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Research & Forecast Report

DALLAS-FORT WORTH | INDUSTRIALQ2 2018

Market IndicatorsRelative to prior period

AnnualChange

Quarterly Change

Quarterly Forecast*

Vacancy

Net Absorption

Under Construction

*Projected

Warehouse / Distribution Industrial

Summary Statistics DFW Industrial Market

Big-Box Non Big-Box Combined Flex MFG

Vacancy Rate 10.1% 4.4% 6.5% 6.5% 2.8%

Quarterly Change 0.1% 0.1% 0.1% 0.2% -0.2%

Absorption YTD(Thousands Square Feet) 1,613 360 1,972 -38 356

New Supply YTD(Thousands Square Feet) 1,967 610 2,577 179 161

Under Construction(Thousands Square Feet) 13,700 7,656 21,356 1,214 1,448

Asking Rents Per Square Foot Per Year

Average Quoted (NNN) $ 3.84 $ 5.20 $ 4.47 $ 9.84 $ 4.36


Year-Over-Year Change 0.5% 6.3% 0.7% 0.9% 1.8%

Demand bounces back after slow start to 2018MIKE OTILLIO Director of ResearchKARI BEETS Business Development and Content StrategistAfter a slow first quarter, the Dallas-Fort Worth industrial market proved that Q1 2018 was just a blip, and activity and demand is still strong. Halfway through the year, the market posted 7.9 million square feet of absorption, and while this is 17% behind half-year 2017, fewer deliveries in the first two quarters could account for the slowdown, as much of DFW activity is driven by construction that is occupied upon delivery.

As is typical of the DFW market, Big-Box product accounted for almost 90% of net absorption in Q2. Great Southwest was the standout this quarter, with 2.6 million of the 4.5 million square foot Big-Box absorption total. This established submarket is in high-demand because it is central to the metroplex and the labor pool. Large move-ins to the submarket included Haier occupying 832,000 square feet in Wildlife Commerce Park and FedEx occupying 365,000 square feet at Liberty Park GSW.

South Dallas, which has had 2.3 million square feet of deliveries this year has absorbed less than half this total; however, activity should pick up in in the next two quarters as several large leases have been signed and five build-to-suits are underway and set to deliver later this year.

Smaller product, Non Big-Box warehouse, posted an unusually weak quarter in Q2, with nine of fourteen submarkets posting negative absorption for a market total of negative 75,000 square feet. The North I-35E Corridor had the largest amount of negative net absorption with 333,000. While smaller tenants may feel economic slowdowns faster than Big-Box occupiers, market-wide negative absorption may just be a blip of several large move-outs all hitting in the same quarter.

OutlookWith 28 million square feet in the pipeline expected to deliver in 2018, of which 9.5 million square feet is build-to-suit, activity in the DFW market is still healthy. Absorption activity will pick up in Q3, but vacancy improvement will be tempered by numerous tenants who are eschewing spec buildings for built-to-suits.

Because consumer spending is still strong, industrial demand has largely ignored macroeconomic geopolitical concerns. Retailers are still optimistic in adding ecommerce facilities; however, many have expanded in other markets such as Atlanta and the Lehigh Valley rather than in DFW.

Colliers Research segments industrial product into three categories: Warehouse/Distribution (which is comprised of Big-Box and Non Big- Box Industrial), Manufacturing, and Flex. The All Industrial summary is comprised of Warehouse/Distribution, Manufacturing, and Flex.

2 Dallas-Fort Worth Research & Forecast Report | Q2 2018 | Industrial | Colliers International

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Market Trends & Stats

NEW SUPPLY ABSORPTION VACANCY



WAREHOUSE / DISTRIBUTION (BIG-BOX)

WAREHOUSE / DISTRIBUTION (NON BIG-BOX)

WAREHOUSE / DISTRIBUTION (BIG-BOX & NON BIG-BOX)

> Non Big-Box Warehouse product posted negative 329,000 square feet of net absorption in Q2, as negative 500,000 square feet of sublet move-outs counteracted 173,000 square feet in direct net absorption. Nine of fourteen markets posted negative net absorption totals this quarter. The half-year total of 332,000 square feet is 23% of last year’s half-year mark.

> The vacancy rate for Non Big-Box product increased 0.2% to 4.6% in Q2, but remains significantly lower than the average vacancy rate over the last 5 years (5.2%). Northeast Dallas has a significant amount of sublease vacancy at 2% of the submarket. The West I-30 Corridor’s vacancy remains the highest Non Big-Box vacancy rate at 9.2%.

> Asking rental Rates for Non Big-Box product continue to increase, rising 1.5% from the prior quarter to $5.29 NNN. Rates have increased 7.1% from Q2 2017 when rates averaged $4.94 NNN.

> Vacancy for warehouse/distribution product was relatively flat quarter-to-quarter, decreasing by only 300,000 square feet to 6.2%. Year-over-year vacancy is down 0.4% and is expected to continue downward for the next several quarters. South Dallas, the submarket with the highest vacancy rate, increased 0.9% to 15.7%, and the North I-35E Corridor remains the tightest warehouse market in the metro at 2.7%.

> Net absorption for Q2 2018 was 4.2 million square feet, up significantly from Q1’s slow absorption total. For the first half of the year, net absorption is almost 2 million square feet shy of the total through Q2 2017. Deliveries continued to be slow in Q2, with only 16 properties totaling 4 million square feet delivered.

> Great Southwest had the highest absorption total by far at 2.5 million square feet – over four times the amount of the second-highest market South Dallas that had 558,000 square feet of warehouse net absorption.

> Big-Box deliveries picked up in Q2, after an unusually slow Q1. Seven properties totaling 3.5 million square feet were delivered, almost double last quarter’s total. Pre-leasing activity is still healthy, as delivered properties were 60% leased as of the end of the quarter.

> Vacancy declined 0.6% from the previous quarter and is down 1% from the prior year. Sublet space on the market continues to be high, at 1.5 million square feet. Expect vacancy to continue its downward trend for the rest of the year, as e-commerce demand is strong and deliveries this year are expected to total 15 million square feet, almost 6 million square feet less than 2017.

> Average asking rates for Big-Box product were flat quarter-to-quarter and year-over-year at $3.83, showing the overall market is achieving balance between supply and demand.

3 Dallas-Fort Worth Research & Forecast Report | Q2 2018 | Industrial | Colliers International3

Dallas-Fort Worth Industrial Market SummaryRENT

Colliers Market Bldgs

Total

Inventory

SF

Direct

Vacancy

Rate

Sublease

Vacancy

Rate

Total

Vacant

SF

Vacancy

Rate

Current

Vacancy

Rate

Prior Qtr

Net Abs

Current Qtr

SF

Net Abs

YTD

SF

New

Supply

YTD SF

Under

Construction

SF

Average

Rate

(NNN)

Warehouse/Distribution: Big-Box ONLY

96.3087,207,2005,305128,763,1172,367%0.7%4.4518,613,1%0.0%4.4348,206,9255ecnaillA $

DFW Airport 79 33,186,380 3.1% 0.8% 1,303,765 3.9% 3.7% (76,228) (150,640) 294,795 3,504,408 3.88$

East Dallas 17 6,995,656 12.2% 0.0% 852,969 12.2% 12.2% 0 (419,626) 0 2,177,930 3.40$

Far North I-35E Corridor 60 23,702,531 1.5% 0.0% 348,594 1.5% 3.3% 424,147 811,077 0 1,176,380 4.49$

Great Southwest 91 35,647,961 9.3% 2.5% 4,210,537 11.8% 16.4% 2,620,844 3,305,045 1,197,000 1,167,869 4.31$

Metropolitan / Addison 2 511,459 0.0% 0.0% 0 0.0% 0.0% 0 0 0 0 N/A

North Fort Worth 23 10,859,091 6.0% 0.0% 655,791 6.0% 2.8% 0 318,914 362,670 1,323,485 4.05$

North I-35E Corridor 1 233,000 0.0% 0.0% 0 0.0% 0.0% 0 0 0 0 N/A

North US 75 Corridor 7 3,207,764 0.0% 0.0% 0 0.0% 0.0% 0 0 0 202,270 N/A

Northeast Dallas 24 8,112,945 10.9% 0.0% 883,522 10.9% 10.7% (16,800) 9,060 0 1,414,400 4.04$

South Dallas 86 45,104,632 20.4% 0.1% 9,271,325 20.6% 19.7% 702,741 924,383 2,281,610 6,186,263 3.57$

South Fort Worth 18 6,184,407 11.0% 0.0% 682,407 11.0% 9.0% 134,742 442,568 287,261 217,537 N/A

West I-30 Corridor 36 15,346,458 5.4% 2.1% 1,159,458 7.6% 5.4% (22,158) (256,257) 322,215 0 3.20$

Outlying Metroplex 10 8,626,457 0.0% 0.0% 0 0.0% 0.0% 0 0 0 1,199,100 N/ATotal DFW Market 509 227,321,584 8.4% 0.7% 20,685,183 9.1% 9.7% 4,530,559 6,352,345 5,249,051 21,272,422 3.83$

Warehouse/Distribution: NON Big-Box

62.6005,61000,022460,202)050,71(%0.1%2.1526,98%0.0%2.1913,912,7721ecnaillA $

DFW Airport 395 29,799,859 6.2% 0.7% 2,073,638 7.0% 7.9% 288,832 242,438 0 701,024 5.47$

East Dallas 434 18,683,148 2.6% 0.1% 505,530 2.7% 2.8% 9,824 75,675 0 262,800 5.39$

Far North I-35E Corridor 691 47,467,760 3.5% 0.5% 1,877,563 4.0% 4.0% 336,882 (117,307) 354,744 407,329 5.08$

Great Southwest 984 58,496,517 4.1% 0.3% 2,580,039 4.4% 4.3% (84,342) 194,744 0 172,120 4.59$

Metropolitan / Addison 200 10,580,996 5.0% 0.3% 564,054 5.3% 3.1% (235,189) (185,259) 0 0 4.74$

North Fort Worth 336 19,843,705 3.4% 0.3% 745,001 3.7% 4.4% 140,275 421,952 10,000 84,000 5.41$

North I-35E Corridor 1,552 55,584,639 2.4% 0.3% 1,513,709 2.7% 2.1% (332,812) (422,586) 0 0 6.55$

North US 75 Corridor 358 18,351,053 3.7% 0.4% 738,685 4.0% 3.6% (76,176) (16,072) 11,400 350,084 6.65$

Northeast Dallas 504 26,799,146 3.5% 2.1% 1,488,188 5.6% 5.2% (66,478) 385,400 0 40,000 4.44$

South Dallas 386 22,236,081 5.3% 0.6% 1,342,042 6.0% 5.3% (144,489) (296,183) 0 345,320 5.00$

South Fort Worth 1,089 39,028,563 4.8% 0.1% 1,905,564 4.9% 4.7% (59,553) (379,596) 48,364 263,939 5.60$

West I-30 Corridor 253 12,846,275 9.1% 0.1% 1,185,871 9.2% 8.1% (146,211) 77,629 565,918 0 4.27$

Outlying Metroplex 572 20,592,379 3.2% 1.1% 903,977 4.4% 5.7% 311,768 403,211 50,000 392,187 5.42$ Total DFW Market 7,880 388,629,440 4.1% 0.5% 17,513,486 4.6% 4.4% (74,719) 586,110 1,260,426 3,035,303 5.29$

Warehouse/Distribution: Big-Box & NON Big-Box

98.3082,917,2005,327588,965,1122,647%8.5%8.3044,604,1%0.0%8.3261,228,63281ecnaillA $

DFW Airport 474 62,986,239 4.6% 0.8% 3,377,403 5.4% 5.7% 212,604 91,798 294,795 4,205,432 4.47$

East Dallas 451 25,678,804 5.2% 0.1% 1,358,499 5.3% 5.3% 9,824 (343,951) 0 2,440,730 5.37$

Far North I-35E Corridor 751 71,170,291 2.8% 0.3% 2,226,157 3.1% 3.8% 761,029 693,770 354,744 1,583,709 4.93$

Great Southwest 1,075 94,144,478 6.1% 1.1% 6,790,576 7.2% 8.7% 2,536,502 3,499,789 1,197,000 1,339,989 4.43$


North Fort Worth 360 30,702,796 4.3% 0.2% 1,400,792 4.5% 3.8% 140,275 740,866 372,670 1,407,485 5.11$


North US 75 Corridor 365 21,558,817 3.1% 0.3% 738,685 3.4% 3.1% (76,176) (16,072) 11,400 552,354 6.65$

Northeast Dallas 528 34,912,091 5.2% 1.6% 2,371,710 6.8% 6.4% (83,278) 394,460 0 1,454,400 4.24$

South Dallas 472 67,340,713 15.4% 0.3% 10,613,367 15.7% 14.8% 558,252 628,200 2,281,610 6,531,583 3.64$

South Fort Worth 1,107 45,212,970 5.6% 0.1% 2,587,971 5.7% 5.2% 75,189 62,972 335,625 481,476 5.60$

West I-30 Corridor 289 28,192,733 7.1% 1.2% 2,345,329 8.3% 6.7% (168,369) (178,628) 888,133 0 3.81$

Outlying Metroplex 582 29,218,836 2.3% 0.8% 903,977 3.1% 4.0% 311,768 403,211 50,000 1,591,287 5.42$ Total DFW Market 3,890 614,751,024 5.7% 0.6% 38,198,669 6.2% 6.3% 4,201,940 6,684,555 6,509,477 24,307,725 4.54$

NOITCURTSNOCNOITPROSBA TENYCNACAVSEITREPORP GNITSIXE

NOTE: Statistical set includes industrial properties 10,000 SF and up, excluding data centers. Big-Box is defined as warehouses 200,000 square feet and larger with 28’ clear. Non Big-Box includes all other warehouse/distribution properties. While CoStar attempts to provide the most accurate data at the end of every quarter, revisions are made throughout the year accounting for discrepancies in past reporting.






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Market Trends & StatsMANUFACTURING

FLEX

ALL INDUSTRIAL: WAREHOUSE / DISTRIBUTION (BIG-BOX & NON BIG-BOX), MANUFACTURING, AND FLEX




> Flex product has seen relatively stable occupancy for the last two years. In Q2 2018 vacancy decreased a 0.2% to 6.2%, with 6.5 million square feet vacant. The West I-30 Corridor was once again fully occupied, and the North US 75 Corridor had the highest vacancy rate for flex product at 8.9%

> Demand was strong in Q2 2018, with net absorption of 787,000 square feet. Two markets – the Far North I-35E Corridor and North US 75 Corridor posted above a quarter million square feet in net absorption. With year-to-date net absorption of almost 800,000 square feet, half-year totals far surpass the cumulative two quarters of any year going back to 2002.

> Nine flex properties were under construction at the end of Q2, totaling 710,000 square feet. The majority of construction – 470,000 square feet – is in the Far North I-35E Corridor. Flex properties under construction average 80,000 square feet and were 77% pre-leased at the end of the quarter.

> After a slow start to the year, Q2 2018 showed more of what we’ve come to expect from the DFW market. Overall net absorption was a steady 5 million square feet, and deliveries totaled 4.6 million square feet. Vacancy improved slightly to 5.8%, despite a small uptick in the sublet vacancy rate, which is now at 0.5%.

> Direct net absorption totaled 5.7 million square feet, while sublet net absorption, which has been negative 13 of the past 16 quarters, subtracted 600,000 square feet from that total. Because of the slow Q1, the half-year total is behind that of the past few years, but expect absorption to pick up in Q3 and Q4, although it will not be a near-record year like 2017.

> At the end of the quarter, 97 properties totaling 27 million square feet were under construction, and properties were approximately 40% pre-leased. The average size of properties under construction was 277,000 square feet.

> Manufacturing vacancy held steady from the prior quarter at 2.8%. Year-over-year vacancy is down 0.6%. Northeast Dallas saw a significant rise in vacancy due to a 250,000 square foot move-out in 2901 W Kingsley Dr, causing vacancy to increase 3.5% to 9.2% overall.

> Net absorption for Q2 2018 totaled 110,000 square feet. South Dallas had the highest amount of absorption at 105,000, and the North US 75 Corridor posted 95,000 square feet of net absorption.

> Two manufacturing facilities totaling 110,000 square feet delivered in Q2 2018 – a 20,000 square foot property in Denton and a 90,000 square foot facility for Parker Products in West Tarrant County. At the end of the quarter five properties totaling 1.6 million square feet were under construction.




Total

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Vacancy

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Total

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Current

Vacancy

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Net Abs

Current Qtr

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Net Abs

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New

Supply

YTD SF

Under

Construction

SF

Average

Rate

(NNN)


Manufacturing

00.210000%0.0%0.00%0.0%0.0306,441,19ecnaillA $

DFW Airport 21 2,944,618 0.6% 0.0% 17,694 0.6% 0.6% 0 13,306 31,000 0 7.50$

East Dallas 58 4,160,927 1.3% 0.0% 55,908 1.3% 2.5% 46,387 (43,907) 0 0 5.25$

Far North I-35E Corridor 71 6,040,999 3.5% 0.6% 243,752 4.0% 3.5% (15,000) (4,982) 20,000 0 4.24$

Great Southwest 72 11,190,408 0.9% 0.0% 100,100 0.9% 1.3% 44,780 44,618 0 1,292,997 3.29$

Metropolitan / Addison 20 1,345,112 12.3% 0.0% 164,953 12.3% 13.4% 15,097 (40,903) 0 0 5.29$

North Fort Worth 50 5,976,765 0.8% 0.0% 47,980 0.8% 0.8% 90,000 79,520 90,000 0 4.50$

North I-35E Corridor 116 7,472,507 1.9% 0.0% 143,604 1.9% 1.8% (7,517) (30,339) 0 0 11.75$

North US 75 Corridor 49 10,548,996 1.5% 0.1% 167,370 1.6% 2.5% 95,095 165,467 0 0 10.34$

Northeast Dallas 74 6,722,922 4.5% 5.1% 644,165 9.6% 6.1% (234,851) 142,906 0 0 4.50$

South Dallas 95 13,627,922 2.0% 0.0% 277,502 2.0% 2.8% 105,000 79,518 130,000 0 4.85$

South Fort Worth 107 11,052,028 1.7% 0.0% 190,257 1.7% 1.6% (14,300) 43,087 0 0 5.49$

West I-30 Corridor 30 2,032,832 12.1% 0.0% 246,123 12.1% 12.1% 0 (8,506) 0 0 2.75$

Outlying Metroplex 163 17,246,683 3.0% 0.0% 511,345 3.0% 2.9% (14,918) 23,417 0 317,951 3.95$ Total DFW Market 935 101,507,322 2.4% 0.4% 2,810,753 2.8% 2.8% 109,773 463,202 271,000 1,610,948 4.40$

Flex

08.01004,43000,26659,81623,3%7.3%5.3453,25%0.0%5.3351,115,164ecnaillA $

DFW Airport 210 7,793,136 7.8% 0.2% 622,789 8.0% 8.8% 60,842 103,036 0 102,500 9.69$

East Dallas 203 4,996,351 2.8% 0.1% 141,634 2.8% 3.0% 6,293 (19,860) 0 0 14.09$

Far North I-35E Corridor 298 10,390,789 6.2% 0.1% 653,902 6.3% 8.6% 252,441 257,581 14,994 470,000 9.08$

Great Southwest 302 8,908,295 5.9% 0.2% 543,053 6.1% 6.6% 42,526 12,243 0 0 8.93$

Metropolitan / Addison 239 8,451,391 7.4% 0.5% 670,115 7.9% 8.0% 9,727 (52,560) 0 0 9.85$

North Fort Worth 65 2,496,027 1.8% 0.0% 45,614 1.8% 1.0% (19,580) (5,017) 0 0 9.19$

North I-35E Corridor 725 20,178,829 5.4% 0.0% 1,100,376 5.5% 4.5% 163,690 160,705 380,000 0 12.99$

North US 75 Corridor 429 16,204,250 8.6% 0.3% 1,438,731 8.9% 9.4% 254,709 380,717 251,587 53,776 10.34$

Northeast Dallas 318 8,630,181 4.1% 0.0% 352,151 4.1% 4.7% 56,750 75,864 0 0 6.09$

South Dallas 138 2,928,537 4.6% 0.0% 135,055 4.6% 3.8% (23,636) (77,840) 0 0 6.80$

South Fort Worth 330 9,062,263 5.2% 0.8% 537,711 5.9% 5.7% (21,625) (110,642) 0 0 8.87$

West I-30 Corridor 75 2,037,700 0.0% 0.0% 0 0.0% 0.0% 0 70,000 0 0 12.00$

Outlying Metroplex 92 1,950,472 12.4% 0.0% 241,073 12.4% 11.0% 1,817 (17,953) 112,000 49,649 11.26$ Total DFW Market 3,470 105,539,374 6.0% 0.2% 6,534,558 6.2% 6.4% 787,280 795,230 820,581 710,325 10.07$

All Industrial: Warehouse/Distribution (Big-Box and NON Big-Box), Manufacturing and Flex

086,357,2005,587148,885,1745,947%6.5%7.3497,854,1%0.0%7.3819,774,93732ecnaillA

DFW Airport 705 73,723,993 4.8% 0.7% 4,017,886 5.4% 5.8% 273,446 208,140 325,795 4,307,932

East Dallas 712 34,836,082 4.4% 0.1% 1,556,041 4.5% 4.6% 62,504 (407,718) 0 2,440,730

Far North I-35E Corridor 1,120 87,602,079 3.3% 0.3% 3,123,811 3.6% 4.3% 998,470 946,369 389,738 2,053,709

Great Southwest 1,449 114,243,181 5.6% 0.9% 7,433,729 6.5% 7.8% 2,623,808 3,556,650 1,197,000 2,632,986

Metropolitan / Addison 461 20,888,958 6.3% 0.4% 1,399,122 6.7% 5.7% (210,365) (278,722) 0 0

North Fort Worth 475 39,175,588 3.7% 0.1% 1,494,386 3.8% 3.2% 210,695 815,369 462,670 1,407,485

North I-35E Corridor 2,394 83,468,975 3.1% 0.2% 2,757,689 3.3% 2.6% (176,639) (292,220) 380,000 0

North US 75 Corridor 843 48,312,063 4.6% 0.3% 2,344,786 4.9% 5.0% 273,628 530,112 262,987 606,130

Northeast Dallas 920 50,265,194 4.9% 1.8% 3,368,026 6.7% 6.1% (261,379) 613,230 0 1,454,400

South Dallas 705 83,897,172 12.9% 0.2% 11,025,924 13.1% 12.5% 639,616 629,878 2,411,610 6,531,583

South Fort Worth 1,544 65,327,261 4.9% 0.2% 3,315,939 5.1% 4.7% 39,264 (4,583) 335,625 481,476

West I-30 Corridor 394 32,263,265 7.0% 1.0% 2,591,452 8.0% 6.6% (168,369) (117,134) 888,133 0

Outlying Metroplex 837 48,415,991 2.9% 0.5% 1,656,395 3.4% 3.9% 298,667 408,675 162,000 1,958,887Total DFW Market 12,794 821,797,720 5.3% 0.5% 47,543,980 5.8% 5.9% 5,098,993 7,942,987 7,601,058 26,628,998



MANUFACTURING


FLEX


Q2 2018 Notable Industrial Lease Transactions

TENANT PROPERTY SUBMARKET SF LEASED PROPERTY TYPE DEAL TYPE SIGN DATE

PPG Industries, Inc 1001 Lakeside Pky Far North I-35E Corridor 449,200 Big-Box New 6/1/2018

Rent The Runway 1111 W Bardin Rd Great Southwest 319,200 Non Big-Box New 4/1/2018

Hollander 2615 Gifford St Great Southwest 311,215 Big-Box New 6/1/2018

Simmons Bedding Company 2450 Esters Blvd DFW Airport 213,392 Big-Box Renewal 4/1/2018

Toyota Motor Sales USA LLC 1825 Midway Rd Far North I-35E Corridor 121,188 Non Big-Box New 5/1/2018

Barrett Distribution 3800 Leon Rd Northeast Dallas 115,041 Big-Box New 4/1/2018

Mars Petcare 2200 Danieldale Rd South Dallas 106,000 Big-Box New 5/1/2018

Whitmore Manufacturing 300 Apache Trl Outlying Market 101,160 Non Big-Box New 4/1/2018

Arcadia, Inc 7601 Ambassador Row North I-35E Corridor 86,731 Non Big-Box New 5/1/2018

Style Access 1613 Hutton Dr Far North I-35E Corridor 81,560 Big-Box New 6/1/2018

Blue Ribbon Delivery 2101-2115 Exchange Dr Great Southwest 55,376 Non Big-Box New 4/1/2018

Bathcrest 3125 N Great Southwest Pky

Great Southwest 54,353 Big-Box New 4/1/2018

Network Logistics 750 Royal Ln DFW Airport 42,600 Non Big-Box New 4/1/2018

Ultraflex Systems 850 S Jupiter Rd Northeast Dallas 40,000 Non Big-Box Renewal 6/1/2018

Lease Comps Leasing activity for all product types totaled 7.3 million square feet and approximately 500 deals were signed. Big-Box leasing comprised 40% of the total square footage leased, while Non Big-Box made up 44% and flex comprised 12%.

