insider – 2020 Mid- Year Report . In this report, we summarize the performance of the DFW industrial market year-to-date and inform you on what to expect during the second half of the year. The DFW industrial market had a strong start to 2020 despite the arrival of the COVID-19 global pandemic, posting 16.1 MSF of overall net absorption year-to-date. This puts DFW on track to surpass 20 MSF in net absorption for the sixth consecutive year. Mid-year net absorption outpaced

the 14.9 MSF of mid-year construction completions, tightening the overall vacancy rate to 6.1% (lower by 20 basis points from 2019 year-end). Construction activity remains elevated with 23.5 MSF of new supply under construction today (compared to 28.4 MSF under construction at the end of 2019), of which, 3.7 MSF (16%) is build- to-suit or preleased product. Looking ahead to the second half of 2020, we believe the DFW market will continue to see robust supply and demand activity. Current active tenant requirements continue to be strong at approximately 17 MSF. We hope you find this special 2020 Mid-Year Report edition of our Industrial Insider informative.

ERSVILLE

380

ROYSE CITY

allas

34

TERRELL

KAUFMAN

175

Kurt Griffin, SIOR Executive Managing Director +1 972 663 9818 kurt.griffin@cushwake.com

Nathan Orbin, SIOR Executive Managing Director +1 972 663 9819 nathan.orbin@cushwake.com

Ann Jaggars Analyst +1 972 663 9775 ann.jaggars@cushwake.com

Q2 2020

5

Cushman &Wakefield Dallas/Fort Worth

Special Thanks to our Landlord Clients for a Great Start to 2020

6 Q2 2020

Industrial Insider Mid-Year Report

Q2 2020

7

Cushman &Wakefield Dallas/Fort Worth

DFW Overview

8 Q2 2020

Industrial Insider Mid-Year Report

Q2 2020

9

Cushman &Wakefield Dallas/Fort Worth

DFW Overview

The Dallas/Fort Worth industrial market has had quite an impressive start to 2020, holding its role as a leader among major U.S. gateway markets from both a supply and demand perspective. Tenants, developers and investors continue to seek opportunities in the DFW industrial market. DFW’s central location allows it to function as one of the nation’s largest logistics and distribution hubs, giving businesses an edge by putting key markets within easy reach of both truck, air, and rail shipping. Strong industrial demand in the DFW market continues, as demonstrated by the 16.1 MSF of net absorption at mid-year. New supply delivered during the first two quarters equaled 14.9 MSF, of which nearly 50% is accounted for by tenants. Speculative product accounts for 74% (11.1 MSF) of mid-year deliveries, 30% (3.4 MSF) of which has leased.

There is 23.5 MSF of new supply under construction at mid-year, 88% (20.8 MSF) of which is speculative product. Mid-year vacancy is 6.1%, down 20 bps from year-end 2019. However, we expect to see a slight increase in overall vacancy by year- end as a majority of the 20.8 MSF of speculative product (currently 7% pre- leased) delivers. Biggest move-ins during the first half of 2020 include Home Depot (1.5 MSF) in GSW, Goodyear (1.2 MSF) in East Dallas, Amazon (1 MSF) at DFW Airport and Callaway Golf (783K SF) in Alliance. Looking ahead, our team remains very optimistic as DFW is well positioned to experience elevated demand to keep up with the current construction activity, resulting in below average vacancy and continued rent growth.

BIGGEST MOVE- INS DURING THE FIRST HALF OF 2020 INCLUDE HOME DEPOT (1.5 MSF) IN GSW, GOODYEAR (1.2 MSF) IN FORNEY, AMAZON (1 MSF) AT DFW AIRPORT AND CALLAWAY GOLF (783K SF) IN ALLIANCE.

MARKET SUMMARY

2012 2013 2014 2015 2016 2017 2018 2019 YTD 2020

629.4

636.8

653.9

673.4

694.5

722.8

750.9

775.6

790.1

Inventory (MSF) Overall Net Absorption (MSF) Overall Vacancy

12.1

17.4

15.6

20.2

23.7

25.9

22.9

30.2

16.1

8.7% 7.0% 7.1% 6.8% 6.0% 6.5% 7.1% 6.3% 6.1%

Completions (MSF)

2.1

7.4

17.1

19.6

21.2

29.2

26.9

24.4

14.9

Under Construction (MSF)

