Industrial Mid-Year Report_Q2 2019_FINAL
Industrial Insider M I D -Y E A R R E P O R T | Q 2 2 0 1 9
Cushman &Wakefield Dallas/Fort Worth
2
Q2 2019
Industrial Insider Mid-Year Report
Table of Contents
MID-YEAR UPDATE
4
DALLAS MARKET OVERVIEW
6
DFW OVERVIEW: SUPPLY
12
DFW OVERVIEW: DEMAND
18
SUBMARKET SNAPSHOTS
26
28
Allen/McKinney
32
Alliance/North Fort Worth
40
Brookhollow/Trinity
45
DFW Airport
50
East Fort Worth
54
Far North/I-35
58
Garland/Mesquite
66
Great Southwest
72
North Dallas/Metropolitan
76
Pinnacle/Turnpike
80
Redbird
84
Richardson/Plano
88
South Dallas
94
South Fort Worth
98
Valwood/N Stemmons
102
Walnut Hill/Stemmons
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3
Cushman &Wakefield Dallas/Fort Worth
75
35
AUBREY
MELISSA
380
DECATUR
380
DENTON
MCKINNEY
FARM
35W
Allen/McKinney
287
Far North/I-35
ALLEN
35E
PLANO
75
Richardson/Plano
FLOWER MOUND
Valwood/ N Stemmons
Alliance
RICHARDSON
COPPELL
North Dallas/ Metropolitan
ROWLETT
30
KELLER
35E
DFW Airport
35W
Garland
Walnut Hill/ Stemmons
12
North Fort Worth
IRVING
635
East D
75
Brookhollow/Trinity
Central Dallas
HALTOM CITY
DAL LAS
West Fort Worth
Pinnacle/Turnpike
East Fort Worth
Mesquite
30
ARLINGTON
Central Fort Worth
GRAND PRAIRIE
30
20
Great Southwest
FORT WORTH
20
12
Redbird
20
20
BENBROOK
DUNCANVILLE
35W
South Dallas
175
South Fort Worth
CEDAR HILL
LANCASTER
287
BURLESON
FERRIS
CRESSON
34
45
35E
MIDLOTHIAN
35W MID-YEAR NET ABSORPTION (11 MSF) OUTPACES MID-YEAR CONSTRUCTION COMPLETIONS (9.8 MSF) TIGHTENING THE OVERALL VACANCY TO 6.9% (LOWER 20 BPS FROM 2018 YEAR-END).
4 Q2 2019
Industrial Insider Mid-Year Report
N
Mid-Year Update
Welcome back to The Industrial Insider. We hope everyone is enjoying their summer. Our team is excited to present the year-to-date activity in the Dallas/ Fort Worth market with our Industrial Insider – 2019 Mid-Year Report. In this report, we summarize the performance of the DFW industrial market year-to-date and inform you on what can be expected for the second half of 2019. The DFW industrial market had two strong quarters of overall net absorption, surpassing 11 MSF at mid- year. This puts us on track to reach 20 MSF of overall net absorption for the fifth consecutive year. Net absorption outpaced the 9.8 MSF of mid-year
construction completions, tightening the overall vacancy rate to 6.9% (lower by 20 basis points from 2018 year-end). Construction activity remains elevated with 30.1 MSF of new supply under construction today, of which 10.7 MSF is build-to-suit or preleased product. Looking ahead to the rest of 2019, we believe the DFW market will continue to see robust supply and demand activity. Mid-year active tenant requirements look strong at approximately 22 MSF. We hope you find this special 2019 Mid- Year Report edition of our Industrial Insider informative. The mid-year numbers leave us optimistic for the remainder of 2019.
RSVILLE
380
ROYSE CITY
llas
34
TERRELL
KAUFMAN
175
Kurt Griffin, SIOR Executive Managing Director +1 972 663 9818 kurt.griffin@cushwake.com
Nathan Orbin, SIOR Executive Managing Director +1 972 663 9819 nathan.orbin@cushwake.com
Ann Jaggars Analyst +1 972 663 9775 ann.jaggars@cushwake.com
Q2 2019
5
Cushman &Wakefield Dallas/Fort Worth
DFW Overview
6 Q2 2019
Industrial Insider Mid-Year Report
Q2 2019
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Cushman &Wakefield Dallas/Fort Worth
DFW Overview
The Dallas/Fort Worth industrial market continues to impress us at the mid-year point for 2019 as it remains a leader among major U.S. gateway markets from both a supply and demand perspective. Attention and focus on the DFW industrial market from tenants, developers and investors is at an all-time high. DFW’s spot as #1 in both population growth and job growth, as well as its thriving economy remain essential contributors to the robust industrial market. Strong industrial demand in the DFW market continues at mid-year, as demonstrated by the 11 MSF+ of net absorption and 14.6 MSF of leasing activity year-to date. Despite the delivery of nearly 9.8 MSF of new
supply during the first two quarters, the DFW industrial market’s vacancy tightened to 6.9%, down 20 bps from 2018 year-end. The DFW Airport submarket leads the greater DFW market in both net absorption (3.3 MSF) and new supply (3.4 MSF). The South Dallas submarket leads in year-to-date leasing activity with 4 MSF. Alliance leads in construction activity with 8.1 MSF of product under construction. Looking ahead, we don’t see any near-term slowdown in the Dallas/ Fort Worth industrial market and we anticipate DFW will again reach 20 MSF of net absorption for the fifth straight year.