Q2 2018 Notable Industrial Sale Transactions

PROPERTY ADDRESS SUBMARKET CLUSTER SALE DATE SALE PRICE SIZE (SF) PSF PROPERTY TYPE BUYER

10310-10455 Markison Rd, 10410-10540 Miller Rd, 10445,10465 Vista Park Rd

Northeast Dallas May-18 $11,800,000 193,931 $61 Flex Agellan Commercial REIT

4200-4240 Spring Valley Rd Metropolitan/Addison Apr-18 $4,600,000 61,139 $75 Flex Greg St. Clair

1707 Briercroft Ct Far North I-35E Apr-18 $3,750,000 35,000 $107 Non Big-Box Concord Capital Partners

3445 S Burleson Blvd Outlying Market May-18 $2,145,000 21,810 $98 Non Big-Box Holt Cat Equipment

11177 Ables Ln North I-35E Corridor May-18 $762,000 11,260 $68 Non Big-Box Magic Moments Parties and Events

Sales Comps Investment activity in Q2 2018 totaled $617 million, which was down 27% from the previous quarter and 21% from Q2 2017. The rolling four-quarter total was 9.2% lower than in Q2 2017, at $2.8 billion. Industrial investment sales has been hindered by a lack of available product for sale.


Q2 2018 Notable Industrial Lease Transactions


PPG Industries, Inc 1001 Lakeside Pky Far North I-35E Corridor 449,200 Big-Box New 6/1/2018

Rent The Runway 1111 W Bardin Rd Great Southwest 319,200 Non Big-Box New 4/1/2018

Hollander 2615 Gifford St Great Southwest 311,215 Big-Box New 6/1/2018

Simmons Bedding Company 2450 Esters Blvd DFW Airport 213,392 Big-Box Renewal 4/1/2018

Toyota Motor Sales USA LLC 1825 Midway Rd Far North I-35E Corridor 121,188 Non Big-Box New 5/1/2018

Barrett Distribution 3800 Leon Rd Northeast Dallas 115,041 Big-Box New 4/1/2018

Mars Petcare 2200 Danieldale Rd South Dallas 106,000 Big-Box New 5/1/2018

Whitmore Manufacturing 300 Apache Trl Outlying Market 101,160 Non Big-Box New 4/1/2018

Arcadia, Inc 7601 Ambassador Row North I-35E Corridor 86,731 Non Big-Box New 5/1/2018

Style Access 1613 Hutton Dr Far North I-35E Corridor 81,560 Big-Box New 6/1/2018

Blue Ribbon Delivery 2101-2115 Exchange Dr Great Southwest 55,376 Non Big-Box New 4/1/2018

Bathcrest 3125 N Great Southwest Pky

Great Southwest 54,353 Big-Box New 4/1/2018

Network Logistics 750 Royal Ln DFW Airport 42,600 Non Big-Box New 4/1/2018

Ultraflex Systems 850 S Jupiter Rd Northeast Dallas 40,000 Non Big-Box Renewal 6/1/2018

Q2 2018 Notable Industrial Sale Transactions


10310-10455 Markison Rd, 10410-10540 Miller Rd, 10445,10465 Vista Park Rd

Northeast Dallas May-18 $11,800,000 193,931 $61 Flex Agellan Commercial REIT

4200-4240 Spring Valley Rd Metropolitan/Addison Apr-18 $4,600,000 61,139 $75 Flex Greg St. Clair

1707 Briercroft Ct Far North I-35E Apr-18 $3,750,000 35,000 $107 Non Big-Box Concord Capital Partners

3445 S Burleson Blvd Outlying Market May-18 $2,145,000 21,810 $98 Non Big-Box Holt Cat Equipment

11177 Ables Ln North I-35E Corridor May-18 $762,000 11,260 $68 Non Big-Box Magic Moments Parties and Events

20 TOTAL 10K-50K SF

12 TOTAL 50K-100K SF




3 TOTAL 750K-1M SF

UNDER CONSTRUCTION

6 TOTAL 1M+ SF

821.8M SFTOTAL INDUSTRIALINVENTORY

Q2 2018 DALLAS-FORT WORTH HIGHLIGHTS

NON BIG-BOX: 47%

FLEX: 13%

BIG-BOX: 28%

MANUFACTURING: 12%

WAREHOUSE / DISTRIBUTIONBUILDINGS BY SIZE

1 MILLION + SF

9.1%VACANCY

6,352K SFNET ABSORPTION

$3.83 / 0.0%RENTAL RATE ANNUAL CHANGE

NON BIG-BOX 4 5,397,348 0.0%BIG-BOX 33 31,239,852 4.2%

TOTAL NON BIG-BOX 7,887 BUILDINGS 388,877,889 SF

TOTAL BIG-BOX 526 BUILDINGS 227,125,364 SF

750K-1M SF


500K-750K SF


200K-500K SF


100K-200K SF

NON BIG-BOX 812 110,554,524 6.8%

50K-100K SF

NON BIG-BOX 1,261 87,494,739 4.5%

10K-50K SF

NON BIG-BOX 5,613 126,212,634 3.2%

BUILDINGS SQUARE FEET VACANCY

INDUSTRIALN

UM

BE

R O

F B

UIL

DIN

GS

BU

ILD

ING

SIZ

E (S

QU

AR

E F

EE

T)

105.5M SF

387.5M SF

223.3M SF

101.6M SF

1 11

7 13

9

3

1 5

1 29

4 13

BIG-BOX NON BIG-BOXFLEX MANUFACTURING

CU

RR

ENT

QU

AR

TER BIG-BOX

4.6%VACANCY

463K SFNET ABSORPTION


NON BIG-BOX

6.2%VACANCY



FLEX

2.8%VACANCY


$4.40 / -9.3%RENTAL RATE ANNUAL CHANGE

MANUFACTURING

W A R E H O U S E / D I S T R I B U T I O N

1

77

20

30

30

308080

820

820

820

DNT

DNT

LLT

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45

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75

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1709

12

12

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12

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408

161

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114

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1212499

303

352

190

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190

78

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66

205

183

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199

287

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67

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288

114

20

20635

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20

287

81

175

26

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380

114

183

DENTON

GARLAND

360

360

190

635

8

6

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4

13 3

1

12

2

9

14

115

10

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14

14

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35W

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35E35W

WEST TARRANT COUNTY

WEST DFWAIRPORT

UPPERGREAT

SOUTHWEST

ARLINGTON

SOUTH CENTRALTARRANT COUNTY

EAST FORT WORTHNORTH CENTRAL

FORT WORTH

SOUTH CENTRALFORT WORTH

SOUTHWEST TARRANT

RED BIRDAIRPORT

SOUTHEAST DALLASI-45

SOUTHWEST DALLASUS 67

LOWERGREAT

SOUTHWEST

MANSFIELD

NORTH STEMMONSVALWOOD

ALLEN / McKINNEY

PLANO

ROCKWALL

NORTHEAST DALLASGARLAND

RICHARDSON

CENTRALEAST DALLAS

EAST DALLASMESQUITE

EAST DFWAIRPORT

LEWISVILLE

MEACHAM FIELDFOSSIL CREEK

NORTHEAST TARRANT COUNTYALLIANCE

METRO-POLITAN/ADDISON

EAST HINES NORTH

NORTHTRINITY

WESTHINESNORTH

WEST BROOKHOLLOW

WESTERN LONESTARTURNPIKE

EASTERN LONESTARTURNPIKE

35E

EAST BROOKHOLLOW

INDUSTRIAL SUBMARKET MAP

BLDGS#

RBA(SF)

VacRate

ABS(YTD)

New Sply

UnderConst

Rate(NNN)

BLDGS#

RBA(SF)

VacRate

ABSYTD

New Sply

UnderConst

1 Alliance 182 36.8m 3.8% 746k 724k 2.7m $3.89 237 39.5m 3.7% 750k 786k 2.8m

2 DFW Airport 474 63m 5.4% 213k 295k 4.2m $4.47 705 73.7m 5.4% 273k 326k 4.3m

3 East Dallas 451 25.7m 5.3% 10k 0 2.4m $5.37 712 34.8m 4.5% 63k 0 2.4m

4 Far North I-35E Corridor 751 71.2m 3.1% 761k 355k 1.6m $4.93 1,120 87.6m 3.6% 998k 390k 2.1m

5 Great Southwest 1,075 94.1m 7.2% 2.5m 1.2m 1.3m $4.43 1,449 114.2m 6.5% 2.6m 1.2m 2.6m

6 Metropolitan-Addison 202 11.1m 5.1% (235k) 0 0 $4.74 461 20.9m 6.7% (210k) 0 0

7 North Fort Worth 360 30.7m 4.5% 140k 373k 1.4m $5.11 475 39.2m 3.8% 211k 463k 1.4m

8 North I-35E Corridor 1,553 55.8m 2.7% (333k) 0 0 $6.55 2,394 83.5m 3.3% (177k) 380k 0

9 North US 75 Corridor 365 21.6m 3.4% (76k) 11k 552k $6.65 843 48.3m 4.9% 274k 263k 606k

10 Northeast Dallas 528 34.9m 6.8% (83k) 0 1.5m $4.24 920 50.3m 6.7% (261k) 0 1.5m

11 South Dallas 472 67.3m 15.7% 558k 2.3m 6.5m $3.64 705 83.9m 13.1% 640k 2.4m 6.5m

12 South Fort Worth 1,107 45.2m 5.7% 75k 336k 481k $5.60 1,544 65.3m 5.1% 39k 336k 481k

13 West I-30 Corridor 289 28.2m 8.3% (168k) 888k 0 $3.81 394 32.3m 8.0% (168k) 888k 0

14 Outlying Market 582 29.2m 3.1% 312k 50k 1.6m $5.42 837 48.4m 3.4% 299k 162k 2mTotal DFW Market 3,890 614.8m 6.2% 4.2m 6.5m 24.3m $4.54 12,794 821.8m 5.8% 5.1m 7.6m 26.6m

Warehouse/Distribution: Big-Box and Non Big-Box

Submarket

All Industrial: WH/DIST (Big-Box & Non Big-Box), MFG & Flex

8

Colliers International | Market000 Address, Suite # 000 Address, Suite #+1 000 000 0000colliers.com/<<market>>

8Copyright © 2018 Colliers International.The information contained herein has been obtained from CoStar, Real Capital Analytics, and other primary and secondary sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report.

1717 McKinney AvenueSuite 900 Dallas, Texas 75202+1 214 692 1100colliers.com/dallasfortworth

RESEARCHERS:

MIKE OTILLIO KARI BEETSDirector of Research Business Development and Content StrategistDIRECT +1 214 217 1232 DIRECT +1 214 217 [email protected] [email protected]




AnnualChange

Quarterly Change

Quarterly Forecast*

Vacancy

Net Absorption

Under Construction

*Projected

Warehouse / Distribution Industrial



Vacancy Rate 10.1% 4.4% 6.5% 6.5% 2.8%


Absorption YTD(Thousands Square Feet) 1,613 360 1,972 -38 356

New Supply YTD(Thousands Square Feet) 1,967 610 2,577 179 161

Under Construction(Thousands Square Feet) 13,700 7,656 21,356 1,214 1,448


Average Quoted (NNN) $ 3.84 $ 5.20 $ 4.47 $ 9.84 $ 4.36


Year-Over-Year Change 0.5% 6.3% 0.7% 0.9% 1.8%

Industrial catches its breath after active 2017MIKE OTILLIO Director of Market ResearchKARI BEETS Senior Research AssociateNew development has been the driving force behind the Dallas-Fort Worth industrial market the past few years and Q1 2018 is no exception. However, it is the lack of deliveries that affected the market this quarter -- only 3 million properties were delivered compared to eight in Q4 2017. Deliveries of large build-to-suits and spec properties that are quickly occupied have driven absorption the last few quarters, and the lack of deliveries contributed to lackluster absorption of 2.3 million square feet. Despite fewer deliveries, developers are still optimistic about the market as evidenced by the 24 million square feet under construction of which 60% is spec.

While e-commerce and Big-Box product remains the dominant force in the market, there has been increasing construction of small spec product, especially in infill markets in response to tenants seeking last-mile facilities close to population centers. The average size for Non Big-Box product under construction has dropped from 125,000 square feet in Q1 2017 to 71,000 this quarter. Rates for Non Big-Box product continued to climb in Q1 -- jumping 2.2% to $5.20 NNN.

Vacancy remained flat for most product types in Q1 2018, showing that supply and demand are nearly balanced. Flex saw the greatest increase in vacancy at just 0.2%, while manufacturing vacancy dropped 0.2%. Vacant existing manufacturing space is the hardest to come by in DFW with a 3% vacancy rate followed by Non Big-Box space with at 4.3%.

OutlookDFW’s population continues to grow, so demand will continue to grow for logistics space -- both for e-commerce distribution and infill sites for last-mile logistics. Expect construction of warehouse product to continue to hover in the 20 million range for the foreseeable future.

Vacancy will rise slightly over the next few quarter especially for Big-Box warehouse space. While demand exists for such space, due to the availability of land, many large tenants have been opting for build-to-suits. Only four Big-Box build-to-suits were under construction last summer, while eight totaling 6.3 million square feet are currently under construction. Expect this trend to continue as more developers are readying sites and waiting for tenants to come along before starting construction.

Colliers Research segments industrial product into three categories: Warehouse/Distribution (which is comprised of Big-Box and Non Big- Box Industrial), Manufacturing, and Flex. The All Industrial summary is comprised of Warehouse/Distribution, Manufacturing, and Flex.


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> Non Big-Box Warehouse product posted net absorption of 359,000 square feet in Q1. Direct absorption accounted for 519,000 square feet, while negative absorption took 161,000 off the total. Northeast Dallas had the highest amount of new space occupied with 452,000 square feet.

> Vacant Non Big-Box space increased by 250,000 square feet from Q4 2017 to Q1 2018, increasing the total vacancy rate to 4.4%. Of Non Big-Box markets with over 10 million square feet, the North I-35E Corridor had the lowest rate at 2.1%. The West I-30 Corridor has the highest Non Big-Box vacancy rate at 8.1%, which is below the overall vacancy rate for Big-Box product.

> Asking rental Rates for Non Big-Box product increased 2.2% from Q4 2017 to $5.20 NNN. This is a jump of 6.8% from Q1 of the prior year, signaling that there is more demand than supply for Big-Box product.

> Vacancy for warehouse/distribution product was relatively flat quarter-to-quarter, increasing by only 604,000 square feet to 6.5%. South Dallas continues to be the submarket with the highest vacancy rate, which increased 1.3% this quarter to 15.6%. North Fort Worth saw the greatest decrease in vacancy rate, dropping 2% to 3.8%.

> Net absorption for Q1 2018 was 2 million square feet, down significantly from Q4 2017’s record-setting total of 9.4 million SF. Deliveries in the quarter were the lightest since Q4 2013 and net absorption was negatively affected by 1.4 million square feet of sublet space being put on the market.

> Alliance saw the greatest absorption of all warehouse markets with 825,814 square feet, while East Dallas saw the highest amount of negative absorption totaling 353,775 square feet.

> Vacancy for Big-Box product rose 0.1%, with vacant space increasing by 354,115 square feet. An increase in sublease space on the market caused the overall rise in vacancy, as direct vacancy was down 0.6% from the previous quarter, while sublease space increased half a percent.

> Net absorption was significantly slower in Q1 2018 than activity in previous years. Total absorption was 1.6 million square feet. This was significantly affected by negative absorption from Restoration Hardware subleasing 858,000 square feet at 1303 W Pioneer Pky and 310,000 square feet of vacated sublet space in E DFW Airport.

> Average asking rates for Big-Box product in Q1 2018 were $3.84 NNN, with a 1.3% increase quarter-over-quarter. Since rates dipped in the latter half of 2017, rates were only up half a percentage point year-over-year.




Total

Inventory

SF

Direct

Vacancy

Rate

Sublease

Vacancy

Rate

Total

Vacant

SF

Vacancy

Rate

Current

Vacancy

Rate

Prior Qtr

Net Abs

Current Qtr

SF

Net Abs

YTD

SF

New

Supply

YTD SF

Under

Construction

SF

Average

Rate

(NNN)


96.3256,636,1005,327055,428055,428%5.7%0.7680,080,2%0.0%0.7348,228,9265ecnaillA $

DFW Airport 79 33,186,380 2.6% 1.1% 1,227,537 3.7% 2.6% (74,412) (74,412) 294,795 528,162 3.91$

East Dallas 17 6,995,656 12.2% 0.0% 852,969 12.2% 6.2% (419,626) (419,626) 0 0 3.73$

Far North I-35E Corridor 59 23,374,731 3.2% 0.1% 772,741 3.3% 5.0% 386,930 386,930 0 235,900 4.31$

Great Southwest 89 34,450,961 14.8% 2.6% 5,976,907 17.3% 18.3% 341,675 341,675 0 2,093,075 4.30$


North Fort Worth 22 10,496,421 2.8% 0.0% 293,121 2.8% 5.8% 318,914 318,914 0 1,053,485 4.04$



Northeast Dallas 24 8,112,945 10.7% 0.0% 866,722 10.7% 11.0% 25,860 25,860 0 764,400 4.02$

South Dallas 82 43,323,533 20.9% 0.0% 9,071,665 20.9% 19.5% 134,942 134,942 948,380 6,276,125 3.56$

South Fort Worth 17 5,897,146 9.0% 0.0% 529,888 9.0% 14.2% 307,826 307,826 0 287,261 N/A

West I-30 Corridor 35 15,024,226 4.4% 1.1% 815,085 5.4% 3.9% (234,099) (234,099) 0 322,215 3.50$

Outlying Metroplex 10 8,626,457 0.0% 0.0% 0 0.0% 0.0% 0 0 0 300,000 4.85$ Total DFW Market 500 223,263,522 9.4% 0.6% 22,486,721 10.1% 10.0% 1,612,560 1,612,560 1,966,675 13,699,545 3.84$


66.5821,660,10462,1462,1%1.1%0.1575,27%0.0%0.1172,610,7721ecnaillA $

DFW Airport 394 29,463,490 7.8% 0.1% 2,346,723 8.0% 7.8% (42,463) (42,463) 0 2,922,448 5.64$

East Dallas 435 18,770,397 2.7% 0.1% 515,354 2.7% 3.1% 65,851 65,851 0 1,364,430 5.10$

Far North I-35E Corridor 683 47,049,336 3.6% 0.4% 1,885,951 4.0% 3.0% (468,439) (468,439) 12,000 619,775 5.24$

Great Southwest 985 58,400,529 4.0% 0.3% 2,494,997 4.3% 4.8% 281,286 281,286 0 0 4.41$

Metropolitan / Addison 200 10,581,499 3.0% 0.1% 328,865 3.1% 3.6% 49,930 49,930 0 0 4.71$

North Fort Worth 337 20,036,710 4.4% 0.0% 881,376 4.4% 5.8% 273,277 273,277 0 270,000 5.25$


North US 75 Corridor 356 18,334,995 3.5% 0.2% 672,694 3.7% 3.9% 38,519 38,519 0 159,908 6.01$

Northeast Dallas 507 27,503,934 3.0% 2.2% 1,421,710 5.2% 6.8% 451,878 451,878 0 40,000 4.37$

South Dallas 385 22,258,772 5.2% 0.0% 1,162,753 5.2% 4.6% (145,594) (145,594) 0 1,172,720 4.95$

South Fort Worth 1,090 39,051,524 4.6% 0.1% 1,848,794 4.7% 3.8% (353,640) (353,640) 17,550 20,800 5.47$

West I-30 Corridor 255 12,876,565 8.1% 0.0% 1,039,660 8.1% 5.7% 223,840 223,840 565,918 0 4.25$

Outlying Metroplex 572 20,557,451 4.5% 1.2% 1,164,285 5.7% 6.0% 73,843 73,843 14,500 20,000 5.48$ Total DFW Market 7,880 387,515,519 4.0% 0.4% 17,011,009 4.4% 4.3% 359,778 359,778 609,968 7,656,209 5.20$


28.3087,207,2005,327418,528418,528%2.6%8.5166,251,2%0.0%8.5411,938,63381ecnaillA $

DFW Airport 473 62,649,870 5.0% 0.7% 3,574,260 5.7% 5.1% (116,875) (116,875) 294,795 3,450,610 4.56$

East Dallas 452 25,766,053 5.3% 0.0% 1,368,323 5.3% 3.9% (353,775) (353,775) 0 1,364,430 4.87$

Far North I-35E Corridor 742 70,424,067 3.5% 0.3% 2,658,692 3.8% 3.6% (81,509) (81,509) 12,000 855,675 4.93$

Great Southwest 1,074 92,851,490 8.0% 1.1% 8,471,904 9.1% 9.8% 622,961 622,961 0 2,093,075 4.34$


North Fort Worth 359 30,533,131 3.8% 0.0% 1,174,497 3.8% 5.8% 592,191 592,191 0 1,323,485 4.94$


North US 75 Corridor 363 21,542,759 3.0% 0.2% 672,694 3.1% 3.3% 38,519 38,519 0 362,178 6.01$

Northeast Dallas 531 35,616,879 4.7% 1.7% 2,288,432 6.4% 7.8% 477,738 477,738 0 804,400 4.20$

South Dallas 467 65,582,305 15.6% 0.0% 10,234,418 15.6% 14.4% (10,652) (10,652) 948,380 7,448,845 3.63$

South Fort Worth 1,107 44,948,670 5.2% 0.1% 2,378,682 5.3% 5.2% (45,814) (45,814) 17,550 308,061 5.47$

West I-30 Corridor 290 27,900,791 6.1% 0.6% 1,854,745 6.6% 4.7% (10,259) (10,259) 565,918 322,215 3.85$

Outlying Metroplex 582 29,183,908 3.2% 0.8% 1,164,285 4.0% 4.2% 73,843 73,843 14,500 320,000 5.32$ Total DFW Market 8,380 610,779,041 6.0% 0.5% 39,497,730 6.5% 6.4% 1,972,338 1,972,338 2,576,643 21,355,754 4.47$








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FLEX





> Flex product saw a 0.2% increase from Q4 2017 to a rate of 6.5% in Q1 2018. Demand continues to be strong for flex product, but vacancy has crept up slightly in the last year, up 0.5% over Q1 2017. The West I-30 Corridor had the lowest vacancy rate, with all of its 2 million square feet fully occupied. Of the markets larger than 5 million square feet, East Dallas had the lowest vacancy rate ate 2.4%.

> Q1 net absorption was negative for the second consecutive quarter, posting negative 37,631 square feet. Direct space showed slight positive absorption of 22,000 square feet, but more than 60,000 square feet of sublet space was put on the market, causing the overall total to be negative.

> Seven flex properties delivered in Q1, totaling 179,000 square feet (an average of 25,000 square feet per property). Nine properties totaling 1.2 million square feet are still under construction. As of the end of the year properties under construction are 84.4% leased.

> Q1 2018 slowed slightly from the red-hot market of 2017, but there is little cause for concern about the overall health in the market. Vacancy is flat quarter-to-quarter at 6%, and it has held below 6.5% (historically a low rate for the market) since Q3 2015.

> Net absorption for overall industrial was significantly lower this quarter at 2.3 million square feet. The drop can be largely attributed to the lack of deliveries -- only 3 million square feet -- whereas Q4 2018 saw a lot of new product being delivered and immediately absorbed.

> At the end of the quarter, 76 properties totaling 24 million square feet were under construction, and properties were approximately 40% pre-leased.

> Manufacturing vacancy rate decreased 0.2% to 2.8% from Q4 2017 to Q1 2018. Year-over-year vacancy is down one percentage point. Of all manufacturing submarkets with over 2 million square feet, the West I-30 Corridor has the highest vacancy rate at 12.1%.

> Net absorption for Q1 2018 totaled 356,000 square feet. Northeast Dallas had the highest amount of absorption at 378,000, while East Dallas had the lowest amount at negative 90,000.

> Two manufacturing facilities delivered in Q1 2018 totaling 161,000 square feet. As of the end of the quarter five properties totaling 1.5 million square feet were still under construction.