4.0

13.9

16.6

20.3

26.6

19.3

21.7

28.4

23.5

10 Q2 2020

Industrial Insider Mid-Year Report

DFW Overview

OVERALL NET ABSORPTION 16.1 MSF 6.1% 14.9 MSF 23.5 MSF OVERALL VACANCY

COMPLETIONS

UNDER CONSTRUCTION

HISTORICAL DFW INDUSTRIAL ABSORPTION

35 MSF

30 MSF

25 MSF

20 MSF

15 MSF

10 MSF

5 MSF

MSF

2011

2012

2013

2014

2015

2016

2017

2018

2019

Est. 2020

NET ABSORPTION 20 MSF THRESHOLD NET ABSORPTION 20 MSF THRESHOLD

Q2 2020

11

Cushman &Wakefield Dallas/Fort Worth

VACANCY

15-Year Historical Average = 8.5% 15- EAR HISTORICAL AVERAGE = 8.5%

10.0%

9.0%

8.0%

7.0%

6.0%

5.0%

4.0%

3.0%

2.0%

1.0%

0.0%

2012

2013 YTD 2020 2015 2014

2016

2017

2018

2019 YTD 2020

OVERALL VACANCY RATE

HISTORICAL AVERAGE

NET ABSORPTIONS / COMPLETIONS

NET ABSORPTION / COMPLETIONS

35.0

30.0

25.0

20.0

15.0 Millions

10.0

5.0

0.0

2013 YTD 2020 2015 2014

2012

2016

2017

2018

2019 YTD 2020

OVERALL NET ABSORPTION COMPLETIONS

12 Q2 2020

Industrial Insider Mid-Year Report

DFW Overview

Overall Vacancy Rate

YTDNet Absorption

Under Construction

YTD Completions

Submarket

Inventory

Allen/McKinney

10,750,366

6.2%

73,234

919,165

0

Brookhollow/Trinity

49,121,429

2.3%

254,564

0

0

Central Dallas

14,299,051

2.6%

-48,141

0

0

DFW Airport

89,191,746

7.7%

1,298,304

4,885,479

2,060,154

Far North/I-35

21,715,047

4.4%

97,151

1,745,596

0

Garland

44,724,051

5.3%

660,618

355,071

0

Great Southwest

116,745,635

4.5%

2,940,870

576,123

1,901,557

Mesquite

20,611,202

11.4%

926,043

1,865,513

0

North Dallas/Metropolitan

19,035,527

3.1%

190,872

0

0

Pinnacle/Turnpike

30,454,102

5.7%

1,224,330

392,220

1,281,694

Redbird

23,231,527

2.5%

299,000

0

0

Richardson/Plano

36,814,982

7.1%

1,039,674

402,946

964,565

East Dallas

11,776,983

0.4%

1,203,939

275,600

1,207,538

South Dallas

57,402,297

12.4%

2,295,033

616,043

450,000

Valwood/N Stemmons

51,451,040

3.4%

417,349

71,100

334,405

Walnut Hill/Stemmons

22,509,987

2.5%

166,843

0

388,904

DALLAS TOTAL

619,834,972

5.6%

13,039,683

12,104,856

8,588,817

Alliance

51,466,576

14.8%

1,359,636

7,456,540

5,237,864

Central Fort Worth

15,936,495

2.0%

-19,499

0

0

East Fort Worth

23,600,202

1.6%

252,718

0

0

North Fort Worth

47,117,692

7.1%

720,868

952,764

1,064,500

South Fort Worth

27,942,721

5.1%

757,130

3,008,568

0

West Fort Worth

4,181,020

5.4%

1,249

0

0

FORT WORTH TOTAL

170,244,706

7.8%

3,072,102

11,417,872

6,302,364

DFW TOTAL

790,079,678

6.1%

16,111,785

23,522,728

14,891,181

TA B L E O F CON T E N T S

Q2 2020

13

Cushman &Wakefield Dallas/Fort Worth

DFW Overview: Supply

14 Q2 2020

Industrial Insider Mid-Year Report

Q2 2020

15

Cushman &Wakefield Dallas/Fort Worth

Supply

Completed First Generation Vacancies

upply

N Stemmons/Valwood

Far North/I-35

Walnut Hill/Stemmons

Garland

South Fort Worth

Mesquite R ichardson/Plano

pleted Construction

A lliance

Pinnacle/Turnpike

GSW

FIRST GENERA TION VACANCIES COMPLETED FIRST GENERATION VACANCIES

DFW A irport

South Dallas

North Ft Worth

Allen/McKinney Far North/I-35 Mesquite Pinnacle/Turnpike Redbird Walnut Hill/Stemmons

Alliance Garland N Stemmons/Valwood

GSW North Ft Worth South Ft Worth Richardson/Plano

South Dallas DFW Airport

16 Q2 2020

Industrial Insider Mid-Year Report

SUM OF AVAILABLE SPACE - Completed First Generation Vacancies

(VACANCY WITHIN RANGE)

Building Size (SF)

100,000-249,999 250,000-499,999 500,000-749,999 750,000+

Grand Total

Alliance

1,024,566

1,091,240

677,429

2,092,178

4,885,413

DFW Airport

789,667

1,364,170

2,153,837

Far North/I-35

219,808

219,808

Garland

315,084

315,084

GSW

1,074,466

1,074,466

Mesquite

584,089

584,089

N Stemmons/Valwood

311,905

311,905

North Ft Worth

961,008

581,000

1,023,488

2,565,496

Pinnacle/Turnpike

608,939

608,939

Richardson/Plano

466,110

466,110

South Dallas

795,403

458,576

660,312

900,043

2,814,334

South Ft Worth

106,308

106,308

Walnut Hill/Stemmons

199,070

199,070

Total

5,188,929

3,988,452

3,111,769

4,015,709

16,304,859

COUNT OF AVAILABLE SPACE - Completed First Generation Vacancies

(VACANCY WITHIN RANGE)

Building Size (SF)

100,000-249,999 250,000-499,999 500,000-749,999 750,000+

Grand Total

Alliance

6

3

1

2

12

DFW Airport

6

3

9

Far North/I-35

1

1

Garland

2

2

GSW

3

3

Mesquite

1

1

N Stemmons/Valwood

2

2

North Ft Worth

5

1

1

7

Pinnacle/Turnpike

1

1

Richardson/Plano

3

3

South Dallas

5

1

1

1

8

South Ft Worth

1

1

Walnut Hill/Stemmons

1

1

Total

32

10

5

4

51

Q2 2020

17

Cushman &Wakefield Dallas/Fort Worth

Supply

upply

Under Construction Vacancies

nder Construction

A llen/McK inney

South Ft Worth

South Dallas

Pinnacle/Turnpike

North Ft Worth

A lliance

UNDER CONSTRUCTION VACANCIES UNDER CONSTRUCTION VACANCIES

Mesquite

Garland GSW

Far North/I -35

DFW A irport

Allen/McKinney Far North/I-35 Mesquite Pinnacle/Turnpike Redbird Walnut Hill/Stemmons