DFW INDUSTRIAL SUBMARKET DEMAND LEADERS AT MID-
YEAR ARE DFW AIRPORT, GREAT SOUTHWEST AND
ALLIANCE WITH NET ABSORPTIONS OF 3.3 MSF, 2.8 MSF AND 1.5 MSF, RESPECTIVELY.
MARKET SUMMARY
2011
2012 2013 2014 2015 2016 2017 2018 YTD 2019
627.2
629.4
636.8 653.9
673.4
694.5
722.8
750.9
760.7
Inventory (MSF) Overall Net Absorption (MSF) Overall Vacancy
12.5
12.1
17.4
15.6
20.2
23.7
25.9
22.9
11.1
10.4% 8.7% 7.0% 7.1% 6.8% 6.0% 6.5% 7.1% 6.9%
Completions (MSF)
2.0
2.1
7.4
17.1
19.6
21.2
29.2
26.9
9.8
Under Construction (MSF)
2.0
4.0
13.9
16.6
20.3
26.6
19.3
21.7
30.1
8 Q2 2019
Industrial Insider Mid-Year Report
DFW Overview
OVERALL NET ABSORPTION 11.1 MSF 6.9% 9.8 MSF 30.1 MSF OVERALL VACANCY
COMPLETIONS
UNDER CONSTRUCTION
HISTORICAL DFW INDUSTRIAL ABSORPTION
30 MSF
25 MSF
20 MSF
15 MSF
10 MSF
5 MSF
MSF
2010
2011
2012
2013
2014
2015
2016
2017
2018
Est 2019
NET ABSORPTION NET ABSORPTION
20 MSF THRESHOLD 20 MSF THRESHOLD
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9
Cushman &Wakefield Dallas/Fort Worth
VACANCY
15-Year Historical Average = 8.8% 15-YEAR HISTORICAL AVERAGE = 8.8%
12.0%
10.0%
8.0%
6.0%
4.0%
2.0%
0.0%
2011
2012
2013
2014
2015
2016
2017
2018
YTD 2019
OVERALL VACANCY RATE
HISTORICAL AVERAGE
NET ABSORPTIONS / COMPLETIONS
NET ABSORPTION / COMPLETIONS
35.0
30.0
25.0
20.0
15.0 Millions
10.0
5.0
0.0
2011
2012
2013
2014
2015
2016
2017
2018 YTD 2019
OVERALL NET ABSORPTION COMPLETIONS
10 Q2 2019
Industrial Insider Mid-Year Report
DFW Overview
Overall Vacancy Rate
YTDNet Absorption
YTD Leasing Activity*
Under Construction
YTD Completions
Submarket
Inventory
Allen/McKinney
10,602,866
7.7%
-126,325
115,475
147,500
102,954
Brookhollow/Trinity
49,164,271
2.6%
-308,273
20,812
0
0
Central Dallas
14,398,395
2.5%
0
0
0
0
DFW Airport
86,489,225
8.8%
3,314,713
1,609,062
4,507,593
3,351,290
Far North/I-35
21,020,767
4.0%
132,175
82,799
484,756
80,000
Garland
44,739,447
8.5%
77,703
209,582
0
249,097
Great Southwest
112,661,257
4.0%
2,827,694
1,936,278
4,753,882
980,497
Mesquite
19,395,850
11.2%
469,695
763,662
1,233,252
877,230
North Dallas/Metropolitan
19,235,891
7.2%
-67,187
166,326
0
0
Pinnacle/Turnpike
27,766,375
6.7%
701,032
1,270,757
2,626,309
12,000
Redbird
22,284,459
3.6%
-16,591
0
863,328
0
Richardson/Plano
36,043,766
8.4%
157,120
253,690
240,654
738,740
East Dallas
10,153,570
1.5%
745,584
112,400
1,207,538
650,000
South Dallas
54,326,643
19.8%
646,458
3,990,190 2,460,820
404,157
Valwood/N Stemmons
50,540,513
5.5%
246,740
1,007,577
674,491
151,176
Walnut Hill/Stemmons
22,165,365
2.7%
-52,699
49,297
389,234
0
DALLAS TOTAL
600,988,660
7.1%
8,747,839
11,587,907
19,589,357
7,597,141
Alliance
43,540,762
9.7%
1,548,994
1,822,396
8,087,783
1,279,500
Central Fort Worth
15,978,726
2.4%
2,009
54,368
0
0
East Fort Worth
23,504,461
6.1%
10,060
25,000
100,167
22,050
North Fort Worth
44,416,401
3.6%
767,813
1,065,109
2,343,477
125,029
South Fort Worth
27,922,429
6.8%
-3,000
0
0
754,585
West Fort Worth
4,344,345
10.2%
-20,400
0
0
0
FORT WORTH TOTAL
159,707,124
6.3%
2,305,476
2,966,873
10,531,427
2,181,164
DFW TOTAL
9,778,305
760,695,784
6.9%
11,053,315
14,554,780 30,120,784
*YTD Leasing Activity exclusive of renewals
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Cushman &Wakefield Dallas/Fort Worth