Dallas-Fort Worth Industrial Market Summary

RENT


Total

Inventory

SF

Direct

Vacancy

Rate

Sublease

Vacancy

Rate

Total

Vacant

SF

Vacancy

Rate

Current

Vacancy

Rate

Prior Qtr

Net Abs

Current Qtr

SF

Net Abs

YTD

SF

New

Supply

YTD SF

Under

Construction

SF

Average

Rate

(NNN)

Manufacturing

00.210000%0.0%0.00%0.0%0.0950,741,19ecnaillA $

DFW Airport 21 2,944,618 0.6% 0.0% 17,694 0.6% 0.0% 13,306 13,306 31,000 0 7.50$

East Dallas 58 4,151,927 2.5% 0.0% 102,295 2.5% 0.3% (90,294) (90,294) 0 0 5.25$

Far North I-35E Corridor 70 6,507,999 2.7% 0.5% 208,752 3.2% 3.4% 10,018 10,018 0 20,000 4.24$

Great Southwest 72 11,190,588 1.3% 0.0% 144,880 1.3% 1.3% (162) (162) 0 1,180,497 3.29$


North Fort Worth 49 5,886,765 0.8% 0.0% 47,980 0.8% 0.6% (10,480) (10,480) 0 90,000 4.50$

North I-35E Corridor 115 7,439,387 1.8% 0.0% 135,087 1.8% 1.5% (22,722) (22,722) 0 0 6.46$

North US 75 Corridor 48 10,433,691 2.3% 0.1% 251,165 2.4% 3.1% 72,804 72,804 0 0 10.24$


South Dallas 95 13,627,922 2.8% 0.0% 382,502 2.8% 1.7% (25,482) (25,482) 130,000 0 2.99$

South Fort Worth 107 11,115,163 1.6% 0.0% 175,957 1.6% 2.1% 57,387 57,387 0 0 4.83$

West I-30 Corridor 30 2,032,832 12.1% 0.0% 246,123 12.1% 11.7% (8,506) (8,506) 0 0 2.75$

Outlying Metroplex 162 17,207,133 2.9% 0.0% 496,427 2.9% 3.1% 38,335 38,335 0 157,951 4.00$ Total DFW Market 929 101,590,518 2.4% 0.4% 2,798,226 2.8% 3.0% 355,961 355,961 161,000 1,448,448 4.36$

Flex

19.9000,02000,26036,32036,32%6.0%2.3086,74%0.0%2.3256,905,124ecnaillA $

DFW Airport 213 8,100,628 9.4% 0.1% 777,039 9.6% 10.1% 42,094 42,094 0 67,500 10.06$

East Dallas 205 5,054,045 2.9% 0.1% 147,738 2.9% 2.4% (25,964) (25,964) 0 0 12.37$

Far North I-35E Corridor 303 10,530,297 8.8% 0.1% 931,827 8.8% 8.5% (35,338) (35,338) 0 484,994 9.32$

Great Southwest 306 9,071,273 6.5% 0.2% 607,876 6.7% 6.1% (50,734) (50,734) 0 0 8.76$


North Fort Worth 65 2,496,027 1.0% 0.0% 26,034 1.0% 1.6% 14,563 14,563 0 0 9.19$

North I-35E Corridor 723 19,797,322 4.4% 0.0% 879,952 4.4% 4.4% (2,985) (2,985) 0 380,000 12.54$

North US 75 Corridor 431 15,616,687 9.2% 0.3% 1,487,578 9.5% 10.1% 128,101 128,101 37,000 190,000 9.40$


South Dallas 139 3,036,473 3.7% 0.0% 111,419 3.7% 1.9% (54,204) (54,204) 0 0 6.79$

South Fort Worth 336 9,282,706 5.2% 0.6% 543,399 5.9% 5.0% (83,895) (83,895) 0 0 8.46$

West I-30 Corridor 76 2,053,583 0.0% 0.0% 0 0.0% 3.4% 70,000 70,000 0 0 N/A

Outlying Metroplex 88 1,887,948 11.1% 0.0% 210,390 11.1% 6.1% (19,270) (19,270) 80,000 71,649 11.11$ Total DFW Market 3,483 105,476,175 6.2% 0.2% 6,823,537 6.5% 6.3% (37,631) (37,631) 179,000 1,214,143 9.84$


087,227,2005,587444,948444,948%8.5%6.5143,002,2%0.0%6.5528,594,93432ecnaillA

DFW Airport 707 73,695,116 5.4% 0.6% 4,368,993 5.9% 5.4% (61,475) (61,475) 325,795 3,518,110

East Dallas 715 34,972,025 4.6% 0.0% 1,618,356 4.6% 3.3% (470,033) (470,033) 0 1,364,430

Far North I-35E Corridor 1,115 87,462,363 4.1% 0.3% 3,799,271 4.3% 4.2% (106,829) (106,829) 12,000 1,360,669

Great Southwest 1,452 113,113,351 7.2% 0.9% 9,224,660 8.2% 8.7% 572,065 572,065 0 3,273,572

Metropolitan / Addison 458 20,854,956 5.1% 0.4% 1,149,325 5.5% 5.1% (87,546) (87,546) 0 0

North Fort Worth 473 38,915,923 3.2% 0.0% 1,248,511 3.2% 4.7% 596,274 596,274 0 1,413,485

North I-35E Corridor 2,393 83,083,755 2.5% 0.1% 2,190,311 2.6% 2.5% (115,481) (115,481) 0 380,000

North US 75 Corridor 842 47,593,137 4.9% 0.2% 2,411,437 5.1% 5.5% 239,424 239,424 37,000 552,178

Northeast Dallas 924 50,799,849 4.3% 1.9% 3,109,941 6.1% 7.9% 893,342 893,342 0 804,400

South Dallas 701 82,246,700 13.0% 0.0% 10,728,339 13.0% 11.8% (90,338) (90,338) 1,078,380 7,448,845

South Fort Worth 1,550 65,346,539 4.6% 0.2% 3,098,038 4.7% 4.6% (72,322) (72,322) 17,550 308,061

West I-30 Corridor 396 31,987,206 6.1% 0.5% 2,100,868 6.6% 5.0% 51,235 51,235 565,918 322,215

Outlying Metroplex 832 48,278,989 3.4% 0.5% 1,871,102 3.9% 3.9% 92,908 92,908 94,500 549,600Total DFW Market 12,792 817,845,734 5.6% 0.4% 49,119,493 6.0% 6.0% 2,290,668 2,290,668 2,916,643 24,018,345




MANUFACTURING


FLEX



Tell Works (T-moble Subsidiary) 4101 Research Dr. Great Southwest 722,000 Big-Box New Feb-18

Professional Packaging 1400 N State Hwy 360 Great Southwest 350,000 Non Big-Box New Jan-18

Vira Insight 2701 S Valley Pkwy Far North I-35E Corridor 329,060 Big-Box New Feb-18

Fiat Chrysler Automotive 1613 Hutton Dr Far North I-35E Corridor 153,814 Non Big-Box New Feb-18

Re-Teck 902 Avenue T Great Southwest 128,019 Non Big-Box New Jan-18

Custom Assembly 1228 Crowley Cir - Bldg 1 Far North I-35E Corridor 110,700 Non Big-Box New Feb-18

American Air 1275 Metro Cir - Bldg 2 DFW Airport 81,271 Non Big-Box New Feb-18

Collier Metal 3333 Miller Park S East Dallas 80,000 Non Big-Box New Feb-18

Lewisville Ladder 801 Heinz Way Great Southwest 65,448 Non Big-Box Renewal Feb-18

Daryl Flood Logistics 1300 N Hwy 3360 Great Southwest 63,295 Non Big-Box New Jan-18

Adtec 514-516 N GSW Pkwy Great Southwest 60,206 Non Big-Box New Feb-18

Majestic Steel 1325 114th St Great Southwest 56,000 Non Big-Box Renewal Feb-18

LOVES Truck Solutions 1504 W North Carrier Pkwy Great Southwest 55,440 Non Big-Box New Feb-18

Prestige Auto Tech 2001 - 2023 Exchange Dr Great Southwest 49,280 Non Big-Box New Feb-18

American Metals 3325 Roy Orr Blvd Great Southwest 48,980 Big-Box New Feb-18

Lease Comps Leasing activity for all product types totaled 8.4 million square feet and approximately 500 deals were signed. Big-Box leasing comprised 41% of the total, while Non Big-Box made up 42% of leasing activity.


2603, 2605 & 2609 Technology Dr. North US 75 Corridor Jan-18 $2,994,375 132,245 $23 Non Big-Box Fornida

2020 Singleton * West I-30 Corridor Mar-18 $25,000,000 472,234 $53 Big-Box Mohr Capital

2001 110th St. Great Southwest Feb-18 $5,038,800 74,100 $68 Non Big-Box Dealer Industries

7243 Grady Biblo Rd South Dallas Jan-18 $59,500,000 663,000 $90 Big-Box Cohen Asset Management

1505 W Walnut Hill Ln DFW Airport Mar-18 $5,100,000 51,295 $99 Flex Jeff Mercer

651 N Plano Rd North US 75 Corridor Mar-18 $5,000,000 96,660 $52 Flex Hartman REIT

Sales Comps Investment activity in Q1 2018 totaled $710 million, which was 1.9% higher than Q4 2017. While investment in office properties in DFW saw a 65% drop from Q4 2017 to Q1 2018 industrial investment has remained strong though the end of 2017 and into 2018.

*Colliers Transaction



2603, 2605 & 2609 Technology Dr. North US 75 Corridor Jan-18 $2,994,375 132,245 $23 Non Big-Box Fornida

2020 Singleton * West I-30 Corridor Mar-18 $25,000,000 472,234 $53 Big-Box Mohr Capital

2001 110th St. Great Southwest Feb-18 $5,038,800 74,100 $68 Non Big-Box Dealer Industries

7243 Grady Biblo Rd South Dallas Jan-18 $59,500,000 663,000 $90 Big-Box Cohen Asset Management

1505 W Walnut Hill Ln DFW Airport Mar-18 $5,100,000 51,295 $99 Flex Jeff Mercer

651 N Plano Rd North US 75 Corridor Mar-18 $5,000,000 96,660 $52 Flex Hartman REIT

13 TOTAL 10K-50K SF

6 TOTAL 50K-100K SF




5 TOTAL 750K-1M SF

UNDER CONSTRUCTION

4 TOTAL 1M+ SF



NON BIG-BOX: 47%

FLEX: 13%

BIG-BOX: 27%

MANUFACTURING: 12%


1 MILLION + SF

10.1%VACANCY






750K-1M SF


500K-750K SF


200K-500K SF


100K-200K SF

NON BIG-BOX 808 110,373,243 6.7%

50K-100K SF

NON BIG-BOX 1,255 87,053,391 3.7%

10K-50K SF

NON BIG-BOX 5,632 126,273,966 3.1%


INDUSTRIALN

UM

BE

R O

F B

UIL

DIN

GS

BU

ILD

ING

SIZ

E (S

QU

AR

E F

EE

T)

105.5M SF

387.5M SF

223.3M SF

101.6M SF

11 4

16 6

5

5

1 3

1 20

11 8


CU

RR

ENT

QU

AR

TER BIG-BOX

4.4%VACANCY



NON BIG-BOX

6.5%VACANCY



FLEX

2.8%VACANCY



MANUFACTURING


77

20

30

30

308080

820

820

820

DNT

DNT

LLT

LLT

45

45

75

75

1709

12

12

12

12

12

12

12

635

635

408

161

161

161

114

121

121

121

121

1212499

303

352

190

190

190

78

78

66

205

183

183

183

183

67

67

67

360

377

377

377

380

380

380

199

287

287

287B

287B

35

35E

35W

35E

35W

35E

35W

35E35W

30

30

35W

67

67

377

288

114

20

20635

20

20

20

287

81

175

26

20820

20

175

30

DNT

DNT

380

114

183

DENTON

GARLAND

360

360

190

635

8

6

7

4

13 3

1

12

2

9

14

115

10

14

14

14

35

35E

35W

35W

35W

35E

35W

35E35W

WEST TARRANT COUNTY

WEST DFWAIRPORT

UPPERGREAT

SOUTHWEST

ARLINGTON



FORT WORTH


SOUTHWEST TARRANT

RED BIRDAIRPORT



LOWERGREAT

SOUTHWEST

MANSFIELD


ALLEN / McKINNEY

PLANO

ROCKWALL


RICHARDSON

CENTRALEAST DALLAS

EAST DALLASMESQUITE

EAST DFWAIRPORT

LEWISVILLE




EAST HINES NORTH

NORTHTRINITY

WESTHINESNORTH

WEST BROOKHOLLOW



35E

EAST BROOKHOLLOW


BLDGS#

RBA(SF)

VacRate

ABS(YTD)

New Sply

UnderConst

Rate(NNN)

BLDGS#

RBA(SF)

VacRate

ABSYTD

New Sply

UnderConst

1 Alliance 183 36.8m 5.8% $V$236<0," 724k 2.7m $3.82 234 39.5m 5.6% 849k 786k 2.7m

2 DFW Airport 473 62.6m 5.7% (117k) 295k 3.5m $4.56 707 73.7m 5.9% (61k) 326k 3.5m

3 East Dallas 452 25.8m 5.3% (354k) 0 1.4m $4.87 715 35m 4.6% (470k) 0 1.4m

4 Far North I-35E Corridor 742 70.4m 3.8% (82k) 12k 856k $4.93 1,115 87.5m 4.3% (107k) 12k 1.4m

5 Great Southwest 1,074 92.9m 9.1% 623k 0 2.1m $4.34 1,452 113.1m 8.2% 572k 0 3.3m

6 Metropolitan-Addison 202 11.1m 3.0% 50k 0 0 $4.71 458 20.9m 5.5% (88k) 0 0

7 North Fort Worth 359 30.5m 3.8% 592k 0 1.3m $4.94 473 38.9m 3.2% 596k 0 1.4m

8 North I-35E Corridor 1,555 55.8m 2.1% (90k) 0 0 $6.24 2,393 83.1m 2.6% (115k) 0 380k

9 North US 75 Corridor 363 21.5m 3.1% 39k 0 362k $6.01 842 47.6m 5.1% 239k 37k 552k

10 Northeast Dallas 531 35.6m 6.4% 478k 0 804k $4.20 924 50.8m 6.1% 893k 0 804k

11 South Dallas 467 65.6m 15.6% (11k) 948k 7.4m $3.63 701 82.2m 13.0% (90k) 1.1m 7.4m

12 South Fort Worth 1,107 44.9m 5.3% (46k) 18k 308k $5.47 1,550 65.3m 4.7% (72k) 18k 308k

13 West I-30 Corridor 290 27.9m 6.6% (10k) 566k 322k $3.85 396 32m 6.6% 51k 566k 322k

14 Outlying Market 582 29.2m 4.0% 74k 15k 320k $5.32 832 48.3m 3.9% 93k 95k 550kTotal DFW Market 8,380 610.8m 6.5% 2m 2.6m 21.4m $4.47 12,792 817.8m 6.0% 2.3m 2.9m 24m

All Industrial: WH/DIST (Big-Box & Non Big-Box), MFG & FlexWarehouse/Distribution: Big-Box and Non Big-Box

Submarket

8




RESEARCHERS:

MIKE OTILLIO KARI BEETSDirector of Research Senior Research AssociateDIRECT +1 214 217 1232 DIRECT +1 214 217 [email protected] [email protected]




AnnualChange

Quarterly Change

Quarterly Forecast*

Vacancy

Net Absorption

Under Construction

*Projected

Warehouse/Distribution Industrial



Vacancy Rate 9.9% 4.3% 6.4% 6.3% 2.7%

Quarterly Change -0.5% -0.3% -0.4% 0.2% -0.6%

Absorption YTD(Thousands Square Feet) 17,897 4,040 21,937 492 1,221

New Supply YTD(Thousands Square Feet) 22,151 4,445 26,597 535 890

Under Construction(Thousands Square Feet) 16,042 1,671 17,713 802 1,251


Average Quoted (NNN) $3.79 $5.15 $4.41 $9.63 $4.52


Year-Over-Year Change 1.8% 7.0% 1.6% -4.3% 1.1%

2017 Sets New Records for Big BoxMIKE OTILLIO Director of Market ResearchKARI BEETS Research AssociateThe Dallas-Fort Worth industrial market refuses to slow down. 2017 posted the second-highest net absorption total of 23.6 million square feet, just 1.9 million behind 2016’s total. While the vacancy rate has risen due to the large amount of spec deliveries, at 5.9%, it remains significantly below the average for the last 20 years of 8.4%.

As e-commerce continues to drive the industrial market, DFW’s market is shifting toward Big-Box product. Five years ago, Big-Box absorption made up 49% of total absorption, Non Big-Box warehouse 38%, Flex 8% and Manufacturing 5%. In 2017, Big-Box made up 76% of total industrial absorption. 2017 was a record year for Big-Box product. Big-Box posted record absorption this year at 17.9 million square feet, half a million square feet above 2016’s total, which had been the highest recorded. In deliveries, Big-Box completed 22 million square feet, over 5 million higher than 2008, which had the second-highest total.

E-commerce has and will continue to dominate demand in the industrial space. In the fourth quarter, Amazon had three of the ten largest move-ins in 2017, totaling 2.5 million square feet, a quarter of total industrial absorption. Shipping services are also expanding in response to industrial demand — in 2017, UPS added a one million square foot distribution center at 2320 E Bardin Rd and FedEx moved into a 350,000 square foot ground distribution center in Mesquite.

OutlookWith DFW’s continued dominance as the distribution hub for the south-central US, speculative construction will continue, seeking to attract ecommerce tenants. E-commerce has created greater uncertainty around what consumers will demand a year from now, so tenants will demand flexibility in their real estate strategy -- as Amazon has done through its recent 18-month leases. Companies will also seek flexibility through using 3PLs to allow them to optimize their real estate strategy while being able to focus on their core business.

Rates will start to rise for infill markets as consumers within the metroplex seek faster delivery and industrial land becomes scarce. DFW Airport will see rising rates in the warehouse market and the North I-35E Corridor will see rising rates in Flex and Non Big-Box space. Developers will look to invest in these markets and retrofit or redevelop old warehouse space.

Colliers Research segments industrial product into three categories: Warehouse/ Distribution (which is comprised of Big-Box and Non Big- Box Industrial), Manufacturing, and Flex. The All Industrial summary is comprised of Warehouse/Distribution, Manufacturing, and Flex.


0%

2%

4%

6%

8%

10%

12%

14%

-5

0

5

10

15

20

25

30

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Vaca

ncy

Rate

Mill

ions

of S

quar

e Fe

et

0%

5%

10%

15%

20%

25%

0

5

10

15

20

25

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Vaca

ncy

Rate

Mill

ions

of S

quar

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2%

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6%

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10%

12%

-6

-4

-2

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6

8

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Vaca

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quar

e Fe

et








> Although Non Big-Box warehouse / distribution product accounts for 64% of total warehouse product, in Q4 2017. It accounted for only 21% of the quarterly net absorption.

> Vacancy in the Non Big-Box sector reached a new historical low at 4.3% after decreasing 0.3% from the prior quarter, matching its rate from Q4 2016. DFW Airport had the highest vacancy rate for this product at 8.4%, in contrast to its market-low rate for Big-Box product. Alliance was the tightest Non Big-Box market with a 0.6% vacancy rate.

> Rental rates for Non Big-Box product increased 2.6% from Q3 to Q4 to $5.15. Rates increased 7.5% year-over-year, the largest rate increase in this cycle. North Fort Worth had the highest rental rates of any market at $6.20, while the West I-30 Corridor posted the lowest average rates at $4.15.

> Warehouse/Distribution products are divided into Big-Box and Non Big-Box. Big-Box is classified as distribution centers larger than 200,000 square feet with a clear height greater than 28’ clear.

> Total warehouse vacancy decreased 0.4% from 6.8% Q3 to 6.4% in Q4 2017, but was up 0.5% year-over-year. South Dallas’ vacancy decreased 2% from the previous quarter, but was still the highest of any market at 14.5%. North I-35E continued to have the lowest vacancy at 2%, a decrease of 60bp from the previous quarter.

> The warehouse market saw positive absorption of 9 million square feet for the quarter, and 22 million for the year. Annual net absorption was 1.6 million behind 2016’s total, but up 14% from 2015. North US 75 Corridor was the only submarket that had negative absorption for the year (-36,000 square feet). South Dallas has the highest absorption of 4.4 million square feet, which caused its vacancy drop.

> Big-Box product accounted for 80% of total warehouse absorption for the quarter, or 7.1 million square feet of the 9 million total. For all of 2017, Big-Box product absorbed 18 million square feet of the 22 million total.

> 2017 delivered 22 million square feet in 43 properties, the most of any time in our statistical history. The construction pipeline still holds 33 properties totaling 16 million square feet, of which two-thirds are speculative, a drop from 87% speculative for the construction pipeline at the end of Q3.

> Rental rates for Big-Box product were flat from Q3 to Q4 2017 at $3.79 and are up 1.9% year-over year. The Far North I-35E corridor, which includes North Stemmons and Lewisville, had the highest rental rates at $4.51 triple net. The West I-30 Corridor, Alliance, and South Dallas submarket are the least expensive – averaging $3.50 psf.




Total

Inventory

SF

Direct

Vacancy

Rate

Sublease

Vacancy

Rate

Total

Vacant

SF

Vacancy

Rate

Current

Vacancy

Rate

Prior Qtr

Net Abs

Current Qtr

SF

Net Abs

YTD

SF

New

Supply

YTD SF

Under

Construction

SF

Average

Rate

(NNN)


15.3251,063,2262,849507,604,2000,063%7.8%5.7631,181,2%0.0%5.7343,990,9245ecnaillA $

DFW Airport 78 32,891,585 2.4% 0.2% 858,330 2.6% 5.1% 1,762,879 1,967,803 1,432,256 822,957 3.86$

East Dallas 17 6,995,656 6.2% 0.0% 433,343 6.2% 7.6% 100,000 539,281 351,874 877,230 3.73$

Far North I-35E Corridor 59 23,367,411 4.9% 0.1% 1,159,671 5.0% 5.1% 627,579 2,148,442 1,465,888 235,900 4.51$

Great Southwest 88 34,248,357 17.8% 0.1% 6,115,978 17.9% 16.3% 1,159,659 3,356,512 6,663,734 1,894,122 4.11$


North Fort Worth 22 10,496,421 5.8% 0.0% 612,035 5.8% 4.3% 416,168 1,969,082 1,969,885 1,053,485 4.04$



Northeast Dallas 24 8,112,945 11.0% 0.0% 892,582 11.0% 6.3% 447,718 578,219 1,153,516 764,400 4.05$

South Dallas 81 42,375,153 19.5% 0.0% 8,258,227 19.5% 22.2% 1,996,365 4,241,046 6,944,015 7,221,835 3.53$

South Fort Worth 17 5,897,146 14.2% 0.0% 837,714 14.2% 14.9% 456,475 -47,650 790,064 287,261 N/A

West I-30 Corridor 35 15,024,226 3.9% 0.0% 580,986 3.9% 2.5% -197,877 737,501 733,241 322,215 3.50$

Outlying Metroplex 10 8,626,457 0.0% 0.0% 0 0.0% 0.0% 0 0 0 0 N/ATotal DFW Market 495 221,086,923 9.9% 0.1% 21,930,002 9.9% 10.4% 7,128,966 17,896,941 22,151,235 16,041,827 3.79$


69.40609,99037,046346,88%7.1%6.0933,53%0.0%6.0473,203,6611ecnaillA $

DFW Airport 376 28,790,718 8.0% 0.3% 2,410,047 8.4% 6.9% -162,976 583,159 1,664,422 312,569 5.18$

East Dallas 420 18,096,116 3.2% 0.1% 581,205 3.2% 3.8% 115,161 117,998 0 0 4.62$

Far North I-35E Corridor 655 45,596,297 3.0% 0.2% 1,426,121 3.1% 3.9% 403,936 1,279,133 721,366 589,775 4.88$

Great Southwest 923 56,782,347 4.1% 0.2% 2,482,279 4.4% 5.5% 807,606 578,460 583,458 333,528 4.42$


North Fort Worth 291 18,888,993 6.1% 0.1% 1,154,653 6.1% 5.5% 9,817 21,394 180,576 0 6.20$

North I-35E Corridor 1,511 55,399,289 1.9% 0.1% 1,095,698 2.0% 2.6% 329,534 352,164 0 0 6.18$

North US 75 Corridor 319 17,396,384 3.9% 0.4% 746,988 4.3% 4.0% -31,958 -36,239 40,750 0 6.08$

Northeast Dallas 473 26,649,668 3.7% 2.2% 1,585,338 5.9% 7.4% 446,176 349,624 323,350 0 4.38$

South Dallas 362 21,377,425 4.7% 0.0% 1,005,843 4.7% 5.6% 182,673 127,519 281,984 0 4.62$

South Fort Worth 998 36,791,794 3.8% 0.2% 1,446,702 3.9% 3.0% -307,463 104,712 71,850 38,350 5.77$

West I-30 Corridor 239 12,071,770 5.0% 0.5% 665,264 5.5% 4.8% -86,645 -437,684 0 376,718 4.15$

Outlying Metroplex 486 17,679,988 5.3% 1.3% 1,174,688 6.6% 6.2% -80,799 298,920 507,750 20,000 4.99$ Total DFW Market 7,369 372,466,349 4.0% 0.4% 16,188,960 4.3% 4.6% 1,878,712 4,040,105 4,445,412 1,670,940 5.15$


80.4251,063,2861,840,1534,740,3346,844%5.7%3.6574,612,2%0.0%3.6717,104,53071ecnaillA $

DFW Airport 454 61,682,303 5.0% 0.3% 3,268,377 5.3% 5.9% 1,599,903 2,550,962 3,096,678 1,135,526 4.36$

East Dallas 437 25,091,772 4.0% 0.0% 1,014,548 4.0% 4.9% 215,161 657,279 351,874 877,230 4.50$

Far North I-35E Corridor 714 68,963,708 3.6% 0.1% 2,585,792 3.7% 4.3% 1,031,515 3,427,575 2,187,254 825,675 4.76$

Great Southwest 1,011 91,030,704 9.3% 0.2% 8,598,257 9.4% 9.4% 1,967,265 3,934,972 7,247,192 2,227,650 4.35$


North Fort Worth 313 29,385,414 6.0% 0.0% 1,766,688 6.0% 5.1% 425,985 1,990,476 2,150,461 1,053,485 5.71$


North US 75 Corridor 326 20,604,148 3.3% 0.3% 746,988 3.6% 3.4% -31,958 -36,239 40,750 202,270 6.08$

Northeast Dallas 497 34,762,613 5.4% 1.7% 2,477,920 7.1% 7.2% 893,894 927,843 1,476,866 764,400 4.22$

South Dallas 443 63,752,578 14.5% 0.0% 9,264,070 14.5% 16.5% 2,179,038 4,368,565 7,225,999 7,221,835 3.57$

South Fort Worth 1,015 42,688,940 5.2% 0.1% 2,284,416 5.4% 4.6% 149,012 57,062 861,914 325,611 5.77$

West I-30 Corridor 274 27,095,996 4.4% 0.2% 1,246,250 4.6% 3.5% -284,522 299,817 733,241 698,933 3.74$

Outlying Metroplex 496 26,306,445 3.6% 0.9% 1,174,688 4.5% 4.2% -80,799 298,920 507,750 20,000 4.99$ Total DFW Market 7,864 593,553,272 6.2% 0.3% 38,118,962 6.4% 6.8% 9,007,678 21,937,046 26,596,647 17,712,767 4.41$


NOTE: Statistical set includes industrial properties 10,000 SF and up, excluding data centers. Big-Box is defined as warehouses 200,000 square feet and larger with 28’ clear. Non Big-Box includes all other warehouse / distribution properties. While CoStar attempts to provide the most accurate data at the end of every quarter, revisions are made throughout the year accounting for discrepancies in past reporting.