Alliance Garland N Stemmons/Valwood

GSW North Ft Worth South Ft Worth Richardson/Plano

South Dallas DFW Airport

18 Q2 2020

Industrial Insider Mid-Year Report

SUM OF AVAILABLE SPACE - Under Construction Vacancies

(VACANCY WITHIN RANGE)

Submarket

100,000-249,999 250,000-499,999 500,000-749,999 750,000+

Grand Total

Allen/McKinney

497,369

301,714

799,083

Alliance

387,872

1,774,082

2,117,639

2,361,947

6,641,540

DFW Airport

1,071,066

431,320

646,190

1,106,315

3,254,891

Far North/I-35

227,919

398,442

648,726

1,275,087

Garland

355,071

355,071

GSW

576,123

576,123

Mesquite

870,298

787,708

1,658,006

North Ft Worth

524,856

427,908

952,764

Pinnacle/Turnpike

392,220

392,220

South Dallas

317,875

298,168

616,043

South Ft Worth

816,662

1,337,034

2,153,696

Total

5,068,988

6,148,596

3,988,678

3,468,262

18,674,524

COUNT OF AVAILABLE SPACE - Under Construction Vacancies

(VACANCY WITHIN RANGE)

Submarket

100,000-249,999 250,000-499,999 500,000-749,999 750,000+

Grand Total

Allen/McKinney

4

1

5

Alliance

3

5

3

3

14

DFW Airport

7

1

1

1

10

Far North/I-35

2

1

1

4

Garland

2

2

GSW

1

1

Mesquite

6

2

8

North Ft Worth

3

1

4

Pinnacle/Turnpike

1

1

South Dallas

2

1

3

South Ft Worth

4

4

8

TA B L E O F CON T E N T S

Total

33

17

6

4

60

Q2 2020

19

Cushman &Wakefield Dallas/Fort Worth

DFW Overview: Demand

20 Q2 2020

Industrial Insider Mid-Year Report

Q2 2020

21

Demand

Cushman &Wakefield Dallas/Fort Worth

17,040,00 TOTAL SF OF ACTIVE REQU

Tenants in the Market

Demand REQUIREMENTS BY SIZE

Demand

ACTIVE REQUIREMENTS TOTALING 17,040,000 SF 8 1,000,000+ SF 17,040,000 TOTAL SF OF ACTIVE REQUIREMENTS 8 1,000,000+ SF 8 500,000 - 999,999 SF 10 250,000 - 499,999 SF

8 500,000 - 999,999 S

Tenants in the Market

REQUIREMENTS BY SIZE

ESTIMATED OCCUPANCY TIMELINE ESTIMA ED OCCUPANCY TIMELINE

REQUIREMENTS BY SUBMARKET (SF)

ESTIMATED OCCUPANCY TIMELINE

South Dallas

6,000,000

DFW Airport

Sout

6,000,000 6,000,000

5,000,000

Alliance

9,390,000

Mesquite

5,300,000

4,000,000

DFW

South Ft Worth

5,200,000

5,000,000 , ,

3,000,000

North Ft Worth

5,000,000

2,000,000

GSW

4,750,000

Pinnacle/Turnpike

4,500,000

1,000,000

M

4,000,000

Far North/I-35

1,500,000

0

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,00…

2020/Q3

2020/Q4

2021/Q1

2021/Q2

2021/Q3

2021/Q4

South F

ACTIVE TENANTS IN THE MARKET LIST

3,000,000

North F

Title

Minimum Requirement 

Maximum Requirement

Target Submarket (s)

Broker Firm

Industry

Est. Occupancy

Uline Confidential e-Commerce Confidential e-Commerce DSV Logistics Project Diamond

1,640,000 1,000,000 1,000,000 1,000,000 900,000

1,640,000 1,000,000 1,000,000 1,000,000 1,500,000 1,000,000 700,000 600,000 600,000

DFW Airport,Alliance DFW Airport,South Dallas North Ft Worth South Dallas Alliance,DFW Airport,Far North/I-35,South Dallas,South Ft Worth South Dallas South Dallas,Mesquite,Alliance Alliance,DFW Airport,South Dallas,South Ft Worth DFW Airport,GSW,Mesquite,North Ft Worth,Pinnacle/Turnpike,South Dallas,Alliance,South Ft Worth DFW Airport Alliance,DFW Airport,North Ft Worth,Pinnacle/Turnpike,South Dallas,South Ft Worth,GSW Alliance,DFW Airport Alliance,DFW Airport,GSW,Mesquite,North Ft Worth,Pinnacle/Turnpike,South Dallas,South Ft Worth

CBRE KBC KBC

2021/Q3 2021/Q1 2020/Q4 2021/Q1 2021/Q4 2021/Q3 2021/Q1 2021/Q2 2021/Q2

2,000,000 00

JLL JLL

Pinnacle/T

Project Ocho (KeHE Distributors) Bissell Undisclosed Bio Pappel

850,000 600,000 600,000 500,000

Colliers Gargaro & Associates Lee & Associates NAI

1,000,000 1 0 0

Far N

Manufacturing

0 Confidential e-Commerce Georgia Pacific

500,000 500,000

2020/Q4 500,000 1,000,000

KBC Colliers

E-Commerce

2021/Q4 2021/Q1 2021/Q4 2021

2020/Q3 / 3

2021/Q1 2021 Q1

2021/Q2 2021/Q2

2021/Q3 /

Project Swift Undisclosed

500,000 500,000

500,000 1,000,000

Cushman & Wakefield Colliers

2021/Q1 2021/Q4

HISTORICAL REQUIREMENTS (SF) ACTIVE TENANTS IN THE MARKET LIST HIS ORICAL REQUIREMENTS (SF)

Title

Minimum Requirement 

Maximum Requirement

Target Submarket (s)

25,000,000 25,000,000

Uline Confidential e-Commerce Confidential e-Commerce DSV Logistics Project Diamond 15,000,000 20,000,000 20,000,000 15,000,000

