Dallas - Fort Worth Industrial
Key Takeaways
• Construction activity continued its decline in Q4 2024, with just 19.5 million square feet under development, a significant drop from this time last year when over 42 million square feet were under construction.
• Q4’s new supply also continued to decline to 5.2 million square feet, which is the lowest delivery amount since 2019.
• Vacancy rates increased again this quarter, with the overall rate reaching 9.8% and the warehouse market hitting 11.1% for the first time since 2011.
• A slight drop in overall rental rates was recorded this quarter, the first such decline since 2021, hinting at a possible market adjustment.
The Dallas-Fort Worth industrial market wrapped up 2024 with market-driven conditions slowing construction activity, as development activity tapered to 19.5 million square feet and new supply fell to 5.2 million square feet. This moderation was necessary to allow the market to absorb prior deliveries more effectively. Net absorption reached 19.2 million square feet—while not matching the exceptional levels seen during the pandemic surge, it still reflects healthy leasing demand and business confidence. Vacancy rates edged up to 9.8%, creating a better balance between supply and demand. Dallas-Fort Worth remains a leading industrial hub, benefiting from its cost advantages, strategic location, and deep labor pool. Recent reductions in lease rates have further attracted tenants, positioning the region for a promising 2025.
For the second year in a row, annual new supply almost doubled net absorption which continue to push vacancy levels upward for the 3rd year in a row.
Recent Transactions
At the end of fourth quarter 2024, building inventory in the DFW Warehouse/Distribution Market - Big-Box consisted of 430,932,331 square feet in 904 properties. Net absorption year-to-date through fourth quarter 2024 was 17,699,526 square feet. The vacancy rate stood at 14.2%, an increase from the rate of 12.1% reported at this time last year. Quoted rental rates averaged $6.87 NNN per square foot, which is up 8.4% compared to the rate of $6.34 NNN from the same quarter last year. As of end of Q4 2024, 66 properties were delivered year-to-date, totaling 30,203,403 square feet, and 8,692,905 square feet in 23 properties were under construction.
¹ Big-Box is defined as Warehouse/Distribution buildings over 200,000 square feet and minimum clear height of 28 feet.
At the end of fourth quarter 2024, building inventory in the DFW Warehouse/Distribution Market - Non Big-Box consisted of 454,858,548 square feet in 9,117 properties. Net absorption year-to-date through fourth quarter 2024 was negative 1,164,390 square feet. The vacancy rate stood at 8.1%, an increase from the rate of 6.2% reported at this time last year. Quoted rental rates averaged $9.38 NNN per square foot, which is up 8.7% compared to the rate of $9.21 NNN from the same quarter last year. As of end of Q4 2024, 121 properties were delivered year-to-date, totaling 8,254,435 square feet, and 8,120,599 square feet in 106 properties were under construction.
¹ Big-Box is defined as Warehouse/Distribution buildings over 200,000 square feet and minimum clear height of 28 feet.
At the end of fourth quarter 2024, building inventory in the DFW Warehouse/Distribution Market consisted of 885,790,879 square feet in 10,021 properties. Net absorption year-to-date through fourth quarter 2024 was 16,535,136 square feet. The vacancy rate stood at 11.1%, an increase from the rate of 9.0% reported at this time last year. Quoted rental rates averaged $8.98 NNN per square foot, which is up 4.8% compared to the rate of $8.57 NNN from the same quarter last year. As of end of Q4 2024, 187 properties were delivered year-to-date, totaling 38,457,918 square feet, and 16,813,504 square feet in 129 properties were under construction.
10,021
38.5 MSF | 187 Bldgs
At the end of fourth quarter 2024, building inventory in the DFW Flex Market consisted of 107,790,020 square feet in 3,515 properties. Net absorption year-to-date through fourth quarter 2024 was negative 569,530 square feet. The vacancy rate stood at 6.0%, an increase from the rate of 5.2% reported at this time last year. Quoted rental rates averaged $13.96 NNN per square foot, which is relatively flat compared to the rate of $14.02 NNN from the same quarter last year. As of end of Q4 2024, 19 properties were delivered year-to-date, totaling 412,653 square feet, and 743,500 square feet in 15 properties were under construction.
At the end of fourth quarter 2024, building inventory in the DFW Manufacturing Market consisted of 114,832,504 square feet in 1,007 properties. Net absorption year-to-date through fourth quarter 2024 was 3,315,820 square feet. The vacancy rate stood at 3.2%, a decrease from the rate of 4.2% reported at this time last year. Quoted rental rates averaged $7.00 NNN per square foot, which is down 14.6% compared to the rate of $8.20 NNN from the same quarter last year. As of end of Q4 2024, 7 properties were delivered year-to-date, totaling 2,251,397 square feet, and 1,948,740 square feet in 7 properties were under construction.
3.3 MSF net absorption YTD
2.3 MSF | 7 Bldgs 1.9 MSF | 7 Bldgs new supply under construction
and Rental Rate Trend
hannah.williams@colliers.com
$4.5B+
$99B