0%

1%

1%

2%

2%

3%

3%

4%

4%

5%

5%

-200

0

200

400

600

800

1,000

1,200

1,400

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Vaca

ncy

Rate

Thou

sand

s of

Squ

are

Feet

0%

2%

4%

6%

8%

10%

12%

14%

-1,000

-500

0

500

1,000

1,500

2,000

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Vaca

ncy

Rate

Thou

sand

s of

Squ

are

Feet

0%

2%

4%

6%

8%

10%

12%

14%

-5

0

5

10

15

20

25

30

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Vaca

ncy

Rate

Mill

ions

of S

quar

e Fe

et


FLEX





> Flex product makes up 13.5% of the total DFW industrial market, or 106 million square feet. Data Centers are excluded from flex product in this report.

> Vacancy rose 0.2% for flex product from Q2 2017 to 6.3% in Q3 2017. The vacancy rate is at the same point as at the end of 2016, after dipping into the low 6% range earlier this year. Of the markets with over 3 million square feet, East Dallas had the lowest vacancy rate at 2.4% and the North US 75 corridor had the highest at 10.4%.

> Net absorption for 2017 totaled 492,000 square feet — 40% of 2016’s total of 1.3 million square feet. This is the lowest yearly net absorption total since 2010 saw negative 300,000 square feet for the year.

> Ten properties were delivered in 2017 totaling 535,000 square feet. At the end of the year, 9 properties totaling 800,000 square feet were still under construction, and these properties were 81% leased.

> Overall the industrial market still appears strong, with vacancy dropping from 6.2% in Q3 to 5.9% in Q4. Vacancy is up 0.3% from Q4 2017, but this is slight given the amount of spec construction in the market.

> Net absorption for all industrial product types was 9.4 million square feet for the quarter and 23.7 million for the year. Although 2017’s absorption was 1.9 million behind the prior year, it was still the second highest year on record.

> In 2017, the industrial market delivered 125 properties totaling 28 million square feet. This is the highest square footage delivered for any year on record, surpassing the second-highest year (2008) by 4.8 million square feet. While 80% of the properties started construction as spec, buildings delivered in 2017 were 48% leased at the end of the year.

> Manufacturing space accounts for 101 million square feet in the DFW industrial market, or 12.5% of the total.

> In Q4 2017, net absorption for manufacturing space was 533,000 square feet. Major move-ins included Hayes & Stolz occupying its 144,000 square foot facility in Burleson and Firestone & Robertson Distilling Co moving into 100,000 square feet in Fort Worth -- both build-to-suit projects. Ecolab’s move-out from 102,000 square feet at 1801 Riverbend West offset these gains. For all of 2017, the manufacturing market saw total net absorption of 1.2 million square feet.

> Six manufacturing facilities delivered in 2017, totaling 890,000 square feet. At the end of the year there were four properties totaling 1.3 million square feet still under construction, and all of these properties are build-to-suits.




Total

Inventory

SF

Direct

Vacancy

Rate

Sublease

Vacancy

Rate

Total

Vacant

SF

Vacancy

Rate

Current

Vacancy

Rate

Prior Qtr

Net Abs

Current Qtr

SF

Net Abs

YTD

SF

New

Supply

YTD SF

Under

Construction

SF

Average

Rate

(NNN)

Manufacturing

00.210844,935844,9350%0.0%0.00%0.0%0.0950,741,19ecnaillA $

DFW Airport 20 2,913,618 0.0% 0.0% 0 0.0% 0.0% 0 13,404 0 31,000 7.50$

East Dallas 58 4,151,927 0.3% 0.0% 12,001 0.3% 0.3% -1 -12,001 0 0 4.75$

Far North I-35E Corridor 69 6,002,469 3.1% 0.6% 220,240 3.7% 4.1% 25,565 124,665 0 0 4.14$

Great Southwest 73 11,245,426 1.3% 0.0% 144,718 1.3% 3.9% 23,000 -61,502 0 1,000,000 N/A

Metropolitan / Addison 19 1,324,572 9.4% 0.0% 124,050 9.4% 6.9% -33,019 -99,250 0 0 4.96$

North Fort Worth 49 5,886,765 0.6% 0.0% 37,500 0.6% 1.7% 64,500 58,500 0 90,000 4.50$

North I-35E Corridor 114 7,565,749 1.4% 0.1% 112,365 1.5% 1.8% 22,496 -58,535 0 0 6.87$

North US 75 Corridor 48 10,433,691 3.1% 0.0% 323,969 3.1% 3.8% 68,659 107,681 40,000 0 10.00$


South Dallas 93 13,208,929 1.7% 0.0% 227,020 1.7% 1.9% 23,500 38,310 47,500 130,000 2.99$

South Fort Worth 105 11,037,412 2.0% 0.0% 226,144 2.0% 1.3% 13,500 164,406 119,000 0 4.83$

West I-30 Corridor 30 2,032,832 11.7% 0.0% 237,617 11.7% 11.7% 0 -106,513 0 0 2.75$

Outlying Metroplex 161 17,124,579 3.1% 0.0% 530,812 3.1% 3.3% 174,966 178,112 144,000 0 4.37$ Total DFW Market 921 100,635,350 2.3% 0.4% 2,729,607 2.7% 3.3% 532,636 1,221,152 889,948 1,251,000 4.52$

Flex

05.7000,260152,422180,732%8.61%3.0014,4%0.0%3.0256,334,193ecnaillA $

DFW Airport 216 8,340,274 9.7% 0.1% 819,133 9.8% 7.9% -163,913 -43,097 0 0 9.50$

East Dallas 206 5,056,788 2.4% 0.0% 123,274 2.4% 2.2% -10,175 -30,358 0 0 13.36$

Far North I-35E Corridor 304 10,558,910 8.3% 0.2% 896,489 8.5% 8.3% -18,870 274,241 343,283 470,000 9.65$

Great Southwest 328 9,444,038 6.3% 0.1% 598,399 6.3% 6.1% -26,121 81,759 11,000 0 8.64$

Metropolitan / Addison 236 8,386,918 6.7% 0.0% 558,645 6.7% 6.1% -51,154 133,623 0 0 9.90$

North Fort Worth 65 2,496,027 1.6% 0.0% 40,597 1.6% 1.2% -10,514 203,079 0 0 9.12$

North I-35E Corridor 725 19,816,462 4.3% 0.1% 875,217 4.4% 4.1% -42,071 28,190 15,000 0 12.19$

North US 75 Corridor 439 15,846,615 10.3% 0.2% 1,654,739 10.4% 10.5% 71,812 -215,980 68,000 190,000 9.69$

Northeast Dallas 320 8,700,808 5.2% 0.1% 460,169 5.3% 4.4% -76,799 -103,741 0 0 5.90$

South Dallas 138 2,911,669 2.0% 0.0% 57,215 2.0% 1.3% -19,412 -11,376 0 0 6.79$

South Fort Worth 339 9,397,785 4.3% 0.6% 459,422 4.9% 4.9% 18,873 18,107 18,600 0 7.74$

West I-30 Corridor 76 2,053,583 3.4% 0.0% 70,000 3.4% 0.0% -70,000 -36,400 0 0 N/A

Outlying Metroplex 79 1,657,177 6.5% 0.0% 107,096 6.5% 8.9% 40,505 53,299 79,475 80,000 11.22$ Total DFW Market 3,510 106,100,706 6.2% 0.1% 6,724,805 6.3% 6.1% -120,758 492,205 535,358 802,000 9.63$


251,224,2616,785,1431,118,3427,586%6.7%8.5588,022,2%0.0%8.5824,289,73812ecnaillA

DFW Airport 690 72,936,195 5.4% 0.2% 4,087,510 5.6% 5.9% 1,435,990 2,521,269 3,096,678 1,166,526

East Dallas 701 34,300,487 3.3% 0.0% 1,149,823 3.4% 3.9% 204,985 614,920 351,874 877,230

Far North I-35E Corridor 1,087 85,525,087 4.2% 0.2% 3,702,521 4.3% 4.8% 1,038,210 3,826,481 2,530,537 1,295,675

Great Southwest 1,412 111,720,168 8.2% 0.2% 9,341,374 8.4% 8.5% 1,964,144 3,955,229 7,258,192 3,227,650

Metropolitan / Addison 457 20,866,135 5.1% 0.0% 1,061,490 5.1% 5.5% 80,834 60,797 0 0

North Fort Worth 427 37,768,206 4.9% 0.0% 1,844,785 4.9% 4.3% 479,971 2,252,055 2,150,461 1,143,485

North I-35E Corridor 2,351 83,014,500 2.4% 0.1% 2,083,280 2.5% 2.9% 309,959 321,819 15,000 0

North US 75 Corridor 813 46,884,454 5.6% 0.2% 2,725,696 5.8% 5.9% 108,513 -144,538 148,750 392,270

Northeast Dallas 890 50,023,743 5.0% 1.9% 3,471,260 6.9% 7.1% 966,565 1,267,229 1,476,866 764,400

South Dallas 674 79,873,176 12.0% 0.0% 9,548,305 12.0% 13.5% 2,183,126 4,283,699 7,273,499 7,351,835

South Fort Worth 1,459 63,124,137 4.5% 0.2% 2,969,982 4.7% 4.0% 181,385 239,575 999,514 325,611

West I-30 Corridor 380 31,182,411 4.8% 0.2% 1,553,867 5.0% 3.8% -354,522 156,904 733,241 698,933




NOTE: Statistical set includes industrial properties 10,000 SF and up, excluding data centers. Big-Box is defined as warehouses 200,000 square feet and larger with 28’ clear. Non Big-Box includes all other warehouse / distribution properties. While CoStar attempts to provide the most accurate data at the end of every quarter, revisions are made throughout the year accounting for discrepancies in past reporting.

MANUFACTURING


FLEX



Wayfair 2820 N Interstate 35E South Dallas 874,566 Big-Box New Oct-17

Professional Packaging 1400 N highway 360 Great Southwest 349,421 Big-Box New Dec-17

Quality Logistics Systems 3601 Pinnacle Point Dr. West I-30 Corridor 165,000 Big-Box Renewal Dec-17

HD Supply* 240 Dividend Dr DFW Airport 207,002 Big-Box Renewal Dec-17

Dealer Tire 410 W Trinity Blvd Great Southwest 159,768 Non Big-Box New Dec-17

Image MicroSystems 4500 Cambridge Rd Great Southwest 159,068 Big-Box New Oct-17

Expediters 1101 Valley View Lane Great Southwest 132,400 Non Big-Box New Oct-17

Wizards of the Coast 925 W. North Carrier Pkwy Great Southwest 123,684 Non Big-Box Renewal Oct-17

SkyCam 2751 Northern Cross Blvd Alliance 74,623 Non Big-Box New Nov-17

DiCom 2205 Hutton Dr West I-30 Corridor 62,121 Non Big-Box New Nov-17

Estes 1415 S Loop 12 North I-35 E Corridor 46,660 Non Big-Box New Dec-17

Niagra Conservation 1200 Lakeside Pky Far North I-35E Corridor 41,202 Non Big-Box Renewal Oct-17

RPM Expedite 601 Westport Pky DFW Airport 36,619 Non Big-Box New Nov-17

Ferris Structure Inc. 4320 Marsh Ridge Rd Far North I-35E Corridor 13,439 Flex Sublease Nov-17

Sign Assign LLC 702 Shepherd Dr Northeast Dallas 7,980 Flex New Dec-18

Lease Comps Year-to-date leasing activity totaled 43.5 million square feet, down 27% from the prior year. Big-Box leasing made up 42% of the total, Non Big-Box Warehouse 40%, Flex 11%, and Manufacturing 7.5%.


2101 Reeves Pl South Fort Worth Dec-17 $25,000,000 301,500 $83 Big-Box Pure Industrial REIT

2101 Terminal Rd North Fort Worth Nov-17 $2,400,000 41,832 $57 Non Big-Box GT Industrial Properties

3151 Hailfax St North I-35E Corridor Oct-17 $2,200,000 47,089 $47 Non Big-Box Southern Leasing Company

1301 Apollo Rd North US 75 Corridor Oct-17 $3,400,000 82,960 $41 Non Big-Box Baker Triangle

825-831 E Highway 121 Far North I-35E Sep-17 $1,270,000 20,200 $63 Non Big-Box Mercer Company

1950 W Bardin Rd South Dallas Aug-17 $25,000,000 430,829 $58 Big-Box Flex-N-Gate

913 N Belt Line Rd North I-35E Corridor Jul-17 $1,100,000 26,040 $42 Non Big-Box ASDierolf Concrete

4005 Interstate 30 West I-30 Corridor Jul-17 $24,317,000 215,000 $113 Big-Box Lexington Realty Trust

4200-4202 Wiley Post Rd Metropolitan/Addison Jul-17 $1,400,000 30,000 $47 Flex Needham Roofing

500 Randall St Outlying Market Jul-17 $4,651,491 87,870 $53 Manufacturing Goff Capital Partners

5005 Samuell Blvd East Dallas Jun-17 $50,621,072 351,874 $144 Big-Box Monmouth RE Investment Corp.

Sales Comps Investment activity for 2017 stood at $1.5 billion, 9.6% behind the total for 2016. Quarterly volume was $294 million, significantly behind the first three quarters of 2017. Sales averaged $56 per square foot and cap rates were in the low 7s.




2101 Reeves Pl South Fort Worth Dec-17 $25,000,000 301,500 $83 Big-Box Pure Industrial REIT

2101 Terminal Rd North Fort Worth Nov-17 $2,400,000 41,832 $57 Non Big-Box GT Industrial Properties

3151 Hailfax St North I-35E Corridor Oct-17 $2,200,000 47,089 $47 Non Big-Box Southern Leasing Company

1301 Apollo Rd North US 75 Corridor Oct-17 $3,400,000 82,960 $41 Non Big-Box Baker Triangle



913 N Belt Line Rd North I-35E Corridor Jul-17 $1,100,000 26,040 $42 Non Big-Box ASDierolf Concrete


4200-4202 Wiley Post Rd Metropolitan/Addison Jul-17 $1,400,000 30,000 $47 Flex Needham Roofing



13 TOTAL 10K-50K SF

6 TOTAL 50K-100K SF




4 TOTAL 750K-1M SF

UNDER CONSTRUCTION

4 TOTAL 1M+ SF



NON BIG-BOX: 47%

FLEX: 13%

BIG-BOX: 27%

MANUFACTURING: 13%


1 MILLION + SF

9.9%VACANCY






750K-1M SF


500K-750K SF


200K-500K SF


100K-200K SF

NON BIG-BOX 793 107,572,959 6.1%

50K-100K SF

NON BIG-BOX 1,230 85,359,927 3.9%

10K-50K SF

NON BIG-BOX 5,151 117,781,126 3.1%


INDUSTRIALN

UM

BE

R O

F B

UIL

DIN

GS

BU

ILD

ING

SIZ

E (S

QU

AR

E F

EE

T)

106.1M SF

372.5M SF

221.1M SF

100.6M SF

6

5

4

1 3

1 20

11 8

1 5

1 6


CU

RR

ENT

QU

AR

TER BIG-BOX

4.3%VACANCY



NON BIG-BOX

6.3%VACANCY


$9.63 / -4.3%RENTAL RATE ANNUAL CHANGE

FLEX

2.7%VACANCY



MANUFACTURING


77

20

30

30

308080

820

820

820

DNT

DNT

LLT

LLT

45

45

75

75

1709

12

12

12

12

12

12

12

635

635

408

161

161

161

114

121

121

121

121

1212499

303

352

190

190

190

78

78

66

205

183

183

183

183

67

67

67

360

377

377

377

380

380

380

199

287

287

287B

287B

35

35E

35W

35E

35W

35E

35W

35E35W

30

30

35W

67

67

377

288

114

20

20635

20

20

20

287

81

175

26

20820

20

175

30

DNT

DNT

380

114

183

DENTON

GARLAND

360

360

190

635

8

6

7

4

13 3

1

12

2

9

14

115

10

14

14

14

35

35E

35W

35W

35W

35E

35W

35E35W

WEST TARRANT COUNTY

WEST DFWAIRPORT

UPPERGREAT

SOUTHWEST

ARLINGTON



FORT WORTH


SOUTHWEST TARRANT

RED BIRDAIRPORT



LOWERGREAT

SOUTHWEST

MANSFIELD


ALLEN / McKINNEY

PLANO

ROCKWALL


RICHARDSON

CENTRALEAST DALLAS

EAST DALLASMESQUITE

EAST DFWAIRPORT

LEWISVILLE




EAST HINES NORTH

NORTHTRINITY

WESTHINESNORTH

WEST BROOKHOLLOW



35E

EAST BROOKHOLLOW


BLDGS#

RBA(SF)

VacRate

ABS(YTD)

New Sply

UnderConst

Rate(NNN)

BLDGS#

RBA(SF)

VacRate

ABSYTD

New Sply

UnderConst

1 Alliance 170 35.4m 6.3% 449k 1m 2.4m $4.08 218 38m 5.8% 686k 1.6m 2.4m

2 DFW Airport 454 61.7m 5.3% 1.6m 3.1m 1.1m $4.36 690 72.9m 5.6% 1.4m 3.1m 1.2m

3 East Dallas 437 25.1m 4.0% 215k 352k 877k $4.50 701 34.3m 3.4% 205k 352k 877k

4 Far North I-35E Corridor 714 69m 3.7% 1m 2.2m 826k $4.76 1,087 85.5m 4.3% 1m 2.5m 1.3m

5 Great Southwest 1,011 91m 9.4% 2m 7.2m 2.2m $4.35 1,412 111.7m 8.4% 2m 7.3m 3.2m

6 Metropolitan-Addison 202 11.2m 3.4% 165k 0 0 $5.33 457 20.9m 5.1% 81k 0 0

7 North Fort Worth 313 29.4m 6.0% 426k 2.2m 1.1m $5.71 427 37.8m 4.9% 480k 2.2m 1.1m

8 North I-35E Corridor 1,512 55.6m 2.0% 330k 0 0 $6.18 2,351 83m 2.5% 310k 15k 0

9 North US 75 Corridor 326 20.6m 3.6% -32k 41k 202k $6.08 813 46.9m 5.8% 109k 149k 392k

10 Northeast Dallas 497 34.8m 7.1% 894k 1.5m 764k $4.22 890 50m 6.9% 967k 1.5m 764k

11 South Dallas 443 63.8m 14.5% 2.2m 7.2m 7.2m $3.57 674 79.9m 12.0% 2.2m 7.3m 7.4m

12 South Fort Worth 1,015 42.7m 5.4% 149k 862k 326k $5.77 1,459 63.1m 4.7% 181k 1000k 326k

13 West I-30 Corridor 274 27.1m 4.6% -285k 733k 699k $3.74 380 31.2m 5.0% -355k 733k 699k

14 Outlying Market 496 26.3m 4.5% -81k 508k 20k $4.99 736 45.1m 4.0% 135k 731k 100kTotal DFW Market 7,864 593.6m 6.4% 9m 26.6m 17.7m $4.41 12,295 800.3m 5.9% 9.4m 28m 19.8m

All Industrial: WH/DIST (Big-Box & Non Big-Box), MFG & FlexWarehouse/Distribution: Big-Box and Non Big-Box

Submarket

8




RESEARCHERS:

MIKE OTILLIO KARI BEETSDirector of Research Research AssociateDIRECT +1 214 217 1232 DIRECT +1 214 217 [email protected] [email protected]




AnnualChange

Quarterly Change

Quarterly Forecast*

Vacancy

Net Absorption

Under Construction

*Projected

Warehouse/Distribution Industrial



Vacancy Rate 10.7% 4.7% 6.9% 6.3% 3.0%

Quarterly Change 0.5% 0.0% -0.2% 0.1% -0.2%

Absorption YTD(Thousands Square Feet) 9,574 2,789 12,363 556 978

New Supply YTD(Thousands Square Feet) 14,419 4,449 18,867 434 579

Under Construction(Thousands Square Feet) 17,433 1,799 19,233 842 1,405


Average Quoted $3.78 $5.01 $4.34 $9.50 $4.71

Quarterly Change -1.6% 1.6% -1.6% 0.5% -2.1%

Year-Over-Year Change 2.9% 3.8% 0.7% -1.9% 6.2%

Big-Box seeking large tenants propels DFW industrial marketMIKE OTILLIO Director of Market ResearchKARI BEETS Research AssociateA strong economy continues to propel Dallas-Fort Worth’s industrial market, and consumers’ demand for faster delivery has caused businesses to seek efficiencies throughout their supply chain. Amazon signed the two largest deals this quarter at 920,000 and 604,000 square feet. Net absorption was a healthy 4.4 million square feet, slightly slower than Q2, but stronger than Q1 2017. Diverse companies led to the absorption total; for example, Campbell Soup Co. had the largest move-in to 577,000 square feet in Fort Worth, and S&S Activewear took 500,000 square feet at 35/820 @ Mercantile Center.

Developers continue to show confidence that DFW will be in demand, breaking ground on 4.4 million square feet in Q2 2017. This pace is slower than in 2016, which averaged 6.9 million per quarter, indicating that developers are showing healthy restraint. Landlords continue their “whale-hunting”, seeking large tenants to fill half or all of large buildings rather than dividing space for smaller 100,000 to 200,000 square foot tenants.

The surge in speculative development finally started to show in the vacancy rate in Q1 2017, but the rate improved slightly since then, standing at 6.3% in Q3 2017. Big-Box vacancy is up 1.7% year-over-year at 10.7% in Q3. South Dallas had the highest overall vacancy rate of 13.5% as five properties over 500,000 square feet that delivered in 2017 sit entirely vacant.

Transaction volume for the market continued at a similar pace. The total for the 12-months prior to the end of Q3 2017 stood at 1.7 billion, slightly higher than the total in 2016.

OutlookDevelopers will continue to break ground on new product, but the pace of construction will slow slightly, as the abundance of new product has affected the overall vacancy rate. Speculative construction continues to dominate new builds — 82% of properties delivered in Q3 started speculative and were 57% leased at the end of the quarter. For Big-Box properties, 32 of the 36 properties under construction were speculative and were about 30% pre-leased.

While overall rental rates are up for Big-Box product, markets with high vacancy levels such as South Dallas and Alliance may see rates decline slightly or landlords offer more free rent to make these outskirts locations more appealing than tighter infill markets.

Starting this quarter, Colliers Research will segment industrial product into three categories: Warehouse/ Distribution (which is comprised of Big-Box and Non Big-Box Industrial), Manufacturing, and Flex. This facilitates more meaningful comparisons of vacancy and rental rate. The All Industrial summary is comprised of Warehouse/Distribution, Manufacturing, and Flex.