1,640,000 1,000,000 1,000,000 1,000,000 900,000

1,640,000 1,000,000 1,000,000 1,000,000 1,500,000 1,000,000 700,000 600,000 600,000 2018 2018

DFW Airport,Alliance DFW Airport,South Dallas North Ft Worth South Dallas Alliance,DFW Airport,Far North/I-35 Ft Worth South Dallas South Dallas,Mesquite,Alliance Alliance,DFW Airport,South Dallas, DFW Airport,GSW,Mesquite,North Worth,Pinnacle/Turnpike,South Dal Worth DFW Airport

10,000,000 10,000,000

Project Ocho (KeHE Distributors) Bissell Undisclosed Bio Pappel 2015 2015 22 Q2 2020

850,000 600,000 600,000 500,000

2016 2016

2017 2017

2019 2019

Year

YEAR

Confidential e-Commerce

500,000

500,000

Industrial Insider Mid-Year Report

REQUIREMENTS BY SIZE

Size (SF)

Requirements

17,040,000 F OF ACTIVE REQUIREMENTS

1,000,000 +

8

500,000 - 999,999

8

250,000 - 499,999

10

10 250,000 - 499,999 SF

8 500,000 - 999,999 SF

REQUIREMENTS BY SUBMARKET (SF)* REQUIREMENTS BY SUBMARKET (SF)

South Dallas SOUTH DALLAS

11,350,000

DFW Airport DFWAIRPORT

10,990,000

Alliance ALLIANCE

9,390,000 , , 0

Mesquite MESQUITE

5,300,000

5,3 , 0

South Ft Worth SOUTH FORTWORTH

5,200,000

5,2 , 0

North Ft Worth NORTH FTWORTH

5,000,000 5, 0, 0

4,750,000 4,750, 0

GSW

Pinnacle/Turnpike PINNACLE/TURNPIKE

4,500,000 4,5 0, 0

Far North/I-35

1,500,000 15

FAR NORTH/

0

2,000,000 2, 0,0 0

4,000,000

6,000,000

8,000,000

10,000,000 1 , ,

12,00… 2,0 ,000

21/Q4

*Requirements looking market wide will be included in multiple markets

get Submarket (s)

Broker Firm

Industry

Est. Occupancy

W Airport,Alliance W Airport,South Dallas h Ft Worth h Dallas nce,DFW Airport,Far North/I-35,South Dallas,South

CBRE KBC KBC

2021/Q3 2021/Q1 2020/Q4 2021/Q1 2021/Q4

Q2 2020

23

JLL JLL

Cushman &Wakefield Dallas/Fort Worth

DEPTH OF TENANTS | ABSORPTION BY SIZE RANGE DEPTH OF TENANTS | ABSORPTION BY SIZE RANGE

YTD 2020 T 2020

TOTAL SF

NUMBER OF TENANTS

20

19

18

3.0 MSF

16

14

5.5 MSF

12

10

10

8

6

5

3.5 MSF

4

NUMBER OF TENANTS

2

1.3 MSF

2

0

100K - 249K SF 250K - 499K SF 500K - 749K SF 750K SF+

100K - 249K SF 250K - 499K SF 500K - 749K SF 750K SF+

FY 2019 + YTD 2020 TOTAL SF 1 T 2020

NUMBER OF TENANTS

100

86

90

80

13.7 MSF

13.8 MSF

70

60

50

40

31

30

20

NUMBER OF TENANTS

13

7.5 MSF

12

10.9 MSF

10

0

100K - 249K SF 250K - 499K SF 500K - 749K SF 750K SF+

100K - 249K SF 250K - 499K SF 500K - 749K SF 750K SF+

NOTE: The data in these charts represent positive absorption only (move-outs are excluded)

YTD 2020 - MAJOR SUBMARKETS J R SUBMARKETS 20 –

Alliance

DFWAirport

GSW

South Dallas

# OF TENANTS TOTAL SF

# OF TENANTS TOTAL SF

# OF TENANTS TOTAL SF

# OF TENANTS TOTAL SF

100K - 249K SF 250K - 499K SF 500K - 749K SF 750K SF +

0

0

2

272,212

3

380,475

3

502,780

1 0 1

400,000

0 0 1

0 0 1,000,584

1 0 1

322,824 0 1,500,000

1 1 1

450,000 610,806 1,044,647

0 783,465

24 Q2 2020

Industrial Insider Mid-Year Report

YTD BIG DEALS LIST | DFW INDUSTRIAL

13DEALS

500k+SF

AT MID-YEAR 2020

TENANT NAME

SIZE (SF)

DEAL TYPE

Amazon (Forney - FTW5)

1,077,416

BTS

Ariat International

1,069,818

First Gen Spec Lease

Amazon

1,000,584

First Gen Spec Lease

General Mills

860,100

Renewal

FedEx

776,630

First Gen Spec Lease

Kraft-Heinz

731,548

Renewal

Ball Corporation

678,568

BTS

Wesco Aircraft Holdings

658,782

Expansion

NFI

653,582

Renewal

Geodis

616,875

Renewal

Mars Petcare

610,806

First Gen Spec Lease

Tempur Sealy

585,910

First Gen Spec Lease

HD Supply

525,641

Renewal

TA B L E O F CON T E N T S

Q2 2020

25

Cushman &Wakefield Dallas/Fort Worth

Submarket Snapshots

26 Q2 2020

Industrial Insider Mid-Year Report

Q2 2020

27

Cushman &Wakefield Dallas/Fort Worth

Allen/ McKinney

28 Q2 2020

Industrial Insider Mid-Year Report

Q2 2020

29

Cushman &Wakefield Dallas/Fort Worth

Allen/McKinney

OBSERVATIONS & TRENDS

75

• Located on the northeastern most edge of the DFW market surrounded by heavy residential population • Most new supply to this submarket comes from shallow bay and single load product • Proximity to residential rooftops has motivated planning and ground breaking of several new speculative developments – Amazon signed a 201k sf build-to-suit deal with Stonemont Financial Group for a delivery facility on the SEC of Industrial Boulevard and Airport Boulevard in McKinney. – Core5 Industrial Partners and TCD have poured slabs on SELECT MARKET ACTIVITY & NEW DEVELOPMENTS:

380

ALLEN/MCKINNEY

ALLEN

75

MURPHY

RICHARDSON

75

30

30 – ML Realty’s McKinney Trade Center is set to deliver in Q3. The three-building speculative project located at the NWC of N McDonald Street & Wilmeth Road consists of a 106k sf cross-dock, a 112k sf rear-load and a 96k sf rear-load. – HLC Investments has plans to break ground on McKinney Logistics Center, a 193k sf speculative cross-dock located at 2161 Redbud Boulevard in McKinney. 80 the first phase of Core5 McKinney Logistics Center, two speculative rear-load buildings (302k & 130k sf). The 65-acre project is located on the west side of N McDonald Street, just south of Bloomdale Road. Future phases for the project consist of an additional 1 msf of product.

635

2

AND K

LLAS

FORNEY

MARKET SUMMARY 12

45

175

20

BALCH SPRINGS

20

2012 2013 2014 2015 2016 2017 2018 2019 YTD 2020

HUTCHINS

175

9.3

9.3

9.4

9.4

9.9

10.0

10.5

10.8

10.8

Inventory (MSF)

45

Overall Net Absorption (MSF) WILMER

32,900 194,810 499,072 338,526 470,371 106,799 147,478 276,867 73,234

LANCASTER

15.8% 13.8% 8.0% 3.1% 2.3% 3.4% 6.5% 7.4% 6.2%

Overall Vacancy

0

66,000 117,261

0

423,927 198,000 455,722 250,454

0

Completions (MSF)

Under Construction (MSF)

66,000 117,261

0

291,620 108,000 140,000 30,954 919,165 919,165

30 Q2 2020

Industrial Insider Mid-Year Report

VACANCY

Historical Average = 7.4%

HISTORICAL AVERAGE = 7.4%

18.0%

16.0%

14.0%

12.0%

10.0%

8.0%

6.0%

4.0%

2.0%

0.0%

2012

2013

2014

2015

2016

2017

2018

2019 YTD 2020

OVERALL VACANCY RATE

HISTORICAL AVERAGE

NET ABSORPTIONS / COMPLETIONS

NET ABSORPTION / COMPLETIONS

0.6

0.5

0.4

0.3

Millions

0.2

0.1

0.0

2012

2013

2014

2015

2016

2017

2018

2019 YTD 2020

OVERALL NET ABSORPTION COMPLETIONS

TA B L E O F CON T E N T S

Q2 2020

31

Cushman &Wakefield Dallas/Fort Worth

Alliance

32 Q2 2020

Industrial Insider Mid-Year Report

Q2 2020

33

Cushman &Wakefield Dallas/Fort Worth

Alliance

The Alliance submarket is situated along I-35W on the northwest edge of DFW. The submarket benefits from Alliance’s Global Logistics Hub, which includes the BNSF Railway Intermodal Terminal, Alliance Airport, and UPS and FedEx hubs. While Alliance has traditionally been a finite submarket mostly controlled by Hillwood, other developers and institutional investors have entered the area. There are about 15 other developers that have either begun developing or acquired developable land sites in Alliance. This marks the evolution of the submarket from one that has traditionally been tightly controlled with high barriers of entry, DENTON 35

to one with a more diverse investment landscape. It has also brought efficiency to the leasing market as tenants enjoy options to lease product controlled by a variety of owners. Alliance delivered 5.2 MSF during the first two quarters of 2020, compared to 3.6 MSF of completions during the full year of 2019. Alliance currently accounts for 32% of the greater DFW market’s new development pipeline with 7.5 MSF of inventory under construction. The activity from a supply standpoint is being met by solid demand with 1.4 MSF of YTD net absorption and 2.9 MSF of new leasing activity, compared to 3.5 MSF of new leasing activity for the full year of 2019. 380

ALLIANCE DELIVERED 5.2 MSF DURING THE FIRST TWO QUARTERS OF 2020, COMPARED TO 3.6 MSF OF COMPLETIONS FOR THE FULL YEAR OF 2019.

75

380

35E

LITTLE ELM

CORINTH

35W

FRISCO

OBSERVATIONS & TRENDS

ALLEN

HIGHLAND VILLAGE

75

• The Alliance submarket leads the greater DFW industrial market in construction activity with 7.5 MSF of new product under construction, 94% (7 MSF) of which is speculative • The submarket’s 2.9 MSF of mid-year leasing activity is second only to DFW Airport, with over 65% of new leases signed occurring in first-gen spec product • The Alliance submarket delivered 5.2 MSF of new supply during the first two quarters, 100% of which is speculative • Alliance construction completions are expected to reach, if not surpass, nearly 10 MSF by year-end, more new inventory for the submarket than the last three years combined RICHARDSON PLANO IRVING FARMERS BRANCH HIGHLAND PARK ADDISON CARROLLTON 635 635 635 35E 35E 35E 12 114 114 183 121 12 75 75

