Industrial Mid-Year Report Q2 2020

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