0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

-5,000,000

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Vaca

ncy

Rate

Squa

re F

eet

Warehouse /Distribution: BIG BOX & NON BIG BOX

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

20.0%

22.0%

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

16,000,000

18,000,000

20,000,000

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Vaca

ncy

Rate

Squa

re F

eet

Warehouse & Distribution: BIG BOX ONLY

New Supply Absorption Vacancy

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

-6,000,000

-4,000,000

-2,000,000

0

2,000,000

4,000,000

6,000,000

8,000,000

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Vaca

ncy

Rate

Squa

re F

eet

Warehouse/Distribution - NON BIG BOX






> Big-Box product makes up the majority of warehouse/distribution absorption – with Big-Box absorbing 2.9 million square feet compared with 1.3 million for Non Big-Box.

> New deliveries exceeded net absorption by 1.6 million square feet in Q3. So far in 2017, Big-Box deliveries have totaled 14.4 million square feet and net absorption stands at 9.6 million square feet, a difference of almost 5 million square feet.

> Rental rates for Big-Box product decreased slightly due to increasing vacancy, rates fell 1.6% to $3.79 triple net. The Far North I-35E corridor, which includes North Stemmons and Lewisville, had the highest rental rates at $4.44 triple net. The West I-30 corridor posted the lowest average rates at $3.20 triple net.

> Non Big-Box warehouse/distribution product accounts for 64% of total warehouse product. In Q2 2017, it accounted for only 31% of the quarterly net absorption.

> Vacancy in the Non Big-Box sector decreased 0.1% to 7.1% for Q3, and has held steady at 4.8%, which is 9.5% below the Big-Box vacancy rate. In Q3, Northeast Dallas/Garland had the highest vacancy rate for this product type at 7.4%

> Because leased spaces and buildings are smaller, per square foot rental rates are higher, averaging $5.01 triple net for Q2 2017, which is more than $1 per square foot higher than Big-Box rates. The North I-35E Corridor had the highest average rates for this product at $6.15 triple net.

> Warehouse/distribution products are divided into Big-Box and Non Big-Box. Big-Box distribution centers larger than 200,000 square feet with a clear height greater than 28’. Non Big-Box includes everything else, including properties over 200,000 square feet that have a clear height under 28’. Because of the volume, Big-Box tend to have lower rental rates and more swings in vacancy rates.

> Total warehouse vacancy increased 0.2% from Q2, and was up 0.8% year-over-year. South Dallas had the highest vacancy rate at 16.4%, and the North I-35E Corridor was the tightest market with only 1,444,607 square feet available, a 2.6% vacancy rate.

> Activity in warehouse/distribution was steady, with 4.2 million square feet absorbed in Q2. However, year-to-date net absorption is about 28% lower than absorption through Q3 2016.

WAREHOUSE / DISTRIBUTION BIG-BOX

WAREHOUSE / DISTRIBUTION NON BIG-BOX

WAREHOUSE / DISTRIBUTION ALL



RENT


Total

Inventory

SF

Direct

Vacancy

Rate

Sublease

Vacancy

Rate

Total

Vacant

SF

Vacancy

Rate

Current

Vacancy

Rate

Prior Qtr

Net Abs

Current Qtr

SF

Net Abs

YTD

SF

New

Supply

YTD SF

Under

Construction

SF

Average

Rate

(NNN)

Warehouse & Distribution: BIG BOX ONLY

16.3251,041,2262,849082,655,1082,008%1.31%3.01165,130,3%0.0%3.01445,533,9255ecnaillA $

DFW Airport 76 31,458,709 6.6% 0.2% 2,154,592 6.8% 4.9% -214,284 -346,711 0 1,432,256 3.77$

East Dallas 18 7,187,627 8.0% 0.0% 576,262 8.0% 8.4% 27,407 44,488 0 351,874 3.49$

Far North I-35E Corridor 57 22,758,843 5.1% 0.1% 1,171,362 5.1% 8.1% 678,183 1,528,183 850,000 850,792 4.46$

Great Southwest 84 31,470,260 15.5% 0.4% 4,993,140 15.9% 16.7% 1,220,919 1,701,253 3,619,760 2,595,737 4.11$


North Fort Worth 21 9,415,264 1.4% 0.0% 128,400 1.4% 6.9% 520,762 482,832 0 1,969,543 3.90$


North US 75 Corridor 7 3,207,764 0.0% 0.0% 0 0.0% 0.0% 0 0 0 0 N/A

Northeast Dallas / Garland 21 6,959,429 6.5% 0.0% 453,955 6.5% 6.0% -39,440 -136,670 0 1,134,041 3.88$

South Dallas 75 39,192,032 19.6% 0.1% 7,705,992 19.7% 17.6% 258,008 1,608,243 3,758,977 5,954,695 3.54$

South Fort Worth 17 7,409,583 10.9% 0.0% 805,625 10.9% 7.6% -240,000 -504,125 0 488,564 2.25$

West I-30 Corridor 34 14,526,769 2.6% 0.0% 383,109 2.6% 6.2% 518,241 720,378 518,241 604,722 N/A

Outlying Metroplex 10 8,626,457 0.0% 0.0% 0 0.0% 0.0% 0 0 0 0 N/ATotal DFW Market 478 212,292,740 10.0% 0.1% 21,403,998 10.1% 10.5% 3,530,076 6,654,151 9,695,240 17,522,376 3.83$ Warehouse & Distribution: NON BIG BOX

90.5609,311000,03664,732323,75%3.6%9.5799,263%0.0%9.5312,281,6901ecnaillA $

DFW Airport 372 28,345,315 7.2% 0.2% 2,122,682 7.5% 7.0% -136,732 314,572 1,148,870 603,790 4.73$

East Dallas 421 18,365,044 3.0% 0.1% 567,962 3.1% 3.4% 59,635 119,241 0 0 4.37$

Far North I-35E Corridor 648 45,152,069 3.9% 0.3% 1,881,319 4.2% 4.3% 271,941 549,669 449,000 429,081 4.98$

Great Southwest 919 57,065,329 5.3% 0.4% 3,288,866 5.8% 5.0% -283,516 -428,733 332,852 707,721 4.14$


North Fort Worth 289 19,137,923 7.6% 0.1% 1,470,641 7.7% 6.7% -193,053 -231,744 46,826 113,797 4.84$


North US 75 Corridor 320 17,703,895 3.6% 0.1% 653,541 3.7% 2.7% -159,732 38,808 23,750 17,000 5.94$

Northeast Dallas / Garland 470 27,527,138 6.1% 1.5% 2,099,729 7.6% 9.9% 637,037 242,287 269,350 54,000 4.21$

South Dallas 360 21,514,296 5.5% 0.1% 1,194,680 5.6% 5.7% 40,599 -87,818 266,984 0 4.24$

South Fort Worth 1,002 37,186,166 3.2% 0.1% 1,225,463 3.3% 3.5% 82,744 191,746 16,250 35,600 5.10$

West I-30 Corridor 238 12,145,804 2.3% 0.0% 283,610 2.3% 1.7% -78,302 154,170 215,000 187,518 5.30$

Outlying Metroplex 477 17,026,616 4.1% 1.4% 936,676 5.5% 7.3% 698,133 486,882 471,000 57,550 5.12$ Total DFW Market 7,334 373,597,467 4.5% 0.3% 17,885,621 4.8% 4.8% 944,672 1,653,861 3,269,882 2,319,963 4.93$ Warehouse & Distribution: BIG BOX & NON BIG BOX

98.3850,452,2262,879647,397,1306,758%9.11%6.9855,493,3%0.0%6.9757,715,53461ecnaillA $

DFW Airport 448 59,804,024 6.9% 0.2% 4,277,274 7.2% 5.9% -351,016 -32,139 1,148,870 2,036,046 4.17$

East Dallas 439 25,552,671 4.4% 0.0% 1,144,224 4.5% 4.8% 87,042 163,729 0 351,874 4.07$

Far North I-35E Corridor 705 67,910,912 4.3% 0.2% 3,052,681 4.5% 5.6% 950,124 2,077,852 1,299,000 1,279,873 5.09$

Great Southwest 1,003 88,535,589 8.9% 0.4% 8,282,006 9.4% 9.0% 937,403 1,272,520 3,952,612 3,303,458 4.12$


North Fort Worth 310 28,553,187 5.6% 0.0% 1,599,041 5.6% 6.7% 327,709 251,088 46,826 2,083,340 4.39$


North US 75 Corridor 327 20,911,659 3.1% 0.1% 653,541 3.1% 2.3% -159,732 38,808 23,750 17,000 5.94$

Northeast Dallas / Garland 491 34,486,567 6.2% 1.2% 2,553,684 7.4% 9.1% 597,597 105,617 269,350 1,188,041 4.08$

South Dallas 435 60,706,328 14.6% 0.1% 8,900,672 14.7% 13.3% 298,607 1,520,425 4,025,961 5,954,695 3.58$

South Fort Worth 1,019 44,595,749 4.5% 0.1% 2,031,088 4.6% 4.2% -157,256 -312,379 16,250 524,164 5.02$

West I-30 Corridor 272 26,672,573 2.5% 0.0% 666,719 2.5% 4.1% 439,939 874,548 733,241 792,240 5.30$

Outlying Metroplex 487 25,653,073 2.7% 0.9% 936,676 3.7% 4.8% 698,133 486,882 471,000 57,550 5.12$

Total DFW Market 7,812 585,890,207 6.5% 0.2% 39,289,619 6.7% 6.9% 4,474,748 8,308,012 12,965,122 19,842,339 4.39$


NOTE: Statistical set includes industrial properties 10,000 SF and up, excluding data centers. Big Box is defined as warehouses 200,000 square feet and larger with 28’ clear. Non-Big Box includes all other warehouse / distribution properties. While CoStar attempts to provide the most accurate data at the end of every quarter, revisions are made throughout the year accounting for discrepancies in past reporting.

Market Trends & StatsWAREHOUSE / DISTRIBUTION BIG-BOX

WAREHOUSE / DISTRIBUTION NON BIG-BOX

WAREHOUSE / DISTRIBUTION ALL


0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

-200,000

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Vaca

ncy

Rate

Squa

re F

eet

Manufacturing


0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

-500,000

0

500,000

1,000,000

1,500,000

2,000,000

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Vaca

ncy

Rate

Squa

re F

eet

Flex


0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

-5,000,000

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Vaca

ncy

Rate

Squa

re F

eet

All Industrial: Warehouse&Distributio(BIG BOX&NON BIG BOX) MFG and Flex



FLEX

ALL INDUSTRIAL: BIG-BOX, NON BIG-BOX, WAREHOUSE & DISTRIBUTION, MANUFACTURING, AND FLEX




> Manufacturing space accounts for 100 million square feet, 12.5%, of the total DFW industrial market. Because of the large amount of owner occupied manufacturing space, historical vacancy rates have averaged in the 3-4% range. For Q3 2017, manufacturing vacancy stood at 3.0%.

> Year-to-date absorption for manufacturing space stood at 977,556 square feet through the first three quarters. Major move-ins include Medicore taking 114,432 square feet at 4717 Plano Pkwy and several 40,000-50,000 square foot tenants. These gains were offset by a 106,500 square foot move-out at 4012 W Illinois Ave.

> Four manufacturing properties have delivered so far in 2017 – the 540,000 square foot Farmer Brothers Coffee headquarters, a 47,500 square foot building for Sew-Eurodrive, a 19,000 square foot facility for Radio Controls Limited in Southwest Tarrant County, and a 40,000 square foot facility at 11 Prestige Circle in McKinney that was 25% leased.

> Flex product makes up 13.5% of the total DFW industrial market, or 107 million square feet. Data Centers are excluded from flex product in this report.

> The vacancy rate for flex product has been steadily dropping since its peak at 12% in 2010. In Q3 2017, flex vacancy stood at 6.3%, a slight rise from 6.2% in Q2, but well below a year prior where vacancy stood at 6.7%. Space is especially tight in North Fort Worth and East Dallas, which have a 1.2% and 1.3% vacancy rate, respectively. All flex space in the West I-30 Corridor’s 2 million square feet is fully occupied.

> Despite low vacancy and rising rent, flex construction has been limited over the past few years. So far in 2017, seven properties totaling 433,000 square feet have been delivered. Two of these properties were build-to-suits and five were speculative.

> The overall industrial market continues to be strong, with a 6.3% vacancy rate. Vacancy rose a marginal 0.1% from the prior quarter and is up 0.5% from Q3 2016.

> Over 21 million square feet of total industrial product was under construction at the end of the quarter. The average square footage of a property under construction was 290,000 square feet, up significantly from 2009-2010 when under construction properties averaged under 100,000 square feet. This shows that developers continue to favor Big-Box product.

> Year-to-date net absorption of 13.9 million square feet significantly lags net absorption for this point in 2016 which was 18.5 million square feet. Even though there have been several large leases signed this quarter that could be occupied by the end of the year, Q4 2017 would have to reach 11 million square feet of absorption to exceed 2016’s total, a number to which the DFW market has never come close.



RENT


Total

Inventory

SF

Direct

Vacancy

Rate

Sublease

Vacancy

Rate

Total

Vacant

SF

Vacancy

Rate

Current

Vacancy

Rate

Prior Qtr

Net Abs

Current Qtr

SF

Net Abs

YTD

SF

New

Supply

YTD SF

Under

Construction

SF

Average

Rate

(NNN)

Manufacturing

00.210844,935844,935304,03%7.2%0.00%0.0%0.0944,511,19ecnaillA $

DFW Airport 19 2,900,214 0.6% 0.0% 17,694 0.6% 0.0% -17,694 -17,694 0 31,000 7.50$

East Dallas 59 4,151,474 0.4% 0.0% 14,610 0.4% 0.4% 1,548 -14,610 0 0 4.75$

Far North I-35E Corridor 68 5,881,691 5.6% 0.0% 331,377 5.6% 6.3% 40,731 13,528 0 0 4.20$

Great Southwest 74 10,312,122 1.7% 0.0% 176,118 1.7% 3.3% 161,800 192,098 0 1,200,000 4.35$

Metropolitan / Addison 19 1,324,572 3.0% 0.0% 39,097 3.0% 1.9% -14,297 -14,297 0 0 N/A

North Fort Worth 49 5,886,765 1.6% 1.0% 152,400 2.6% 2.5% -6,000 -56,400 0 0 5.00$

North I-35E Corridor 116 7,631,513 2.3% 0.0% 177,699 2.3% 1.9% -35,159 -123,869 0 0 6.60$

North US 75 Corridor 48 10,433,691 4.0% 0.0% 421,650 4.0% 3.8% 10,000 10,000 40,000 0 10.10$

Northeast Dallas / Garland 71 6,310,545 5.6% 5.4% 696,648 11.0% 12.0% 62,991 9,750 0 0 4.75$

South Dallas 92 13,161,429 1.8% 0.0% 231,230 1.8% 1.7% -10,200 -13,400 0 177,500 3.34$

South Fort Worth 102 10,939,923 1.7% 0.0% 188,867 1.7% 3.3% 167,607 84,683 0 119,000 4.53$

West I-30 Corridor 29 2,048,108 11.6% 0.0% 237,617 11.6% 14.1% 52,138 -1,013 0 0 2.50$

Outlying Metroplex 155 16,069,911 3.6% 0.0% 572,015 3.6% 3.7% 23,458 -9,087 0 144,000 4.49$

Total DFW Market 910 98,167,407 2.9% 0.4% 3,257,022 3.3% 3.8% 467,326 487,337 579,448 1,671,500 4.58$ Flex

29.700678,23-096,53-%8.41%1.71735,162%7.31%4.3614,725,104ecnaillA $

DFW Airport 219 8,341,621 7.9% 0.2% 678,717 8.1% 9.8% 141,215 105,038 0 0 9.37$

East Dallas 208 5,085,688 1.5% 0.0% 77,644 1.5% 2.0% 22,808 36,139 0 0 12.26$

Far North I-35E Corridor 305 10,604,342 9.4% 0.3% 1,038,841 9.8% 7.4% -255,578 147,200 343,283 470,000 8.88$

Great Southwest 331 9,547,319 6.2% 0.2% 606,405 6.4% 6.2% -8,792 73,753 11,000 0 7.90$


North Fort Worth 66 2,508,027 1.1% 0.0% 27,842 1.1% 7.0% 148,600 224,834 0 0 8.84$

North I-35E Corridor 728 19,917,895 4.1% 0.1% 837,976 4.2% 4.0% -31,840 69,495 0 15,000 10.85$

North US 75 Corridor 437 15,945,268 9.8% 0.1% 1,576,975 9.9% 8.7% -191,447 -174,656 0 258,000 9.16$

Northeast Dallas / Garland 321 8,921,579 3.6% 0.3% 350,917 3.9% 4.3% 36,446 5,511 0 0 6.98$

South Dallas 136 2,865,245 1.5% 0.0% 42,145 1.5% 1.6% 2,918 2,794 0 0 7.74$

South Fort Worth 339 9,452,183 3.3% 0.5% 361,411 3.8% 4.1% 22,862 23,676 0 0 8.86$

West I-30 Corridor 76 2,053,583 4.2% 0.0% 87,000 4.2% 0.5% -76,600 -53,400 0 0 12.00$

Outlying Metroplex 77 1,621,054 12.3% 0.0% 200,063 12.3% 11.2% -6,130 -24,093 79,250 80,000 12.02$ Total DFW Market 3,521 106,914,006 6.0% 0.4% 6,828,220 6.4% 6.2% -162,978 504,136 433,533 823,000 9.51$ All Industrial: Warehouse & Distribution (BIG BOX and NON BIG BOX), Manufacturing and Flex

850,452,2017,715,1813,003,2613,258%7.11%6.9590,656,3%5.0%0.9226,061,83312ecnaillA

DFW Airport 686 71,045,859 6.8% 0.2% 4,973,685 7.0% 6.1% -227,495 55,205 1,148,870 2,067,046

East Dallas 706 34,789,833 3.5% 0.0% 1,236,478 3.6% 3.9% 111,398 185,258 0 351,874

Far North I-35E Corridor 1,078 84,396,945 5.0% 0.2% 4,422,899 5.2% 5.9% 735,277 2,238,580 1,642,283 1,749,873

Great Southwest 1,408 108,395,030 8.0% 0.4% 9,064,529 8.4% 8.2% 1,090,411 1,538,371 3,963,612 4,503,458

Metropolitan / Addison 459 21,109,190 6.1% 0.2% 1,343,200 6.4% 5.9% -97,530 -116,413 0 0

North Fort Worth 425 36,947,979 4.6% 0.2% 1,779,283 4.8% 6.1% 470,309 419,522 46,826 2,083,340

North I-35E Corridor 2,354 83,277,694 2.6% 0.0% 2,205,574 2.6% 2.7% 33,079 215,778 0 15,000

North US 75 Corridor 812 47,290,618 5.5% 0.1% 2,652,166 5.6% 4.8% -341,179 -125,848 63,750 275,000

Northeast Dallas / Garland 883 49,718,691 5.6% 1.6% 3,601,249 7.2% 8.6% 697,034 120,878 269,350 1,188,041

South Dallas 663 76,733,002 11.9% 0.1% 9,174,047 12.0% 10.8% 291,325 1,398,019 4,025,961 6,132,195

South Fort Worth 1,460 64,987,855 3.9% 0.1% 2,581,366 4.0% 4.0% 33,213 -204,020 16,250 643,164

West I-30 Corridor 377 30,774,264 3.2% 0.0% 991,336 3.2% 4.6% 415,477 820,135 733,241 792,240


NOITCURTSNOCNOITPROSBA TENYCNACAVSEITREPORP GNITSIXEMarket Trends & Stats

NOTE: Statistical set includes industrial properties 10,000 SF and up, excluding data centers. Big Box is defined as warehouses 200,000 square feet and larger with 28’ clear. Non-Big Box includes all other warehouse / distribution properties. While CoStar attempts to provide the most accurate data at the end of every quarter, revisions are made throughout the year accounting for discrepancies in past reporting.

MANUFACTURING

ALL INDUSTRIAL: BIG-BOX, NON BIG-BOX, WAREHOUSE & DISTRIBUTION, MANUFACTURING, AND FLEX

FLEX



Amazon 3350 Altamoore Dr SE Dallas/I-45 Ind 920,275 Big-Box New Aug 2017

Amazon 944 W Sandy Lake Rd E DFW Air/Las Colinas Ind 604,800 Big-Box New Sep 2017

XPO Logistics* 400 Dividend Dr E DFW Air/Las Colinas Ind 263,625 Big-Box New Aug 2017

Biagi Brothers 605 110th St Lower Great Southwest Ind 179,875 Non Big-Box Renewal Sep 2017

The Hillman Group, Inc. 514 Bennett Ln Lewisville Ind 165,705 Big-Box New Sep 2017

SWS Re-Distribution Company, Inc. 1440 Lemay Dr N Stemmons/Valwood Ind 127,506 Non Big-Box Renewal Jul 2017

Erect-A-Line 3912 W Illinois Ave Eastern Lonestar/Tpke Ind 113,260 Non Big-Box New Jul 2017

Custom Assembly Inc 1228 Crowley Cir N Stemmons/Valwood Ind 110,700 Non Big-Box Renewal Sep 2017

Iron Grip 3400 Northern Cross Blvd Meacham Fld/Fossil Cr Ind 96,000 Manufacturing New Sep 2017

Pentair* 1002 E Cleveland Rd SE Dallas/I-45 Ind 83,220 Big-Box New Aug 2017

Best Buy Warehousing Logistics* 9010 N Royal Ln E DFW Air/Las Colinas Ind 68,839 Non Big-Box Renewal Aug 2017

Daryl Flood 204 Airline Dr E DFW Air/Las Colinas Ind 61,335 Big-Box New Aug 2017

International Flavors & Fragrances Inc. 1505 Luna Rd N Stemmons/Valwood Ind 16,800 Flex New Sep 2017

L&B 12801 N Stemmons Fwy N Stemmons/Valwood Ind 14,200 Flex New Sep 2017

SaladMaster 4300 Amon Carter Blvd Upper Great Southwest Ind 13,495 Flex New Aug 2017

Lease Comps Year-to-date leasing activity was down 32% from the same time period in 2016. Leasing activity in Q3 was approximately 7.5 million square feet, while year-to-date activity stands at 30.6 million square feet.




913 N Belt Line Rd North I-35E Corridor Jul-17 $1,100,000 26,040 $42 Non Big-Box Asdierolf Concrete


4200-4202 Wiley Post Rd Metropolitan/Addison Ind Jul-17 $1,400,000 30,000 $47 Flex Needham Roofing



634-640 107th St Great Southwest Jun-17 $4,000,000 72,900 $55 Non Big-Box Stonelake Capital Partners

201 S Interstate 45 South Dallas Jun-17 $42,000,000 758,922 $55 Big-Box Pure Industrial Real Estate Trust

8901 Forney Rd East Dallas Jun-17 $14,400,000 419,626 $34 Big-Box Dalfen America Corp

1920 Hutton Ct* Far North I-35E Corridor May-17 $3,850,000 52,613 $73 Non Big-Box Holt Lundsford Commercial

Sales Comps Investment activity through Q3 2017 is slightly ahead of where it was through the first three quarters of the prior year. Activity stood at 357 million for the quarter and 1.2 billion year-to-date. Sales averaged about $60 psf, down slightly from averages in the $70s for 2016.