FLOWER MOUND

114

MU

ROANOKE

114

SOUTHLAKE

35W

121

GRAPEVINE

287

ALLIANCE

KELLER

NORTH RICHLAND HILLS

360

COLLEYVILLE

121

BEDFORD

SAGINAW

EULESS

30

183

HALTOM CITY

820

820

35W

DALLAS

34 Q2 2020

121

360

30

30

WHITE TTLEMENT

GRAND PRAIRIE

ARLINGTON

Industrial Insider Mid-Year Report

OVERALL NET ABSORPTION UNDER CONSTRUCTION 1.4MSF 14.8% 5.2MSF 7.5MSF OVERALL VACANCY COMPLETIONS

MARKET SUMMARY

2012 2013 2014 2015 2016 2017 2018 2019 YTD 2020

26.8

28.0

30.7

33.7

35.6

37.3

41.8

46.3

51.5

Inventory (MSF)

Overall Net Absorption (MSF)

1.4

1.4

1.4

1.3

2.5

4.0

1.6

5.1

1.4

8.9% 7.5% 11.2% 15.1% 12.4% 6.0% 9.7% 6.4% 14.8%

Overall Vacancy

0

1.1

2.7

3.0

1.8

1.7

4.0

4.0

5.2

Completions (MSF)

48,726

3.8

2.8

1.2

1.7

2.7

2.5

9.8

7.5

Under Construction (MSF)

VACANCY

NET ABSORPTIONS/COMPLETIONS

HISTORICAL AVERAGE = 9.5%

Historical Average = 9.5%

NET ABSORPTION / COMPLETIONS

16.0%

6.0

14.0%

5.0

12.0%

4.0

10.0%

8.0%

3.0

Millions

6.0%

2.0

4.0%

1.0

2.0%

0.0%

0.0

2012

2013

2014

2015

2016

2017

2018

2019 YTD 2020

2012

2013

2014

2015

2016

2017

2018

2019 YTD 2020

OVERALL VACANCY RATE

HISTORICAL AVERAGE

OVERALL NET ABSORPTION COMPLETIONS

Q2 2020

35

Cushman &Wakefield Dallas/Fort Worth

Alliance

SELECT LEASING ACTIVITY

100K SF+ | 2019

Tenant

Building

Location

SF Leased

Ariat International

Intermodal Logistics Center, Bldg 2

18314 FM 156, Fort Worth

1,069,818

General Mills*

Alliance Gateway 51

4901 Henrietta Creek Rd, Fort Worth

860,100

Kraft-Heinz*

Kraft-Heinz at Westport Alliance

1005 & 1006 Railhead Dr, Fort Worth

731,548

NFI*

Alliance Gateway 72

4798-4800 Henrietta Creek Rd, Fort Worth 472,500

Allen Distribution

4801 Westport Pky

4801 Westport Pky, Fort Worth

400,000

AmerCareRoyal

Speedway Logistics Crossing, Bldg 2

FM 156 & Petty Pl, Fort Worth

390,000

Wesco Aircraft Holdings (expansion)

Northport 35, Bldg A

4250 Dale Earnhardt Way, Northlake

349,425

Wabtec

Speedway Logistics Crossing, Bldg 1

2660 Petty Pl, Fort Worth

265,000

Mondelez Global

Speedway Distribution Center, Bldg C

16200 Three Wide Dr, Fort Worth

149,802

Boxout / WBC Group TCC 35 Eagle, Bldg H

15277 Heritage Pky, Fort Worth

91,376

Crown Equipment Corporation

Alliance Northport 5

4100 E Sam Lee Ln, Northlake

84,795

*Renewal

NEW DEVELOPMENTS Completed - First Generation Vacancies (100K SF+)

Building

Developer/Owner

RBA SF Available

TCC 35 Eagle, Bldg A

Trammell Crow/PGIM

1,089,642

1,089,642

Alliance Westport 11

Hillwood

1,002,536

1,002,536

Sunset Trade Center, Bldg 2

PLR/CT Realty (forward to Clarion)

677,429

677,429

Northwest Commerce Park, Bldg 1

Stream/Morgan Stanley

473,894

473,894

Northwest Commerce Park, Bldg 3

Stream/Morgan Stanley

351,194

351,194

Northwest Commerce Park, Bldg 2

Stream/Morgan Stanley

266,152

266,152

Alliance Northport 4

Hillwood

225,472

225,472

Sunset Trade Center, Bldg 1

PLR/CT Realty (forward to Clarion)

205,136

205,136

Speedway Distribution Center, Bldg C

IDI Logistics

316,128

166,326

Speedway Logistics Crossing, Bldg 1

Scannell

408,240

143,240

TCC 35 Eagle, Bldg H

Trammell Crow/PGIM

312,733

143,085

Alliance Northport 5

Hillwood

225,930

141,139

36 Q2 2020

Industrial Insider Mid-Year Report

Under Construction - Availabilities (100K SF+)

Building

Developer/Owner

RBA

SF Available

Alliance Center North 7

Hillwood

810,908

810,908

Speedway Logistics Crossing, Bldg 3

Scannell

795,780

795,780

NorthLink A

Hines

754,313

754,313

Synergy Crossing, Bldg 400

Ironwood/TCRG Properties

708,047

708,047

Intermodal Logistics Center, Bldg 3

NorthPoint Development

707,592

707,592

Elizabeth Creek Gateway, Bldg D

DHL Real Estate

702,000

702,000

Alliance Northport 2

Hillwood

460,248

460,248

Elizabeth Creek Gateway, Bldg E

DHL Real Estate

403,000

403,000

Synergy Crossing, Bldg 300

Ironwood/TCRG Properties

390,440

390,440

NorthLink B

Hines

263,200

263,200

North Quarter 35, Bldg 2

M2G Ventures/Nuveen

257,117

257,117

North Quarter 35, Bldg 3

M2G Ventures/Nuveen

159,659

159,659

North Quarter 35, Bldg 1

M2G Ventures/Nuveen

119,665

119,665

North Quarter 35, Bldg 4

M2G Ventures/Nuveen

108,548

108,548

Planned Speculative (100K SF+)

Building

Developer/Owner

RBA

SF Available

Gruene Real Estate Partners/ Weber & Co

Intermodal Commerce Park, Bldg 1

671,034

671,034

114 Distribution Center

Miramar/Provident

568,858

568,858

Gruene Real Estate Partners/ Weber & Co Gruene Real Estate Partners/ Weber & Co

Intermodal Commerce Park, Bldg 2

449,796

449,796

Intermodal Commerce Park, Bldg 3

283,860

283,860

FORECAST The construction pipeline for Alliance will remain active through the rest of the year and likely into 2021. An increase in vacancy for Alliance is almost guaranteed as a result of the current construction pipeline. Longer term, the area should return to equilibrium as the majority of good developable sites are now under developer control, and a disciplined approach to future development is expected.