Amazon 3350 Altamoore Dr SE Dallas/I-45 Ind 920,275 Big-Box New Aug 2017

Amazon 944 W Sandy Lake Rd E DFW Air/Las Colinas Ind 604,800 Big-Box New Sep 2017

XPO Logistics* 400 Dividend Dr E DFW Air/Las Colinas Ind 263,625 Big-Box New Aug 2017

Biagi Brothers 605 110th St Lower Great Southwest Ind 179,875 Non Big-Box Renewal Sep 2017

The Hillman Group, Inc. 514 Bennett Ln Lewisville Ind 165,705 Big-Box New Sep 2017

SWS Re-Distribution Company, Inc. 1440 Lemay Dr N Stemmons/Valwood Ind 127,506 Non Big-Box Renewal Jul 2017

Erect-A-Line 3912 W Illinois Ave Eastern Lonestar/Tpke Ind 113,260 Non Big-Box New Jul 2017

Custom Assembly Inc 1228 Crowley Cir N Stemmons/Valwood Ind 110,700 Non Big-Box Renewal Sep 2017

Iron Grip 3400 Northern Cross Blvd Meacham Fld/Fossil Cr Ind 96,000 Manufacturing New Sep 2017

Pentair* 1002 E Cleveland Rd SE Dallas/I-45 Ind 83,220 Big-Box New Aug 2017

Best Buy Warehousing Logistics* 9010 N Royal Ln E DFW Air/Las Colinas Ind 68,839 Non Big-Box Renewal Aug 2017

Daryl Flood 204 Airline Dr E DFW Air/Las Colinas Ind 61,335 Big-Box New Aug 2017

International Flavors & Fragrances Inc. 1505 Luna Rd N Stemmons/Valwood Ind 16,800 Flex New Sep 2017

L&B 12801 N Stemmons Fwy N Stemmons/Valwood Ind 14,200 Flex New Sep 2017

SaladMaster 4300 Amon Carter Blvd Upper Great Southwest Ind 13,495 Flex New Aug 2017

16 TOTAL 10K-50K SF

7 TOTAL 50K-100K SF




4 TOTAL 750K-1M SF

UNDER CONSTRUCTION

5 TOTAL 1M+ SF



NON BIG-BOX: 47%

FLEX: 13%

BIG-BOX: 27%

MANUFACTURING: 13%


1 MILLION + SF

10.7%VACANCY






750K-1M SF


500K-750K SF


200K-500K SF


100K-200K SF

NON BIG-BOX 797 108,094,920 6.3%

50K-100K SF

NON BIG-BOX 1,225 85,019,224 4.2%

10K-50K SF

NON BIG-BOX 5,124 117,420,266 3.1%


INDUSTRIALN

UM

BE

R O

F B

UIL

DIN

GS

BU

ILD

ING

SIZ

E (S

QU

AR

E F

EE

T)

107M SF

372M SF

213M SF99M SF

6

6

4

1 4

1 22

31 9

2 5

1 9

BIG-BOX NON BIG BOXFLEX MANUFACTURING

CU

RR

ENT

RAT

ES

BIG-BOX

4.7%VACANCY



NON BIG-BOX

6.3%VACANCY



FLEX

3.0%VACANCY



MANUFACTURING


77

20

30

30

308080

820

820

820

DNT

DNT

LLT

LLT

45

45

75

75

1709

12

12

12

12

12

12

12

635

635

408

161

161

161

114

121

121

121

121

1212499

303

352

190

190

190

78

78

66

205

183

183

183

183

67

67

67

360

377

377

377

380

380

380

199

287

287

287B

287B

35

35E

35W

35E

35W

35E

35W

35E35W

30

30

35W

67

67

377

288

114

20

20635

20

20

20

287

81

175

26

20820

20

175

30

DNT

DNT

380

114

183

DENTON

GARLAND

360

360

190

635

8

6

7

4

13 3

1

12

2

9

14

115

10

14

14

14

35

35E

35W

35W

35W

35E

35W

35E35W

WEST TARRANT COUNTY

WEST DFWAIRPORT

UPPERGREAT

SOUTHWEST

ARLINGTON



FORT WORTH


SOUTHWEST TARRANT

RED BIRDAIRPORT



LOWERGREAT

SOUTHWEST

MANSFIELD


ALLEN / McKINNEY

PLANO

ROCKWALL


RICHARDSON

CENTRALEAST DALLAS

EAST DALLASMESQUITE

EAST DFWAIRPORT

LEWISVILLE




EAST HINES NORTH

NORTHTRINITY

WESTHINESNORTH

WEST BROOKHOLLOW



35E

EAST BROOKHOLLOW


BLDGS#

RBA(SF)

VacRate

ABS(YTD)

New Sply

UnderConst

Rate(NNN)

BLDGS#

RBA(SF)

VacRate

ABSYTD

New Sply

UnderConst

1 Alliance 168 35.4m 7.5% 760k 1m 2.2m $3.89 217 38.1m 7.8% 668k 1.6m 2.2m

2 DFW Airport 451 60.3m 5.9% 1.1m 1.8m 2.4m $4.35 688 71.5m 5.9% 1.1m 1.8m 2.4m

3 East Dallas 438 25.1m 4.9% 285k 352k 0 $4.40 705 34.4m 4.0% 244k 352k 0

4 Far North I-35E 710 68.2m 4.3% 293k 1.5m 1.2m $4.82 1,081 84.6m 4.8% 526k 1.8m 1.7m

5 Great Southwest 1,004 88.8m 10.0% 127k 4.8m 4m $4.17 1,407 109.7m 8.8% 169k 4.8m 5m

6 Metropolitan-Addison 201 11.1m 4.9% 64k 0 0 $4.78 458 21m 5.9% 96k 0 0

7 North Fort Worth 311 28.7m 5.4% 1.3m 1.5m 869k $4.83 425 37.1m 4.6% 1.4m 1.5m 869k

8 North I-35E Corridor 1,509 55.5m 2.6% -206k 0 0 $6.15 2,351 83m 2.9% -192k 0 15k

9 North US 75 Corridor 325 20.6m 3.5% -57k 24k 17k $5.64 810 47.1m 5.9% -154k 64k 275k

10 Northeast Dallas 492 33.5m 6.8% 92k 269k 2m $4.12 885 49m 6.8% 90k 269k 2m

11 South Dallas 441 62.7m 16.5% 672k 6.1m 5.7m $3.57 670 78.8m 13.5% 706k 6.2m 5.8m

12 South Fort Worth 1,012 42.1m 4.6% -53k 16k 524k $6.01 1,457 62.5m 4.1% -82k 35k 643k

13 West I-30 Corridor 274 27.1m 4.0% -114k 1m 510k $4.19 380 31.2m 4.2% -220k 1m 510k

14 Outlying Market 493 26m 3.9% -36k 498k 20k $4.97 727 43.7m 3.9% 42k 577k 244kTotal DFW Market 7,829 585.1m 6.9% 4.2m 18.9m 19.2m $4.34 12,261 791.6m 6.3% 4.4m 19.9m 21.5m

Warehouse/Distribution: Big-Box and Non Big-Box

Submarket

All Industrial: WH/DIST (Big-Box & Non Big-Box), MFG & Flex

8




RESEARCHERS:

MIKE OTILLIO KARI BEETSDirector of Research Research AssociateDIRECT +1 214 217 1232 DIRECT +1 214 217 [email protected] [email protected]



Déjà vu: 2016 feels like 2015 with record construction, absorption Mike Otillio Director of Market ResearchKari Beets Research AssociateLooking back at the year-end statistics for Dallas-Fort Worth’s industrial market may give déjà vu. Record construction and absorption levels are similar to what was seen at the end of 2015. Rental rate trends continued climbing upward, while vacancy continued lower than the historical average. In Q4 2015, it seemed too optimistic to think the upward trajectory would continue, but 2016 showed that the positive market fundamentals could continue to improve.

Like 2015, yearly net absorption and square footage delivered were the highest seen this cycle. Net absorption of almost 24 million square feet exceeded 2015’s level by 2.8 million square feet. The 96 properties delivered in 2016 totaled 19.7 million square feet, surpassing that delivered in 2015 by 97,000 square feet.

Investment activity continued at the same pace as Q3 2016, but was considerably off from 2015’s transaction volume. Volume for 2016 was $2.3 billion, $1.1 billion less than 2015’s level of $4.3 billion. The top investors continued to be from overseas, with Global Logistics Properties from Singapore leading recent acquisitions.

There are some causes for concern. Warehouse starts were down considerably in Q4 2016 – as only six buildings, which totaled 921,000 square feet, broke ground. While this may be a blip as investors wait for current inventory to fill, it also may signal caution by developers that the market could be overbuilt. Although vacancy is lower than a year prior, it ticked up 0.2% from Q3 to Q4. If recently-delivered inventory does not fill up quickly, rental rate decreases will soon follow.

OutlookSpeculative projects currently under construction are only 13.7% pre-leased, and vacancy will rise as these buildings are delivered. Construction starts will continue to fall as vacancy increases, especially for the large big-box product currently favored by developers.

The current political climate and talk about tariffs could make investors more cautious, especially with logistics or manufacturing operations dependent on trade with Mexico and China. Expect less interest and lower pricing for older projects or those with lower-credit tenants.

Concerns about the available labor force will increase as the market becomes more saturated with labor-intensive distribution centers such as Amazon’s new facilities some of which employ up to 1,000 people. While a concentration of major tenants signals strength in the market, new tenants may be concerned they will be unable to find employees at competitive wages.


AnnualChange

Quarterly Change

Quarterly Forecast*

Vacancy

Net Absorption

Under Construction

Rental Rate

*Projected


DFW Market

DFW Warehouse

DFW Flex

Vacancy Rate 6.7% 6.5% 7.6%

Change from prior Quarter 0.2% 0.3% -0.3%

Absorption YTD (Thousand Square Feet) 23,983 22,732 1,252

New Supply YTD (Thousand Square Feet) 19,744 19,574 170

Under Construction (Million Square Feet) 21.8 19.3 2.4


Average $5.54 $4.63 $10.01

Change from prior Quarter 3.6% 2.2% 2.9%

Year-Over-Year Change 8.7% 7.3% 3.9%

Vacancy Rate> Overall vacancy increased slightly to 6.6% after reaching 6.2% in Q3, the lowest

rate in decades. Year-over-year, vacancy is down 0.4%.> Flex vacancy continued to decline, dropping from 7.9% in Q3 to 7.6% in Q4.

Warehouse vacancy increased 0.3% to 6.5%, but it remains significantly lower than the historical average. Vacancy for bulk warehouse increased to 8.8% in Q4, from 8.2% in the prior quarter.

> South Dallas saw the greatest increase in vacancy, jumping from 8% to 10.4% as the 1 million square foot warehouse in SouthPort Logistics Park was delivered vacant.

Absorption & Demand> Net absorption for the year 2016 totaled 24 million square feet, surpassing

2015’s net absorption total by more than 2.7 million square feet. This marks back-to-back record-breaking years for absorption in the DFW market.

> South Dallas absorbed over 5.8 million square feet in 2016 but saw negative absorption of 138,000 for 4Q. Negative absorption was mostly due to small move-outs, but included Sprouts vacating 117,000 SF at 101 Sunridge Blvd.

> The Great Southwest submarket saw the highest level of fourth quarter net absorption with 1.4 million square feet. Mission Foods executed a 15-year lease for 775,094 square feet at 2404 W Pioneer Pky and Rooms To Go moved into 234,100 square feet at 2251 E Bardin Road.

> East Dallas was the only submarket to see negative net absorption for the year with a total of -71,221 square feet.

Rental Rates> Average asking rates increased significantly from Q3 to Q4. Warehouse rates

jumped 2.2% from $4.53 to $4.63 triple net. Flex asking rates increased 2.9%, topping $10 on average.

> Warehouse asking rates in South Dallas climbed 3.7% from $3.50 to $3.63, but remain the least expensive in the metroplex. Asking rates in the Alliance warehouse market were flat from Q3 to Q4, and decreased only $0.02 from Q2, as vacancy in the market increased slightly.

Construction> At the end of Q4, about 21.8 million square feet of industrial and flex was under

construction, just above Q4 2015’s totals of 20.6 million square feet.

> Warehouse construction starts fell considerably with only six buildings, which totaled 921,000 square feet, breaking ground in the quarter.

> The percentage of spec warehouses under construction in Q4 was 84%, a decrease from the prior quarter, when 91% of under construction product was spec. Speculative warehouses delivered in Q4 were 43% leased, while 13% of deliveries were build-to-suit.


Alliance

DFW Airport

East Dallas

Far North I-35E Corridor

Great Southwest

Metropolitan / Addison

North Fort Worth

North I-35E Corridor

North US 75 Corridor

Northeast Dallas / Garland

South Dallas

South Fort Worth

West I-30 Corridor

Outlying Metroplex

-1 1 3 5 7Millions

Absorption Under Construction

Job Growth & Unemployment(not seasonly adjusted)

Unemployment 11/2015 11/2016

DFW 3.9% 3.5%

Texas 4.4% 4.2%

U.S. 4.8% 4.7%

Job GrowthAnnual Change

# of Jobs Added

DFW 3.3% 114.8K

Texas 1.8% 210.8K

U.S. 1.6% 2,231.0K

Under Construction & Absorption (YTD)

Flex/Warehouse Vacancy Breakdown

Flex9.7%

8,636,353 SF

Warehouse6.5%

43,646,188 SF

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

-6,000,000

-3,000,000

0

3,000,000

6,000,000

9,000,000

12,000,000

15,000,000

18,000,000

21,000,000

24,000,000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016Va

canc

y Ra

te

Squa

re F

eet


0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

-6,000,000

-3,000,000

0

3,000,000

6,000,000

9,000,000

12,000,000

15,000,000

18,000,000

21,000,000

24,000,000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014


New Supply, Absorption & Vacancy Rate



EXISTING PROPERTIES

Submarket BldgsTotal

InventorySF

CONSTRUCTION

DirectVacancy

Rate

TotalVacant

SF

SubleaseVacancy

Rate

New SupplyYTDSF

UnderConstruction

SF

VACANCY NET ABSORPTION

AverageRate

(NNN)

Net AbsYTDSF

Net AbsCurrent Qtr

SF

Vacancy Rate

Current

Vacancy Rate

Prior Qtr

RENT

Flex Market

Alliance 2,287,17043 0.8% 0.0% 18,680 0.8% 0.7% (10,030) 0 250,000(2,150) N/ADFW Airport 8,922,122224 12.7% 0.0% 1,130,532 12.7% 12.3% 34,894 0 0(31,264) $ 9.42East Dallas 5,957,261214 16.4% 0.0% 977,446 16.4% 16.3% 42,202 25,755 0(6,682) $ 11.87Far North I-35E Corridor 9,521,024268 10.2% 0.1% 982,677 10.3% 11.0% 206,879 0 483,28365,617 $ 9.98Great Southwest 10,467,698340 9.9% 0.1% 1,041,599 10.0% 10.6% 224,999 56,195 11,00068,422 $ 7.76Metropolitan / Addison 8,575,893242 9.1% 0.0% 784,116 9.1% 10.1% 264,023 0 079,420 $ 9.82North Fort Worth 2,463,35664 9.2% 0.0% 226,642 9.2% 9.5% 9,803 0 06,408 $ 9.22North I-35E Corridor 20,909,050742 4.7% 0.1% 1,013,728 4.8% 4.8% 7,925 0 0231 $ 13.60North US 75 Corridor 17,546,734450 7.8% 0.1% 1,393,986 7.9% 8.7% 294,451 76,050 636,220133,345 $ 9.53Northeast Dallas / Garland 8,904,015320 4.0% 0.1% 359,947 4.0% 3.6% 102,442 0 1,000,000(40,584) $ 5.44South Dallas 2,857,831136 1.6% 0.0% 44,939 1.6% 1.3% 42,702 0 15,000(6,907) $ 8.00South Fort Worth 9,419,209341 3.9% 0.1% 374,562 4.0% 4.7% 125,773 0 068,912 $ 8.68West I-30 Corridor 2,065,04177 6.0% 0.0% 123,418 6.0% 4.8% (23,786) 0 0(25,000) $ 7.47Outlying Metroplex 3,201,459102 5.1% 0.0% 164,081 5.1% 4.1% (70,629) 12,000 20,000(32,406) $ 10.13Total DFW Market 113,097,8633,563 7.6% 0.1% 8,636,353 7.6% 7.9% 1,251,648 170,000 2,415,503277,362 $ 10.01

Warehouse Market

Alliance 35,530,668176 12.9% 0.0% 4,584,410 12.9% 12.2% 2,340,916 1,007,803 1,587,710467,382 $ 3.71DFW Airport 60,762,127466 5.7% 0.0% 3,484,706 5.7% 7.0% 2,194,361 1,072,478 2,826,679975,422 $ 4.56East Dallas 30,217,419521 4.3% 0.0% 1,307,953 4.3% 4.4% (113,423) 0 344,00024,280 $ 3.87Far North I-35E Corridor 64,300,934628 5.8% 0.3% 3,860,640 6.0% 6.2% 2,606,491 1,837,693 1,084,849657,418 $ 4.55Great Southwest 92,789,9391,120 6.2% 0.3% 6,094,741 6.6% 5.9% 2,406,606 4,204,182 4,957,0021,321,200 $ 4.10Metropolitan / Addison 12,644,057221 3.3% 0.1% 429,829 3.4% 3.0% (121,275) 0 0(53,551) $ 5.73North Fort Worth 35,016,582408 5.3% 0.1% 1,902,743 5.4% 6.2% 4,299,496 3,435,429 646,826709,439 $ 4.38North I-35E Corridor 66,125,6821,706 2.2% 0.1% 1,539,141 2.3% 2.5% 518,118 0 0122,302 $ 5.47North US 75 Corridor 27,147,908408 3.7% 0.2% 1,067,016 3.9% 3.0% 424,184 268,745 139,331(259,185) $ 8.62Northeast Dallas / Garland 40,587,341594 5.0% 1.5% 2,624,182 6.5% 7.0% 1,003,244 175,000 1,171,366398,111 $ 4.10South Dallas 70,958,047549 10.4% 0.0% 7,400,497 10.4% 8.0% 5,780,330 6,254,186 4,574,233(130,715) $ 3.63South Fort Worth 58,326,8191,211 3.6% 0.1% 2,158,110 3.7% 3.5% 1,090,379 338,075 19,000185,253 $ 3.97West I-30 Corridor 33,449,883325 16.7% 0.0% 5,600,421 16.7% 15.8% 146,862 556,613 518,241(74,942) $ 4.22Outlying Metroplex 48,802,773830 3.2% 0.0% 1,591,799 3.3% 3.2% 155,400 423,870 1,480,750168,853 $ 7.53Total DFW Market 676,660,1799,163 6.2% 0.2% 43,646,188 6.5% 6.2% 22,731,689 19,574,074 19,349,9874,511,267 $ 4.63

Industrial Market

Alliance 37,817,838219 12.2% 0.0% 4,603,090 12.2% 11.5% 2,330,886 1,007,803 1,837,710465,232 $ 3.71DFW Airport 69,684,249690 6.6% 0.0% 4,615,238 6.6% 7.7% 2,229,255 1,072,478 2,826,679944,158 $ 5.78East Dallas 36,174,680735 6.3% 0.0% 2,285,399 6.3% 6.4% (71,221) 25,755 344,00017,598 $ 4.49Far North I-35E Corridor 73,821,958896 6.3% 0.2% 4,843,317 6.6% 6.8% 2,813,370 1,837,693 1,568,132723,035 $ 5.78Great Southwest 103,257,6371,460 6.6% 0.3% 7,136,340 6.9% 6.4% 2,631,605 4,260,377 4,968,0021,389,622 $ 4.46Metropolitan / Addison 21,219,950463 5.7% 0.0% 1,213,945 5.7% 5.8% 142,748 0 025,869 $ 7.60North Fort Worth 37,479,938472 5.6% 0.1% 2,129,385 5.7% 6.4% 4,309,299 3,435,429 646,826715,847 $ 4.55North I-35E Corridor 87,034,7322,448 2.8% 0.1% 2,552,869 2.9% 3.1% 526,043 0 0122,533 $ 7.84North US 75 Corridor 44,694,642858 5.3% 0.2% 2,461,002 5.5% 5.2% 718,635 344,795 775,551(125,840) $ 9.08Northeast Dallas / Garland 49,491,356914 4.8% 1.2% 2,984,129 6.0% 6.4% 1,105,686 175,000 2,171,366357,527 $ 4.25South Dallas 73,815,878685 10.1% 0.0% 7,445,436 10.1% 7.7% 5,823,032 6,254,186 4,589,233(137,622) $ 3.69South Fort Worth 67,746,0281,552 3.7% 0.1% 2,532,672 3.7% 3.7% 1,216,152 338,075 19,000254,165 $ 4.26West I-30 Corridor 35,514,924402 16.1% 0.0% 5,723,839 16.1% 15.1% 123,076 556,613 518,241(99,942) $ 4.26Outlying Metroplex 52,004,232932 3.3% 0.0% 1,755,880 3.4% 3.3% 84,771 435,870 1,500,750136,447 $ 7.67Total DFW Market 789,758,04212,726 6.4% 0.2% 52,282,541 6.6% 6.4% 23,983,337 19,744,074 21,765,4904,788,629 $ 5.54

ANNUAL COMPARISON OF TOTAL MARKET

9874Q 6102 ,758,04212, 25%2.0%4.6627 ,282,541 6.6% 6.4% 23,983,337 19,744,074 21,765,4904,788, 45.5 $9267674Q 5102 ,570,04412, 45%1.0%9.6626 ,077,880 7.0% 7.3% 21,193,782 19,647,152 20,589,8957,705, 60.5 $1387474Q 4102 ,922,89212, 55%1.0%3.7045 ,624,510 7.4% 6.7% 13,846,581 17,648,274 16,553,1102,653, 99.4 $8980374Q 3102 ,274,61812, 15%2.0%9.6174 ,822,817 7.1% 7.9% 18,557,108 7,984,485 14,463,5237,969, 06.4 $0212274Q 2102 ,290,13312, 26%2.0%5.8144 ,395,440 8.6% 8.9% 11,599,973 2,412,267 4,607,2663,154, 81.4 $654

NOTE: Statistical set includes all industrial properties 10,000 SF and up, excluding heavy manufacturing properties. While CoStar attempts to provide the most accurate data at the end of every quarter, revisions are made throughout the year accounting for discrepancies in past reporting. Sources: CoStar Property, Colliers Research

4 North American Research & Forecast Report | Q4 2014 | Office Market Outlook | Colliers International

Copyright © 2015 Colliers International.The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report.




Colliers International1717 McKinney Avenue, Suite 900 Dallas, Texas 75202+1 214 692 1100colliers.com/texas/dallas

RESEARCHERS:

MIKE OTILLIODirector of ResearchDIRECT +1 214 217 [email protected]

KARI BEETSResearch AssociateDIRECT +1 214 217 [email protected]

77

20

20

2020

2020

20

30

30

3030

3030

8080

820

820

820

820

DNT

DNT

DNT

DNT

LLT

LLT

LLT

45

45

75

75

1709

12

12

12

12

12

12

12

635

635

635

635

175

175

408

161

161

16126

114

114

121

121

121

121

121

2409

303

352

190

190

190

190

190190

78

78

66

205

183

183

183

183

183

67

67

67

67

360

360

360

377

377

377

377

380

380

380

199

287

287

287

287B

287B

35

35E

35W

35W

35W

35E

35W

35E35W

WEST TARRANT COUNTY

WEST DFWAIRPORT

UPPERGREAT

SOUTHWEST

ARLINGTON



FORT WORTH


SOUTHWEST TARRANT

RED BIRDAIRPORT



LOWERGREAT

SOUTHWEST

MANSFIELD


ALLEN / McKINNEY

PLANO

ROCKWALL


RICHARDSON

CENTRALEAST DALLAS

EAST DALLASMESQUITE

EAST DFWAIRPORT

LEWISVILLE




EAST HINES NORTH

NORTHTRINITY

WESTHINESNORTH

WEST BROOKHOLLOW



35E

EAST BROOKHOLLOW8

6

7

4

13 3

1

12

2

9

14

115

10

14

14

14


1 Alliance 9 North US 75 Corridor37.8m SF 12.2% Vac UC = 1.8m SF $ 3.71 PSF 44.7m SF 5.5% Vac UC = 0.8m SF $ 9.08 PSF

2 DFW Airport 10 Northeast Dallas / Garland69.7m SF 6.6% Vac UC = 2.8m SF $ 5.78 PSF 49.5m SF 6% Vac UC = 2.2m SF $ 4.25 PSF

3 East Dallas 11 South Dallas36.2m SF 6.3% Vac UC = 0.3m SF $ 4.49 PSF 67.1m SF 10.1% Vac UC = 4.6m SF $ 3.69 PSF

4 Far North I-35E Corridor 12 South Fort Worth73.8m SF 6.6% Vac UC = 1.6m SF $ 5.78 PSF 67.7m SF 3.7% Vac UC = None $ 4.26 PSF

5 Great Southwest 13 West I-30 Corridor103.3m SF 6.9% Vac UC = 5m SF $ 4.46 PSF 35.5m SF 16.1% Vac UC = 0.5m SF $ 4.26 PSF

6 Metropolitan / Addison 14 Outlying21.2m SF 5.7% Vac UC = None $ 7.60 PSF 52m SF 3.4% Vac UC = 1.5m SF $ 7.67 PSF

7 North Fort Worth Total Industrial Market37.5m SF 5.7% Vac UC = 0.6m SF $ 4.55 PSF 789.8m SF 6.6% Vac UC = 21.8m SF $ 5.54 PSF

8 North I-35E Corridor87m SF 2.9% Vac UC = None $ 7.84 PSF

463 Bldgs

2,448 Bldgs

858 Bldgs

914 Bldgs

685 Bldgs

1,552 Bldgs

402 Bldgs

932 Bldgs

12,726 Bldgs

UC = Under Construction

219 Bldgs

690 Bldgs

735 Bldgs

896 Bldgs

1,460 Bldgs

463 Bldgs



Investor confidence high, fueling spec construction and record pricing Mike Otillio Director of Market ResearchKari Beets Research AssociateConfidence in the Dallas-Fort Worth industrial market is high. Developers continue to break ground on new projects, and investors are buying and selling at record prices. This confidence is not unfounded – the DFW region’s role in the global cargo network is growing, job growth is steady, and real estate fundamentals continue to improve even after reaching their best levels in over a decade.

DFW’s central location attracts companies seeking a location at the midpoint between the coasts with additional global access through DFW Airport. In August 2016, over 71,000 tons of cargo went through the airport, a 21.7% increase over the prior year. Jobs grew 3.4% from August 2015-2016, and in its Beige Book the Dallas Federal Reserve noted increasing output and a more positive outlook for manufacturing.

Port Logistics Realty’s SouthPort Logistics Park is the largest business park under construction with two buildings totaling almost 1.5 million square feet. This is just the first phase in the three phased development which will ultimately include 8 million square feet.

Construction of smaller product has increased in response to demand from small tenants. At the end of Q3, 30 of the 96 buildings under construction were less than 50,000 square feet. Several of these buildings are in Prosper Business Park which will lease spaces as small as 5,000 square feet in the 20,000 to 25,000 square foot buildings.

Investment activity continues to be strong, and buyers are pushing cap rates lower as they compete for product. Cap rates for big-box warehouses with credit tenants have traded in the 4-5% range for the last several quarters, and smaller industrial properties have seen increased interest and lower cap rates as well. Light industrial products with higher office finish have seen a drop in cap rates from 6-7% to 4-5% from 2013 to 2016. Institutional investors are showing interest in light industrial product, driving more competitive pricing.

OutlookConstruction starts fell slightly last quarter but are likely to pick up in the early quarters of 2017, as the market is on pace to absorb more than was delivered for the second year in a row.

Rental rates are expected to rise in Q4, especially for smaller product as demand is high and the vacancy rate is at its lowest level in 16 years.

Investors will push industrial cap rates lower as they seek a stable yield among the uncertainty in the economic and political climate. Credit tenants and developers will seek to capitalize on the strong market through sale-leasebacks or selling as soon as properties stabilize.


AnnualChange

Quarterly Change

4th Qtr. Forecast*

Vacancy

Net Absorption

Under Construction

Rental Rate

*Projected


DFW Market

DFW Warehouse

DFW Flex


Change from prior Quarter -0.6% -0.7% -0.3%

Absorption YTD (Thousand Square Feet) 18,840 17,838 1,002


Under Construction (Million Square Feet) 22.4 20.9 1.4


Average $ 5.34 $ 4.53 $ 9.75



Vacancy Rate> Overall vacancy declined 0.6% to 6.4% in Q3 2016, the lowest rate since Q2

2000. Year-over-year vacancy is down 0.9%.> Warehouse vacancy decreased 0.7% from Q2 to Q3 after increasing between

Q1 and Q2. Flex vacancy continued its steady decline, dropping from 8.2% to 7.9% in Q3.

> Vacancy for big-box product declined from 9% to 8.2% in Q3, remaining significantly higher than the overall vacancy rate.

Absorption & Demand> Year-to-date absorption is set to surpass 2015’s level of 20.5 million square

feet. Through Q3 2016, 18.8 million square feet have been absorbed, leaving just 1.7 million to be absorbed in Q4 to surpass 2015. On average, over 5 million square feet have been absorbed each quarter for the last three years.

> South Dallas continued to see high absorption, with 2.5 million absorbed this quarter, putting the year-to-date total for the submarket at 6 million square feet. NFI’s 1.1 million square foot lease at 501 Danieldale Road accounted for almost half of the quarter’s absorption, and Medline’s move to its Wilmer distribution center added 670,000 square feet.

> North Fort Worth had the second highest level of absorption at 1.9 million square feet. Lego Systems’ move to 1.4 million square feet at 5600 Mark Iv Parkway accounted for almost all of this quarter’s absorption. Saddle Creek Transportation also added 430,500 square feet of absorption from its move to 4670 Railhead Road.

Rental Rates> Rental rates increased, but at a slower rate than in prior quarters. Warehouse

rates only increased $0.02, from $4.51 to $4.53 triple net. Average asking rates for flex product increased 2.3% to $9.75 triple net.

> Warehouse space continued to be least expensive in South Dallas, where rates climbed $0.03 to $3.50 triple net. The North US 75 Corridor, comprised of Allen, McKinney, Plano, and Richardson is the most expensive submarket in the metroplex, with average rates of $6.39 triple net.

Construction> About 22.4 million square feet was under construction at the end of the

quarter. 4.6 million square feet broke ground, just under the quarterly average for the past three years of 4.7 million. Of the total, 1.4 million was flex, including a one-million square foot data center by RagingWire Data Centers.

> Of projects under construction, 91% of the warehouse square footage was spec, while only one 28,000 flex project is spec. Spec warehouse projects were 21% leased at the end of Q3.


-1 3 7

AllianceDFW AirportEast Dallas

Far North I-35E CorridorGreat Southwest

Metropolitan / AddisonNorth Fort Worth

North I-35E CorridorNorth US 75 Corridor

Northeast Dallas / GarlandSouth Dallas

South Fort WorthWest I-30 CorridorOutlying Metroplex

MillionsAbsorption Under Construction



DFW 4.1% 4.1%

Texas 4.5% 4.9%

U.S. 5.2% 5.0%


# of Jobs Added

DFW 3.4% 117.3K

Texas 1.6% 190.6K

U.S. 1.7% 2,443.0K

Under Absorption & Construction (YTD)


Flex9.7%

8,964,752 SF

Warehouse6.1%

41,087,307 SF

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

-6,000,000

-3,000,000

0

3,000,000

6,000,000

9,000,000

12,000,000

15,000,000

18,000,000

21,000,000

24,000,000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016


0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

-6,000,000

-3,000,000

0

3,000,000

6,000,000

9,000,000

12,000,000

15,000,000

18,000,000

21,000,000

24,000,000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014





EXISTING PROPERTIES


InventorySF

CONSTRUCTION

DirectVacancy

Rate

TotalVacant

SF

SubleaseVacancy

Rate

New SupplyYTDSF

UnderConstruction

SF


AverageRate

(NNN)

Net AbsYTDSF

Net AbsCurrent Qtr

SF

Vacancy Rate

Current

Vacancy Rate

Prior Qtr

RENT

Flex Market

Alliance 2,287,17043 0.7% 0.0% 16,530 0.7% 0.6% (7,880) 0 250,000(2,700) N/ADFW Airport 8,945,004226 12.3% 0.1% 1,102,708 12.3% 13.1% 62,718 0 066,366 $ 9.34East Dallas 5,970,551215 16.3% 0.0% 970,764 16.3% 17.1% 48,884 25,755 048,476 $ 13.42Far North I-35E Corridor 9,529,524269 10.0% 0.0% 956,555 10.0% 10.3% 137,382 0 028,575 $ 10.13Great Southwest 10,547,352338 11.6% 0.0% 1,231,035 11.7% 12.1% 158,677 56,195 044,698 $ 7.70Metropolitan / Addison 8,613,893243 10.0% 0.0% 863,536 10.0% 11.2% 184,603 0 0103,289 $ 10.25North Fort Worth 2,463,35664 9.5% 0.0% 233,050 9.5% 9.5% 3,395 0 01,490 $ 9.51North I-35E Corridor 21,139,542748 5.1% 0.2% 1,120,655 5.3% 4.9% 36,194 0 0(90,008) $ 12.03North US 75 Corridor 17,251,772451 8.2% 0.1% 1,439,891 8.3% 8.7% 158,519 76,050 156,460102,191 $ 9.44Northeast Dallas / Garland 8,905,566321 3.5% 0.1% 319,363 3.6% 4.6% 143,026 0 1,000,00086,300 $ 5.59South Dallas 2,857,831136 1.3% 0.0% 38,032 1.3% 1.3% 49,609 0 27,9500 $ 8.00South Fort Worth 9,504,509344 4.6% 0.1% 451,874 4.8% 4.8% 63,861 0 0282 $ 8.18West I-30 Corridor 2,065,04177 4.8% 0.0% 98,418 4.8% 4.5% 1,214 0 0(4,536) $ 7.47Outlying Metroplex 3,171,192100 3.9% 0.0% 122,341 3.9% 3.5% (38,223) 12,000 0589 $ 9.02Total DFW Market 113,252,3033,575 7.8% 0.1% 8,964,752 7.9% 8.2% 1,001,979 170,000 1,434,410385,012 $ 9.75

Warehouse Market

Alliance 33,530,088166 12.6% 0.0% 4,231,874 12.6% 13.4% 957,803 2,317,990259,619 $ 3.71DFW Airport 60,505,349463 6.9% 0.2% 4,268,535 7.1% 8.5% 868,303 1,349,3951,024,411 $ 4.57East Dallas 30,163,304520 4.4% 0.1% 1,343,344 4.5% 5.6% (77,703) 0 0343,070 $ 3.70Far North I-35E Corridor 63,599,763624 6.5% 0.0% 4,130,891 6.5% 8.1% 1,841,361 1,286,495 1,494,0471,341,145 $ 4.37Great Southwest 90,665,9331,116 5.7% 0.2% 5,320,048 5.9% 4.4% 3,097,577 6,407,474353,298 $ 4.08Metropolitan / Addison 12,646,192221 3.0% 0.0% 376,278 3.0% 4.3% (67,724) 0 0170,424 $ 5.61North Fort Worth 34,527,732403 5.0% 0.3% 1,832,807 5.3% 5.8% 2,959,170 400,0991,933,539 $ 4.16North I-35E Corridor 66,582,7321,707 2.2% 0.2% 1,583,684 2.4% 2.7% 395,616 0 0246,919 $ 5.71North US 75 Corridor 27,171,917408 2.5% 0.3% 778,904 2.9% 3.2% 681,869 268,745 151,211102,198 $ 6.39Northeast Dallas / Garland 40,404,413593 5.7% 1.5% 2,907,293 7.2% 7.9% 605,133 0 582,350264,940 $ 4.08South Dallas 68,937,209547 8.0% 0.0% 5,528,622 8.0% 9.7% 5,178,926 6,311,058 $ 3.50South Fort Worth 57,959,2301,205 3.5% 0.0% 2,018,963 3.5% 4.2% 900,626 16,575 301,500422,403 $ 4.08West I-30 Corridor 33,156,683324 15.8% 0.0% 5,235,779 15.8% 17.0% 219,422 264,413 810,441400,948 $ 4.24Outlying Metroplex 48,598,085821 3.1% 0.0% 1,530,285 3.1% 3.1% 6,114 215,070 821,4001,024 $ 7.65Total DFW Market 668,448,6309,118 6.0% 0.2% 1,087,307 6.1% 6.8% 17,838,169 15,113,077 20,946,9659,396,668 $ 4.53

Industrial Market

Alliance 35,817,258209 11.9% 0.0% 4,248,404 11.9% 12.6% 1,845,654 957,803 2,567,990256,919 $ 3.71DFW Airport 69,450,353689 7.6% 0.2% 5,371,243 7.7% 9.1% 1,267,775 868,303 1,349,3951,090,777 $ 5.73East Dallas 36,133,855735 6.3% 0.1% 2,314,108 6.4% 7.5% (28,819) 25,755 0391,546 $ 4.25Far North I-35E Corridor 73,129,287893 6.9% 0.0% 5,087,446 7.0% 8.4% 1,978,743 1,286,495 1,494,0471,369,720 $ 5.23Great Southwest 101,213,2851,454 6.3% 0.2% 6,551,083 6.5% 5.2% 1,252,727 3,153,772 6,407,474397,996 $ 4.43Metropolitan / Addison 21,260,085464 5.8% 0.0% 1,239,814 5.8% 7.1% 116,879 0 0273,713 $ 7.76North Fort Worth 36,991,088467 5.3% 0.3% 2,065,857 5.6% 6.1% 3,274,964 2,959,170 400,0991,935,029 $ 4.34North I-35E Corridor 87,722,2742,455 2.9% 0.2% 2,704,339 3.1% 3.3% 431,810 0 0156,911 $ 7.73North US 75 Corridor 44,423,689859 4.7% 0.2% 2,218,795 5.0% 5.4% 840,388 344,795 307,671204,389 $ 7.54Northeast Dallas / Garland 49,309,979914 5.3% 1.2% 3,226,656 6.5% 7.3% 748,159 0 1,582,350351,240 $ 4.25South Dallas 71,795,040683 7.8% 0.0% 5,566,654 7.8% 9.4% 5,958,854 5,178,926 6,339,0082,532,730 $ 3.54South Fort Worth 67,463,7391,549 3.6% 0.0% 2,470,837 3.7% 4.3% 964,487 16,575 301,500422,685 $ 4.35West I-30 Corridor 35,221,724401 15.1% 0.0% 5,334,197 15.1% 16.3% 220,636 264,413 810,441396,412 $ 4.28Outlying Metroplex 51,769,277921 3.2% 0.0% 1,652,626 3.2% 3.2% (32,109) 227,070 821,4001,613 $ 7.70Total DFW Market 781,700,93312,693 6.2% 0.2% 50,052,059 6.4% 7.0% 18,840,148 15,283,077 22,381,3759,781,680 $ 5.34


1873Q 6102 ,700,93312, 05%2.0%2.6396 ,052,059 6.4% 7.0% 18,840,148 15,283,077 22,381,3759,781, 43.5 $0860673Q 5102 ,572,74012, 55%2.0%1.7095 ,482,674 7.3% 7.1% 12,835,342 12,644,168 18,257,8882,005, 99.4 $4999373Q 4102 ,214,65412, 94%1.0%6.6615 ,541,633 6.7% 7.0% 11,264,722 8,934,356 19,647,9563,975, 48.4 $9707273Q 3102 ,933,03912, 75%2.0%7.7364 ,339,340 7.9% 8.3% 10,624,596 5,412,226 8,511,1465,379, 83.4 $2380273Q 2102 ,968,56812, 46%2.0%7.8824 ,162,021 8.9% 9.3% 8,617,816 1,091,940 4,226,3333,579, 80.4 $012








RESEARCHERS:



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20

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2020

2020

20

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3030

3030

8080

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820

DNT

DNT

DNT

DNT

LLT

LLT

LLT

45

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75

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1709

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12

635

635

635

635

175

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408

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2409

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35E

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35E35W

WEST TARRANT COUNTY

WEST DFWAIRPORT

UPPERGREAT

SOUTHWEST

ARLINGTON



FORT WORTH


SOUTHWEST TARRANT

RED BIRDAIRPORT



LOWERGREAT

SOUTHWEST

MANSFIELD


ALLEN / McKINNEY

PLANO

ROCKWALL


RICHARDSON

CENTRALEAST DALLAS

EAST DALLASMESQUITE

EAST DFWAIRPORT

LEWISVILLE




EAST HINES NORTH

NORTHTRINITY

WESTHINESNORTH

WEST BROOKHOLLOW



35E

EAST BROOKHOLLOW8

6

7

4

13 3

1

12

2

9

14

115

10

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1 Alliance 9 North US 75 Corridor35.8m SF 11.9% Vac UC = 2.6m SF $ 3.71 PSF 44.4m SF 5% Vac UC = 0.3m SF $ 7.54 PSF

2 DFW Airport 10 Northeast Dallas / Garland69.5m SF 7.7% Vac UC = 1.3m SF $ 5.73 PSF 49.3m SF 6.5% Vac UC = 1.6m SF $ 4.25 PSF

3 East Dallas 11 South Dallas36.1m SF 6.4% Vac UC = None $ 4.25 PSF 65.3m SF 7.8% Vac UC = 6.3m SF $ 3.54 PSF

4 Far North I-35E Corridor 12 South Fort Worth73.1m SF 7% Vac UC = 1.5m SF $ 5.23 PSF 67.5m SF 3.7% Vac UC = 0.3m SF $ 4.35 PSF

5 Great Southwest 13 West I-30 Corridor101.2m SF 6.5% Vac UC = 6.4m SF $ 4.43 PSF 35.2m SF 15.1% Vac UC = 0.8m SF $ 4.28 PSF

6 Metropolitan / Addison 14 Outlying21.3m SF 5.8% Vac UC = None $ 7.76 PSF 51.8m SF 3.2% Vac UC = 0.8m SF $ 7.70 PSF

7 North Fort Worth Total Industrial Market37m SF 5.6% Vac UC = 0.4m SF $ 4.34 PSF 781.7m SF 6.4% Vac UC = 22.4m SF $ 5.34 PSF

8 North I-35E Corridor87.7m SF 3.1% Vac UC = None $ 7.73 PSF

464 Bldgs

2,455 Bldgs

859 Bldgs

914 Bldgs

683 Bldgs

1,549 Bldgs

401 Bldgs

921 Bldgs

12,693 Bldgs


209 Bldgs

689 Bldgs

735 Bldgs

893 Bldgs

1,454 Bldgs

464 Bldgs


DALLAS/FORT WORTH | INDUSTRIALQ2 2016

DFW Leads Nation in Industrial Construction, but More Small Product NeededMike Otillo Director of Market ResearchKari Beets Research AssociateThe Dallas-Fort Worth industrial market continued to ride a rising tide of increasing rents and strong demand in Q2 2016, propelling the area to the highest levels of construction in the nation. So far in 2016, over 2.9 million square feet of spec “big box” warehouses have been delivered, and these properties are 55% leased.Mid-size tenants looking for spaces between 25,000 and 150,000 continue to find limited options in the market, especially in Fort Worth. To get the most out of their land investments, developers are focusing on constructing larger buildings that are not divisible to these smaller sizes. Warehouses under construction with a 28’ clear ceiling height required for distribution uses had an average size of 340,000 square feet, with many seeking a single tenant.Investment activity declined slightly in Q2 2016 in terms of transaction sizes, but the average price per square foot continues to rise and cap rates continue to decline – reaching 6.8% on average, but cap rates have been as low at 4.5% for credit tenants with long-term leases. Institutional capital comprised a smaller percentage of deals so far in 2016 than in 2015, but private investment rose from 23% of activity in 2015 to 41% so far in 2016 to bring it more in line with investment activity in the U.S. as a whole. With yields so low, expect investors to continue focusing on development rather than purchasing existing properties.Because of its increasing role as an inland port, Dallas-Fort Worth has remained isolated from the negative trends in other areas of the Texas industrial economy. Texas manufacturing activity continued to decline in June, but less so than earlier in the year. Trade, transportation, and utilities employment in Dallas-Fort Worth continued its growth trend, adding 37,500 jobs from May 2015 to May 2016. E-commerce sales across the U.S. grew 15.1% from Q1 2015 to 2016, according to the U.S. Census Bureau. As retailers increasingly focus on e-commerce, sales, construction, and investment in the Dallas-Fort Worth warehouse market will also grow.OutlookDue to rain, deliveries in Q2 were slower than the 7 million expected, but construction is expected to pick up in the second half of 2016. Currently 17 million square feet is expected to deliver, which will raise the total deliveries for 2016 to 26 million. As demand is strong for smaller tenant spaces and there are several large tenants circling the market, expect vacancy rates for mix-sized big boxes to rise 0.2 to 0.5%. With over 22 million square feet under construction, developers now breaking ground will look to differentiate their product through looking for infill sites with better access and adding high-quality finishes. Expect rates to continue to rise in response to increasing construction costs.


AnnualChange

Quarterly Change

3rd Qtr. Forecast*

VACANCY

NET ABSORPTION

UNDER CONSTRUCTION

RENTAL RATE

*Projected


DFW Market

DFW Warehouse

DFW Flex



Absorption YTD (Thousand Square Feet) 9,088 8,559 529


Under Construction (Million Square Feet) 22 21.3 0.5


Average $5.28 $4.51 $9.67



https://www.facebook.com/colliersdfw

https://www.linkedin.com/company/2210310

https://twitter.com/colliers_dfw

Vacancy Rate> Overall vacancy increased slightly to 7.0% in Q2 2016 from 6.7% in Q1. Year-

over-year vacancy is down 0.1%.> Warehouse vacancy increased 0.4% from Q1 to 6.8%, while flex vacancy

decreased from 8.7% in Q1 2016 to 8.5% in Q2.> The vacancy rate for properties between 100,000 and 250,000 square feet rose

1% to 6.9%.

Absorption & Demand> South Dallas saw the highest level of absorption so far this year, with over

2.5 million occupied in Q2 2016. South Fort Worth saw the second-highest absorption level with 482,890 square feet absorbed.

> Year-to-date net absorption for Q2 was 9,088,031 square feet, 16% behind the same time in 2015. Absorption in Q2 was less than half Q1 2016’s rate of 6.3 million square feet.

> Major move-ins in Q2 2016 included Kimberly Clark occupying 874,00 square feet on Mountain Creek Parkway, Shippers Warehouse’s move into 1005 Wintergreen in Hutchins, and Mother Parkers Tea & Coffee taking 417,000 square feet in South Fort Worth

Rental Rates> Rental rates continued to increase, climbing to $5.28 in Q2 2016 from $5.09 in

Q1. Warehouse space averaged $4.51 PSF, while flex rates averaged $9.67, both increasing $0.20 from prior quarter.

> Rates for warehouse space in South Dallas continued to be the lowest in the market, even as rates rose slightly to $3.47. East Dallas rates closely compete with South Dallas, with rates only $0.22 higher at $3.69 PSF.

> After experiencing a slower rate growth in late 2015, average warehouse rents jumped 4.7% from Q1 to Q2 2016. Rate growth should be slower through the second half of 2016 to accommodate this jump and new product that is coming on line.

Construction> At the end of Q2 2016, over 22 million square feet in 97 buildings was under

construction. Of this total, 454,460 square feet was flex product and almost 21.6 million was warehouse product.

> Projects under construction are about 27% leased; however, projects completed in 2015 are 84% leased, showing there is strong demand for new product.