TA B L E O F CON T E N T S

Q2 2020

37

Cushman &Wakefield Dallas/Fort Worth

Brookhollow/ Trinity

38 Q2 2020

Industrial Insider Mid-Year Report

Q2 2020

39

H

FRISCO

Cushman &Wakefield Dallas/Fort Worth

ALLEN

HLAND LAGE

75

PLANO

Brookhollow/Trinity 121

35E

MURPHY

ADDISON

OBSERVATIONS & TRENDS

RICHARDSON

CARROLLTON

35E

121

75

E

• Most of the Brookhollow/Trinity’s building stock was built several cycles ago and struggles to meet modern day supply chain and distribution demands • Demand in this submarket is driven by companies with smaller operations and/or local, last mile fulfillment and distribution • The majority of the submarket’s tenant base occupies smaller spaces, ranging from 10K SF to 50K SF • This infill submarket is primarily built-out and new supply isn’t likely until vacancy increases and developers can make sense of redeveloping old product 30 30 80

635

FARMERS BRANCH

114

635

635

114

12

12

HIGHLAND PARK

35E

183

BROOKHOLLOW/ TRINITY

IRVING

75

DALLAS

30

GRAND PRAIRIE

12

35E

FORNEY

45

12

175

SELECT MARKET ACTIVITY & NEW DEVELOPMENTS: 20

BALCH SPRINGS

12

20

– LINK plans to break ground next quarter on a speculative basis on Building 3 at Cornerstone Crossing. The new development is a 109k sf front-load building at 9749 Clifford Drive in Dallas. 175

20

HUTCHINS

67

35E

DUNCANVILLE

45

DESOTO

LANCASTER

WILMER

MARKET SUMMARY 35E 67

2012 2013 2014 2015 2016 2017 2018 2019 YTD 2020

47.9

47.9

48.3

48.3

48.3

48.3

48.8

49.1

49.1

Inventory (MSF)

Overall Net Absorption (MSF)

137,953 245,991

1.2

572,730 532,986 64,042 20,578 (349,467) 254,564

7.0% 6.6% 4.7% 3.5% 2.4% 2.2% 2.1% 2.8% 2.3%

Overall Vacancy

0

34,400 353,161

0

0

0

0

0

0

Completions (MSF)

Under Construction (MSF)

139,561 185,161

0

0

0

0

0

0

0

40 Q2 2020

Industrial Insider Mid-Year Report

VACANCY

Historical Average = 3.9%

8.0%

HISTORICAL AVERAGE = 3.9%

7.0%

6.0%

5.0%

4.0%

3.0%

2.0%

1.0%

0.0%

2012

2013

2014

2015

2016

2017

2018

2019 YTD 2020

OVERALL VACANCY RATE

HISTORICAL AVERAGE

NET ABSORPTIONS/COMPLETIONS

NET ABSORPTION / COMPLETIONS

1.4

1.2

1.0

0.8

0.6

0.4 Millions

0.2

0.0

2012

2013

2014

2015

2016

2017

2018

2019 YTD 2020

(0.2)

(0.4)

(0.6)

OVERALL NET ABSORPTION COMPLETIONS

TA B L E O F CON T E N T S

Q2 2020

41

Cushman &Wakefield Dallas/Fort Worth

DFW Airport

42 Q2 2020

Industrial Insider Mid-Year Report

Q2 2020

43

Cushman &Wakefield Dallas/Fort Worth

DFW Airport

The DFW Airport industrial submarket has a central location with excellent access to several major transportation arteries, an abundant supply of labor and multiple area amenities. The area consistently enjoys high tenant demand and investor interest for warehouse/distribution space. The submarket’s inventory stock is composed of both fee simple ownership and DFW Airport ground leased developments. Historically, demand has kept up with new supply and the DFW Airport 380

submarket has played a leading role in absorption for the overall DFW market. The submarket’s lack of developable infill sites along with strong leasing velocity on the northern side of the airport motivated DFW Airport to open the southern end for ground leased development in 2018. Developers have aggressively taken advantage of this opportunity, breaking ground on nearly 11 MSF since, 86% of which has been speculative product. 75

FOUR OF THE TOP FIVE DEALS SIGNED IN THE SUBMARKET YEAR-TO- DATE HAVE BEEN IN FIRST- GEN SPEC PRODUCT – AMAZON (1 MSF), TEMPUR SEALY (585K SF), AMERIPAC (401K SF), & BRIGHTSTAR (275K SF). DENTON 35E

35

LITTLE ELM

380

CORINTH

35W

FRISCO

ALLEN OBSERVATIONS & TRENDS

HIGHLAND VILLAGE

75

PLANO

MURPHY • DFW Airport led the greater DFW industrial market in leasing activity during the first two quarters with 3.9 MSF of new leasing transactions, 2.7 MSF (72%) of which are expected to occupy/absorb before year-end. • Of the 4.8 MSF currently under construction in the submarket, 4.5 MSF (93%) is speculative product and 100% of the 2.1 MSF of YTD completions is speculative product • Consistently high tenant demand in the submarket continues to fuel increased construction activity, the submarket absorbing over 20 MSF since 2015 • Southern DFW Airport ground leased product accounts for 83% (4 MSF) of the submarket’s current construction activity RICHARDSON HIGHLAND PARK 30 30 635 12 75 75