2 Dallas/Fort Worth Research & Forecast Report | Q2 2016 | Industrial | Colliers International

-1

AllianceDFW Airport

East DallasFar North I-35E Corridor

Great SouthwestMetropolitan / Addison

North Fort WorthNorth I-35E CorridorNorth US 75 Corridor

Northeast Dallas / GarlandSouth Dallas

South Fort WorthWest I-30 CorridorOutlying Metroplex

MillionsAbsorption Construction

3 7



DFW 4.0% 3.5%

Texas 4.3% 4.2%

U.S. 5.3% 4.5%


# of Jobs Added

DFW 3.7% 125.3K

Texas 1.5% 171.8K

U.S. 1.6% 2,324.0K

Under Absorption & Construction (YTD)


Flex8.5%

9.620,523 SF

Warehouse6.8%

44,894,389 SF

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

-6,000,000

-3,000,000

0

3,000,000

6,000,000

9,000,000

12,000,000

15,000,000

18,000,000

21,000,000

24,000,000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016


0%

5%

10%

15%

20%

25%

0

2,500,000

5,000,000

7,500,000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

New Supply Absorption Vacancy Rate

Squa

re F

eet

Vaca

ncy

Rate



Dallas/Fort Worth Industrial Market Summary

EXISTING PROPERTIES


InventorySF

CONSTRUCTION

DirectVacancy

Rate

TotalVacant

SF

SubleaseVacancy

Rate

New SupplyYTDSF

UnderConstruction

SF


AverageRate

(NNN)

Net AbsYTDSF

Net AbsCurrent Qtr

SF

Vacancy Rate

Current

Vacancy Rate

Prior Qtr

RENT

Flex Market

Alliance 2,284,85843 0.6% 0.0% 13,830 0.6% 0.4% (5,180) 0 250,000(3,680) N/ADFW Airport 8,941,914225 13.1% 0.0% 1,169,074 13.1% 13.3% (3,648) 0 022,172 $ 9.39East Dallas 5,987,553214 17.0% 0.0% 1,019,240 17.0% 16.8% 408 25,755 0(12,977) $ 11.66Far North I-35E Corridor 9,397,811271 10.6% 0.1% 1,000,129 10.6% 11.6% 112,844 0 093,615 $ 9.76Great Southwest 10,557,768339 12.1% 0.0% 1,279,926 12.1% 12.5% 113,979 56,195 036,220 $ 7.87Metropolitan / Addison 8,629,191244 11.3% 0.1% 979,525 11.4% 11.7% 68,614 0 031,186 $ 10.10North Fort Worth 2,463,76564 9.5% 0.0% 234,540 9.5% 9.3% 1,905 0 0(4,420) $ 9.51North I-35E Corridor 21,201,425750 4.9% 0.0% 1,038,897 4.9% 5.4% 118,298 0 0103,809 $ 12.12North US 75 Corridor 17,522,026454 9.9% 0.3% 1,776,200 10.1% 9.9% (15,099) 22,875 192,460(33,280) $ 9.73Northeast Dallas / Garland 8,845,829320 4.4% 0.0% 388,147 4.4% 4.6% 56,326 0 019,664 $ 5.17South Dallas 2,877,051137 1.7% 0.0% 49,047 1.7% 3.3% 49,609 0 046,409 $ 8.00South Fort Worth 9,474,509343 4.7% 0.1% 452,156 4.8% 4.6% 63,579 0 0(16,421) $ 8.17West I-30 Corridor 2,087,64178 5.2% 0.0% 108,882 5.2% 5.1% 5,750 0 0(1,600) $ 7.47Outlying Metroplex 3,170,792100 3.5% 0.0% 110,930 3.5% 2.7% (38,812) 0 12,000(25,437) $ 9.14Total DFW Market 113,442,1333,582 8.4% 0.1% 9,620,523 8.5% 8.7% 528,573 104,825 454,460255,260 $ 9.67

Warehouse Market

Alliance 33,529,385166 13.6% 0.0% 4,567,585 13.6% 12.6% 1,777,823 957,803 2,318,503(90,826) $ 3.73DFW Airport 60,280,095461 8.2% 0.1% 4,946,564 8.2% 8.3% 359,246 700,521 975,53481,774 $ 4.47East Dallas 30,152,588519 5.8% 0.1% 1,776,454 5.9% 5.0% (420,793) 0 0(274,798) $ 3.69Far North I-35E Corridor 63,395,037622 7.9% 0.1% 5,057,202 8.0% 6.8% 550,159 948,140 1,702,002(195,331) $ 4.24Great Southwest 88,893,2461,107 4.1% 0.4% 4,002,908 4.5% 4.0% 646,248 1,321,981 6,477,149105,132 $ 4.13Metropolitan / Addison 12,647,495221 4.2% 0.2% 546,702 4.3% 3.0% (238,148) 0 0(166,090) $ 5.53North Fort Worth 32,646,844400 5.4% 0.0% 1,752,346 5.4% 5.3% 1,358,030 1,088,670 2,270,599257,635 $ 4.34North I-35E Corridor 66,404,7801,708 3.0% 0.1% 2,027,643 3.1% 3.0% 30,417 0 0(43,982) $ 5.72North US 75 Corridor 26,987,145406 2.6% 0.3% 778,589 2.9% 3.3% 682,184 268,745 151,211233,914 $ 6.74Northeast Dallas / Garland 40,426,282593 7.0% 0.8% 3,189,674 7.9% 7.3% 338,868 0 582,350(254,288) $ 4.10South Dallas 67,427,717542 10.3% 0.0% 6,945,250 10.3% 9.5% 2,981,037 3,663,946 5,182,6992,539,261 $ 3.47South Fort Worth 58,652,2811,204 4.0% 0.0% 2,376,836 4.1% 4.9% 473,123 16,575 301,500499,311 $ 4.00West I-30 Corridor 32,681,385320 17.2% 0.0% 5,636,727 17.2% 16.3% (181,526) 264,413 810,441(299,029) $ 4.13Outlying Metroplex 48,034,611798 2.6% 0.0% 1,289,909 2.7% 2.9% 202,790 193,070 802,400111,776 $ 7.37Total DFW Market 662,158,8919,067 6.6% 0.1% 44,894,389 6.8% 6.4% 8,559,458 9,423,864 21,574,3882,504,459 $ 4.51

Industrial Market

Alliance 35,814,243209 12.8% 0.0% 4,581,415 12.8% 11.8% 1,772,643 957,803 2,568,503(94,506) $ 3.73DFW Airport 69,222,009686 8.8% 0.0% 6,115,638 8.8% 9.0% 355,598 700,521 975,534103,946 $ 5.71East Dallas 36,140,141733 7.7% 0.1% 2,795,694 7.7% 6.9% (420,385) 25,755 0(287,775) $ 3.93Far North I-35E Corridor 72,792,848893 8.2% 0.1% 6,057,331 8.3% 7.4% 663,003 948,140 1,702,002(101,716) $ 5.00Great Southwest 99,451,0141,446 4.9% 0.4% 5,282,834 5.3% 4.9% 760,227 1,378,176 6,477,149141,352 $ 4.48Metropolitan / Addison 21,276,686465 7.0% 0.1% 1,526,227 7.2% 6.5% (169,534) 0 0(134,904) $ 7.51North Fort Worth 35,110,609464 5.7% 0.0% 1,986,886 5.7% 5.6% 1,359,935 1,088,670 2,270,599253,215 $ 4.50North I-35E Corridor 87,606,2052,458 3.5% 0.0% 3,066,540 3.5% 3.6% 148,715 0 059,827 $ 7.59North US 75 Corridor 44,509,171860 5.5% 0.3% 2,554,789 5.7% 5.9% 667,085 291,620 343,671200,634 $ 7.95Northeast Dallas / Garland 49,272,111913 6.6% 0.7% 3,577,821 7.3% 6.8% 395,194 0 582,350(234,624) $ 4.30South Dallas 70,304,768679 9.9% 0.0% 6,994,297 9.9% 9.2% 3,030,646 3,663,946 5,182,6992,585,670 $ 3.50South Fort Worth 68,126,7901,547 4.1% 0.0% 2,828,992 4.2% 4.9% 536,702 16,575 301,500482,890 $ 4.26West I-30 Corridor 34,769,026398 16.5% 0.0% 5,745,609 16.5% 15.7% (175,776) 264,413 810,441(300,629) $ 4.16Outlying Metroplex 51,205,403898 2.7% 0.0% 1,400,839 2.7% 2.9% 163,978 193,070 814,40086,339 $ 7.43Total DFW Market 775,601,02412,649 6.9% 0.1% 54,514,912 7.0% 6.7% 9,088,031 9,528,689 22,028,8482,759,719 $ 5.28


5772Q 6102 ,601,02412, 45%1.0%9.6946 ,514,912 7.0% 6.7% 9,088,031 9,528,689 22,028,8482,759, 82.5 $9176572Q 5102 ,509,97512, 45%1.0%0.7945 ,079,514 7.1% 7.5% 10,846,849 8,926,924 14,033,6436,051, 29.4 $2436372Q 4102 ,573,53812, 15%2.0%8.6974 ,552,352 7.0% 7.1% 7,268,172 6,638,583 15,427,3822,490, 97.4 $8024272Q 3102 ,764,39712, 06%2.0%1.8834 ,161,465 8.3% 8.6% 5,246,295 2,588,927 8,379,3172,644, 82.4 $8300272Q 2102 ,451,90512, 76%1.0%2.9604 ,572,347 9.4% 9.9% 5,094,476 715,858 3,056,1894,000, 01.4 $642








RESEARCHERS:



77

20

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2020

2020

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8080

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DNT

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635

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287

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35E

35W

35W

35W

35E

35W

35E35W

WEST TARRANT COUNTY

WEST DFWAIRPORT

UPPERGREAT

SOUTHWEST

ARLINGTON



FORT WORTH


SOUTHWEST TARRANT

RED BIRDAIRPORT



LOWERGREAT

SOUTHWEST

MANSFIELD


ALLEN / McKINNEY

PLANO

ROCKWALL


RICHARDSON

CENTRALEAST DALLAS

EAST DALLASMESQUITE

EAST DFWAIRPORT

LEWISVILLE




EAST HINES NORTH

NORTHTRINITY

WESTHINESNORTH

WEST BROOKHOLLOW



35E

EAST BROOKHOLLOW8

6

7

4

13 3

1

12

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14

115

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14


1 Alliance 9 North US 75 Corridor35.8m SF 12.8% Vac UC = 2.6m SF $ 3.73 PSF 44.5m SF 5.7% Vac UC = 0.3m SF $ 7.95 PSF

2 DFW Airport 10 Northeast Dallas / Garland69.2m SF 8.8% Vac UC = 1m SF $ 5.71 PSF 49.3m SF 7.3% Vac UC = 0.6m SF $ 4.30 PSF

3 East Dallas 11 South Dallas36.1m SF 7.7% Vac UC = None $ 3.93 PSF 63.9m SF 9.9% Vac UC = 5.2m SF $ 3.50 PSF

4 Far North I-35E Corridor 12 South Fort Worth72.8m SF 8.3% Vac UC = 1.7m SF $ 5.00 PSF 68.1m SF 4.2% Vac UC = 0.3m SF $ 4.26 PSF

5 Great Southwest 13 West I-30 Corridor99.5m SF 5.3% Vac UC = 6.5m SF $ 4.48 PSF 34.8m SF 16.5% Vac UC = 0.8m SF $ 4.16 PSF

6 Metropolitan / Addison 14 Outlying21.3m SF 7.2% Vac UC = None $ 7.51 PSF 51.2m SF 2.7% Vac UC = 0.8m SF $ 7.43 PSF

7 North Fort Worth Total Industrial Market35.1m SF 5.7% Vac UC = 2.3m SF $ 4.50 PSF 775.6m SF 7% Vac UC = 22m SF $ 5.28 PSF


465 Bldgs

2,458 Bldgs

860 Bldgs

913 Bldgs

679 Bldgs

1,547 Bldgs

398 Bldgs

898 Bldgs

12,649 Bldgs


209 Bldgs

686 Bldgs

733 Bldgs

893 Bldgs

1,446 Bldgs

465 Bldgs




mailto:mike.otillo%40colliers.com?subject=3rd%20Quarter%20Market%20Report

mailto:kari.beets%40colliers.com?subject=3rd%20Quarter%20Market%20Report


DALLAS/FORT WORTH | INDUSTRIALQ1 2016

Construction Boom Continues as Rates, Demand Continue to GrowMike Otillo Director of Market ResearchKari Beets Research Associate

The construction boom continued in Dallas-Fort Worth’s industrial market in Q1 2016. Over 4 million square feet was delivered to the market and 20 million is still under construction. This level of construction surpassed even Inland Empire (California), which had 15 million square feet under construction at the end of Q1. Buildings under construction in DFW were 34% pre-leased at the end of the quarter, which is up from 20% at the end of Q4 2015.

Large distribution centers of over one million square feet 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 square feet are leased. E-commerce has been fueling a large part of the demand for the large warehouses, as retailers respond to consumer’s demand for more products faster. Walmart.com and Amazon are some of the recent tenants for these million square footers. Some retailers are also leasing smaller distribution centers closer to the population in order to provide faster local delivery.

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% from Q1 2015 and vacancy decreased 0.7% year-over-year. Net absorption exceeded Q1 2015’s level by 559,590 square feet. If similar levels of absorption can be sustained throughout the year, the market will reach just over 21 million square feet of absorption.

OutlookAs the Dallas-Fort Worth industrial market continues to have strong demand, developers will break ground on new projects. Currently there are 14 proposed buildings of 1 million square feet or more, and while some will wait for anchor tenants, developers may break ground on some as speculative projects. With over 7 million square feet set to deliver in Q2 2016 and almost 10 million to be completed in Q3, expect vacancy to rise 0.5-0.8% in the next several quarters.

Although the large warehouses have been making headlines, vacancy for small warehouses between 25,000 and 100,000 SF stood at 4.7%, while larger warehouses 500,000 SF and up have been at 10.5%. With low vacancy of small product, developers are likely to see opportunity in this segment and focus on smaller distribution centers.


AnnualChange

Quarterly Change

2nd Qtr. Forecast*

VACANCY

NET ABSORPTION

UNDER CONSTRUCTION

RENTAL RATE

*Projected


DFW Market

DFW Warehouse

DFW Flex



Absorption (Thousand Square Feet) 5,389 5,132 257

New Supply (Thousand Square Feet) 4,182 4,100 82

Under Construction (Thousand Square Feet) 20,014 19,585 429


Average $5.40 $4.42 $9.45






Vacancy Rate> Vacancy decreased slightly in Q1 2016 to 7.0% from 7.2% at the end of

Q4 2015.> Year-over-year, vacancy is down 0.7% from Q1 2015, and only 0.2%

above a trough of 6.8% in Q3 2015.> Over 52 million square feet was vacant at the end of Q1 2016, which is

almost four million less than at the end of Q1 2015. Sublease vacancy has been almost negligible, hovering around 1 million square feet, 1.9% of all vacant space, for the last several years.

Absorption & Demand> The areas of the DFW with the highest absorption rate this quarter were

Alliance, Great Southwest, and North Fort Worth.> Net absorption for Q1 2016 in DFW totaled 5,389,157 square feet, 14.9%

higher than net absorption in Q1 2015.> Major move-ins for Q1 2016 include Niagara Bottling occupying 630,000

SF at 12000 Grady Niblo Rd, and Walmart.com’s lease of over 1 million SF in Alliance.

Rental Rates> The average rental rate for Q1 2016 was $5.40, which is a slight

$0.07 increase from Q4 2015. The average flex rate was $9.45, while warehouse averaged $4.42.

> South Dallas continued to have the lowest warehouse rate at $3.54 per square foot, while the North US 75 Corridor had the highest rates of $7.00.

> Warehouse rental rates have experienced slower growth over the past two quarters, and should level off slightly in the coming quarters. Rates are falling in some markets that have seen a lot of construction such as Alliance, where rates fell 2.1%, and Far North I-35E Corridor where rates fell $0.11 from Q1 2015.

Construction> At the end of Q1 2016, there were 73 buildings totaling over 20 million

square feet under construction in the Dallas-Fort Worth market. Such levels of construction have not been seen since Q4 2007.

> The average size of industrial and flex buildings under construction at the end of Q1 2016 was 274,176 SF, which is up about 215,000 SF from the trough in late 2009-2010, and up 80,000 from the average size in the last building boom in Q4 2007.


-1 1 2

Alliance

East Dallas

East Dallas

Far North I-35E Corridor

Great Southwest

Metropolitan / Addison

North Fort Worth

North I-35E Corridor

North US 75 Corridor

Northeast Dallas / Garland

South Dallas

South Fort Worth

West I-30 Corridor

Outlying Metroplex

Millions

Construction Absorption



DFW 4.1% 3.7%

Texas 4.3% 4.5%

U.S. 5.7% 5.1%


# of Jobs Added

DFW 3.9% 129.9K

Texas 1.6% 185K

U.S. 1.9% 2,778K

Under Construction & Absorption (YTD)


Flex8.9%

10,178,536 SF

Warehouse6.7%

43,638,786 SF

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

-6,000,000

-3,000,000

0

3,000,000

6,000,000

9,000,000

12,000,000

15,000,000

18,000,000

21,000,000

24,000,000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016


0%

5%

10%

15%

20%

25%

0

2,500,000

5,000,000

7,500,000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

New Supply Absorption Vacancy Rate

Squa

re F

eet

Vaca

ncy

Rate



Dallas/Fort Worth Industrial Market Summary

EXISTING PROPERTIES


InventorySF

CONSTRUCTION

DirectVacancy

Rate

TotalVacant

SF

SubleaseVacancy

Rate

New SupplyYTDSF

UnderConstruction

SF


AverageRate

(NNN)

Net AbsYTDSF

Net AbsCurrent Qtr

SF

Vacancy Rate

Current

Vacancy Rate

Prior Qtr

RENT

Flex Market

Alliance 2,284,85843 0.4% 0.0% 10,150 0.4% 0.4% (1,500) 0 250,000(1,500) $ 8.20DFW Airport 9,020,117226 14.0% 0.0% 1,265,416 14.0% 13.7% (25,820) 0 0(25,820) $ 9.58East Dallas 6,017,033214 16.3% 0.0% 982,263 16.3% 16.6% 37,385 25,755 037,385 $ 6.95Far North I-35E Corridor 9,473,197273 12.2% 0.0% 1,154,692 12.2% 12.4% 19,229 0 019,229 $ 9.68Great Southwest 10,466,458337 12.0% 0.2% 1,278,558 12.2% 12.5% 79,669 56,195 079,669 $ 7.82Metropolitan / Addison 8,584,068243 12.5% 0.1% 1,075,000 12.5% 12.7% 12,400 0 012,400 $ 11.18North Fort Worth 2,463,76564 9.3% 0.0% 230,120 9.3% 9.6% 6,325 0 06,325 $ 8.46North I-35E Corridor 21,387,298751 5.9% 0.0% 1,251,911 5.9% 5.9% 621 0 0621 $ 10.60North US 75 Corridor 17,847,410458 9.5% 0.4% 1,762,395 9.9% 10.0% 13,569 0 179,33513,569 $ 10.14Northeast Dallas / Garland 8,829,732320 4.8% 0.0% 420,404 4.8% 5.2% 36,662 0 036,662 $ 6.38South Dallas 2,877,051137 2.2% 1.1% 95,456 3.3% 3.4% 3,200 0 03,200 $ 6.71South Fort Worth 9,549,811346 4.6% 0.1% 441,285 4.6% 5.5% 81,110 0 081,110 $ 6.91West I-30 Corridor 2,087,64178 5.1% 0.0% 107,282 5.1% 5.5% 7,350 0 07,350 $ 6.12Outlying Metroplex 3,162,37599 3.3% 0.0% 103,604 3.3% 2.9% (13,375) 0 0(13,375) $ 8.07Total DFW Market 114,050,8143,589 8.8% 0.1% 10,178,536 8.9% 9.1% 256,825 81,950 429,335256,825 $ 9.45

Warehouse Market

Alliance 33,253,992165 12.8% 0.0% 4,253,022 12.8% 16.5% 1,809,793 671,550 825,7011,809,793 $ 3.58DFW Airport 60,298,787459 8.6% 0.1% 5,225,049 8.7% 7.8% 103,301 700,521 747,359103,301 $ 4.75East Dallas 30,165,471521 5.1% 0.1% 1,551,236 5.1% 4.7% (145,995) 0 0(145,995) $ 3.59Far North I-35E Corridor 62,566,497616 7.1% 0.2% 4,534,952 7.2% 7.4% 461,439 366,580 1,781,631461,439 $ 4.19Great Southwest 88,314,9611,102 3.8% 0.2% 3,499,064 4.0% 3.9% 606,085 701,034 5,017,698606,085 $ 4.09Metropolitan / Addison 12,637,488220 3.9% 0.0% 495,728 3.9% 2.5% (176,550) 0 0(176,550) $ 5.27North Fort Worth 32,328,967398 6.2% 0.1% 2,032,553 6.3% 6.4% 791,118 789,670 2,569,599791,118 $ 3.85North I-35E Corridor 66,552,7181,716 3.2% 0.0% 2,168,970 3.3% 3.4% 100,513 0 0100,513 $ 5.08North US 75 Corridor 26,814,255404 3.5% 0.3% 1,012,937 3.8% 4.9% 447,070 146,910 261,166447,070 $ 7.00Northeast Dallas / Garland 40,035,101592 6.0% 1.0% 2,806,762 7.0% 8.5% 610,441 0 582,350610,441 $ 4.25South Dallas 64,011,562533 10.0% 0.0% 6,387,015 10.0% 10.2% 374,816 249,640 7,252,832374,816 $ 3.54South Fort Worth 58,541,8411,195 5.0% 0.0% 2,934,697 5.0% 4.9% (37,398) 16,575 0(37,398) $ 4.18West I-30 Corridor 32,846,455319 16.3% 0.0% 5,337,698 16.3% 15.9% 117,503 264,413 292,200117,503 $ 4.88Outlying Metroplex 47,662,303790 2.9% 0.0% 1,399,103 2.9% 2.7% 70,196 193,070 255,00070,196 $ 4.69Total DFW Market 656,030,3989,030 6.5% 0.1% 43,638,786 6.7% 6.9% 5,132,332 4,099,963 19,585,5365,132,332 $ 4.42

Industrial Market

Alliance 35,538,850208 12.0% 0.0% 4,263,172 12.0% 15.5% 1,808,293 671,550 1,075,7011,808,293 $ 3.63DFW Airport 69,318,904685 9.3% 0.1% 6,490,465 9.4% 8.6% 77,481 700,521 747,35977,481 $ 6.34East Dallas 36,182,504735 6.9% 0.1% 2,533,499 7.0% 6.6% (108,610) 25,755 0(108,610) $ 3.99Far North I-35E Corridor 72,039,694889 7.8% 0.1% 5,689,644 7.9% 8.1% 480,668 366,580 1,781,631480,668 $ 5.09Great Southwest 98,781,4191,439 4.7% 0.2% 4,777,622 4.8% 4.8% 685,754 757,229 5,017,698685,754 $ 4.61Metropolitan / Addison 21,221,556463 7.4% 0.0% 1,570,728 7.4% 6.6% (164,150) 0 0(164,150) $ 7.89North Fort Worth 34,792,732462 6.4% 0.1% 2,262,673 6.5% 6.7% 797,443 789,670 2,569,599797,443 $ 4.05North I-35E Corridor 87,940,0162,467 3.9% 0.0% 3,420,881 3.9% 4.0% 101,134 0 0101,134 $ 6.32North US 75 Corridor 44,661,665862 5.9% 0.3% 2,775,332 6.2% 6.9% 460,639 146,910 440,501460,639 $ 8.72Northeast Dallas / Garland 48,864,833912 5.8% 0.8% 3,227,166 6.6% 7.9% 647,103 0 582,350647,103 $ 4.78South Dallas 66,888,613670 9.6% 0.0% 6,482,471 9.7% 9.9% 378,016 249,640 7,252,832378,016 $ 3.62South Fort Worth 68,091,6521,541 4.9% 0.0% 3,375,982 5.0% 5.0% 43,712 16,575 043,712 $ 4.43West I-30 Corridor 34,934,096397 15.6% 0.0% 5,444,980 15.6% 15.3% 124,853 264,413 292,200124,853 $ 4.91Outlying Metroplex 50,824,678889 2.9% 0.0% 1,502,707 3.0% 2.7% 56,821 193,070 255,00056,821 $ 4.92Total DFW Market 770,081,21212,619 6.9% 0.1% 53,817,322 7.0% 7.2% 5,389,157 4,181,913 20,014,8715,389,157 $ 5.40


212,180,0771Q 6102 12,619 6.9% 0.1% 53,817,322 7.0% 7.2% 5,389,157 4,181,913 20,014,8715,389,157 $ 5.40441,601,3571Q 5102 12,531 7.5% 0.1% 57,636,373 7.7% 7.6% 4,689,261 5,616,329 13,494,3784,689,261 $ 5.13462,447,4371Q 4102 12,458 7.1% 0.1% 53,261,940 7.2% 7.2% 4,551,848 5,129,168 14,685,4354,551,848 $ 4.88958,846,3271Q 3102 12,422 8.5% 0.2% 62,375,503 8.6% 8.7% 2,289,268 1,492,448 6,532,0262,289,268 $ 4.51515,552,0271Q 2102 12,392 9.8% 0.1% 71,585,217 9.9% 10.0% 896,776 286,527 2,694,792896,776 $ 4.32







RESEARCHERS:



77

20

20

2020

2020

20

30

30

3030

3030

8080

820

820

820

820

DNT

DNT

DNT

DNT

LLT

LLT

LLT

45

45

75

75

1709

12

12

12

12

12

12

12

635

635

635

635

175

175

408

161

161

16126

114

114

121

121

121

121

121

2409

303

352

190

190

190

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190190

78

78

66

205

183

183

183

183

183

67

67

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67

360

360

360

377

377

377

377

380

380

380

199

287

287

287

287B

287B

35

35E

35W

35W

35W

35E

35W

35E35W

WEST TARRANT COUNTY

WEST DFWAIRPORT

UPPERGREAT

SOUTHWEST

ARLINGTON



FORT WORTH


SOUTHWEST TARRANT

RED BIRDAIRPORT



LOWERGREAT

SOUTHWEST

MANSFIELD


ALLEN / McKINNEY

PLANO

ROCKWALL


RICHARDSON

CENTRALEAST DALLAS

EAST DALLASMESQUITE

EAST DFWAIRPORT

LEWISVILLE




EAST HINES NORTH

NORTHTRINITY

WESTHINESNORTH

WEST BROOKHOLLOW



35E

EAST BROOKHOLLOW8

6

7

4

13 3

1

12

2

9

14

115

10

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14


1 Alliance 9 North US 75 Corridor35.5m SF 12% Vac UC = 1.1m SF $ 3.63 PSF 44.7m SF 6.2% Vac UC = 0.4m SF $ 8.72 PSF

2 DFW Airport 10 Northeast Dallas / Garland69.3m SF 9.4% Vac UC = 0.7m SF $ 6.34 PSF 48.9m SF 6.6% Vac UC = 0.6m SF $ 4.78 PSF

3 East Dallas 11 South Dallas36.2m SF 7% Vac UC = None $ 3.99 PSF 60.8m SF 9.7% Vac UC = 7.3m SF $ 3.62 PSF

4 Far North I-35E Corridor 12 South Fort Worth72m SF 7.9% Vac UC = 1.8m SF $ 5.09 PSF 68.1m SF 5% Vac UC = None $ 4.43 PSF

5 Great Southwest 13 West I-30 Corridor98.8m SF 4.8% Vac UC = 5m SF $ 4.61 PSF 34.9m SF 15.6% Vac UC = 0.3m SF $ 4.91 PSF

6 Metropolitan / Addison 14 Outlying21.2m SF 7.4% Vac UC = None $ 7.89 PSF 50.8m SF 3% Vac UC = 0.3m SF $ 4.92 PSF

7 North Fort Worth Total Industrial Market34.8m SF 6.5% Vac UC = 2.6m SF $ 4.05 PSF 770.1m SF 7% Vac UC = 20m SF $ 5.40 PSF


208 Bldgs

685 Bldgs

735 Bldgs

889 Bldgs

1,439 Bldgs

463 Bldgs

463 Bldgs

2,467 Bldgs

862 Bldgs

912 Bldgs

670 Bldgs

1,541 Bldgs

397 Bldgs

889 Bldgs

12,619 Bldgs





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Dallas-Fort Worth Industrial Research & Forecast … › Documents › MktResearch ›...

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