35E

121

FLOWER MOUND

KE

114

ADDISON

SOUTHLAKE

CARROLLTON

35E

121

GRAPEVINE

635

FARMERS BRANCH

DFW AIRPORT

114

635

RTH HLAND LLS

360

COLLEYVILLE

114

121

12

BEDFORD

EULESS

35E

183

183

M

IRVING

820

DALLAS

80

360

30

30

GRAND PRAIRIE

ARLINGTON

12

35E

FORNEY

45

12

175

44 Q2 2020

20

BALCH SPRINGS

12

20

20

20

HUTCHINS

67

35E

175

Industrial Insider Mid-Year Report

OVERALL NET ABSORPTION 1.3MSF 7.7% 2.1 MSF 4.9MSF OVERALL VACANCY

COMPLETIONS

UNDER CONSTRUCTION

MARKET SUMMARY

2012 2013 2014 2015 2016 2017 2018 2019 YTD 2020

63.0

65.7

70.4

74.0

76.1

79.3

83.1

87.1

89.2

Inventory (MSF)

Overall Net Absorption (MSF)

2.4

4.5

2.4

3.2

4.6

3.2

2.8

6.0

1.3

9.9% 6.8% 9.5% 9.7% 6.1% 5.8% 8.4% 6.1% 7.7%

Overall Vacancy

85,500

2.7

4.6

3.7

2.1

3.2

3.8

4.2

2.1

Completions (MSF)

Under Construction (MSF)

1.1

4.5

3.6

2.3

3.7

1.6

3.8

5.2

4.9

COMPLETIONS / NET ABSORPTIONS

VACANCY

HISTORICAL AVERAGE = 7.7%

NET ABSORPTION / COMPLETIONS

Historical Average = 7.7%

12.0%

7.0

6.0

10.0%

5.0

8.0%

4.0

6.0%

Millions

3.0

4.0%

2.0

2.0%

1.0

0.0%

0.0

2012

2013

2014

2015

2016

2017

2018

2019 YTD 2020

2012

2013

2014

2015

2016

2017

2018

2019 YTD 2020

OVERALL VACANCY RATE

HISTORICAL AVERAGE

OVERALL NET ABSORPTION COMPLETIONS

Q2 2020

45

Cushman &Wakefield Dallas/Fort Worth

DFW Airport

100K SF+ | 2019 SELECT LEASING ACTIVITY Tenant Building

Location

SF Leased 1,000,584

Amazon

DFW Commerce Center, Bldg 1

2601 S Airfield Dr, Irving

Tempur Sealy

TCC Passport Park, Bldg 2

2650 Rental Car Dr, Irving

585,910

HD Supply*

Lakeside Ranch 550

550 Lakeside Pky

525,641

Amazon*

DFW Trade Center I

2700 Regent Blvd, Irving

428,300

AmeriPac

Prologis Mustang Park, Bldg 1

951 Mustang Dr, Grapevine

401,280

Union Supply

Airport Distribution Center

2500 Regent Blvd, Irving

313,723

Brightstar

Lakeside Ranch 350

350 Lakeside Pky, Flower Mound

274,994

Legendz Way Distribution Gateway Logistics Center, Bldg 5

2600 Market St, Irving

267,575

Sewell

DFW Distribution Center

1717 W Airfield Dr, Grapevine

252,400

Teltech Communication DFW North IV

1901 Lakeside Pky, Flower Mound

198,854

Maxxis Tire*

DFW Trade Center, Bldg I

4251 Highway 121, Grapevine

185,825

CTDI

Lakeside Ranch 1001

1001 Lakeside Pky, Flower Mound

185,344

GE Aviation / CFM Materials

DFW Airfield Logistics Center, Bldgs 1 & 2

3001-3051 W Airfield Dr, Euless

180,417

Hart & Cooley*

AmberPoint 4

200 Northpoint Dr, Coppell

152,274

KyotoCooling

Park West Commerce Center II

204 Airline Dr, Coppell

147,143

Norwex*

Freeport XIV

800 W Bethel Rd, Coppell

143,000

Schneider*

620 Westport Pky

620 Westport Pky, Grapevine

104,490

Furniture of America

Gateway Logistics Center, Bldg 4

2601 W Airport Fwy, Irving

101,149

Arizona Tile*

International Commerce Park, Bldg 1

2701 Regent Blvd

100,398

Hussman

Gateway Logistics Center, Bldg 4

2601 W Airport Fwy, Irving

87,328

*Renewal

NEW DEVELOPMENTS Completed - First Generation Vacancies (100K SF+)

Building

Developer/Owner

RBA SF Available

Passport Logistics Park, Bldg 200

Dalfen Industrial

494,385

494,385

Passport Logistics Park, Bldg 300

Dalfen Industrial

494,385

494,385

Gateway Logistics Center, Bldg 3

Bandera Ventures/Long Warf

375,400

375,400

Passport Logistics Park, Bldg 100

Dalfen Industrial

242,516

242,516

Prologis Park 121, Bldg 2

Prologis

142,080

142,080

Valley View DFW Airport

Alpha Industrial Properties

294,795

105,255

Southlake Business Park, Bldg 3

Frontier Equity/Rialto

103,135

103,135

Prologis Park 121, Bldg 1

Prologis

98,381

98,381

DFW Airfield Logistics Center, Bldg 2

Seefried/Clarion

210,640

98,300

46 Q2 2020