DFW Overview: Supply
12 Q2 2019
Industrial Insider Mid-Year Report
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Cushman &Wakefield Dallas/Fort Worth
Supply Completed First Generation Vacancies
COMPLETED FIRST GENERATION VACANCIES
Allen/McKinney Far North/I-35 Mesquite Pinnacle/Turnpike Redbird Walnut Hill/Stemmons
Alliance Garland N Stemmons/Valwood South Dallas East Ft. Worth
DFW Airport GSW
North Ft Worth South Ft Worth Richardson/Plano
14 Q2 2019
Industrial Insider Mid-Year Report
SUM OF AVAILABLE SPACE - Completed First Generation Vacancies
Building Size (SF)
100,000-249,999 250,000-499,999 500,000-749,999 750,000+
Grand Total
Allen/McKinney
290,867
290,867
Alliance
234,277
752,589
1,089,642
2,076,508
DFW Airport
639,420
863,549
185,344
1,000,584
2,688,897
Garland
576,136
329,091
905,227
GSW
264,821
843,862
1,108,683
N Stemmons/Valwood
118,195
118,195
North Ft Worth
321,008
270,000
591,008
Richardson/Plano
397,471
397,471
South Dallas
773,256
1,236,929
2,508,363
3,517,827
8,036,375
South Ft Worth
323,845
651,961
975,806
Total
3,939,296
4,947,981
2,693,707
5,608,053
17,189,037
COUNT OF AVAILABLE SPACE - Completed First Generation Vacancies
(VACANCY WITHIN RANGE)
Building Size (SF)
100,000-249,999 250,000-499,999 500,000-749,999 750,000+
Grand Total
Allen/McKinney
2
2
Alliance
1
3
1
5
DFW Airport
6
3
1
1
11
Garland
4
1
5
GSW
3
5
8
N Stemmons/Valwood
1
1
North Ft Worth
3
1
4
Richardson/Plano
3
3
South Dallas
4
4
4
5
17
South Ft Worth
2
3
5
Total
29
20
5
7
61
Q2 2019
15
Cushman &Wakefield Dallas/Fort Worth
Supply
Under Construction Vacancies
UNDER CONSTRUCTION VACANCIES
Allen/McKinney Far North/I-35 Mesquite Pinnacle/Turnpike Redbird Walnut Hill/Stemmons
Alliance Garland N Stemmons/Valwood South Dallas East Ft. Worth
DFW Airport GSW
North Ft Worth South Ft Worth Richardson/Plano
16 Q2 2019
Industrial Insider Mid-Year Report
SUM OF AVAILABLE SPACE - Under Construction Vacancies
Building Size (SF)
100,000-249,999 250,000-499,999 500,000-749,999 750,000+
Grand Total
Alliance
656,538
1,889,480
1,177,984
2,581,781
6,305,783
DFW Airport
885,114
1,570,044
709,703
1,106,315
4,271,176
Far North/I-35
282,526
282,526
802,672
GSW
716,170
576,123
2,094,965
Mesquite
248,890
111,295
584,089
944,274
North Ft Worth
643,089
581,000
1,023,488
2,247,577
296,615
Pinnacle/Turnpike
193,000
1,281,714
1,771,329
South Dallas
106,700
106,700
Walnut Hill/Stemmons
388,822
388,822
Total
4,120,849
4,670,106
4,910,613
4,711,584
18,413,152
COUNT OF AVAILABLE SPACE - Under Construction Vacancies
(VACANCY WITHIN RANGE)
Building Size (SF)
100,000-249,999 250,000-499,999 500,000-749,999 750,000+
Grand Total
Alliance
3
5
2
3
13
DFW Airport
6
4
1
1
12
Far North/I-35
2
2
GSW
5
2
1
8
Mesquite
1
1
1
3
North Ft Worth
3
1
1
5
Pinnacle/Turnpike
1
1
2
4
South Dallas
1
1
Walnut Hill/Stemmons
2
2
Total
24
13
8
5
50
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Cushman &Wakefield Dallas/Fort Worth
DFW Overview: Demand
18 Q2 2019
Industrial Insider Mid-Year Report
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19
Cushman &Wakefield Dallas/Fort Worth
Demand
ACTIVE REQUIREMENTS TOTALING 22,010,000 SF
ESTIMATED OCCUPANCY TIMELINE
6,000,000
5,000,000
4,000,000
3,000,000
2,000,000
1,000,000
0 2019/Q3 2019/Q4 2020/Q1 2020/Q2 2020/Q3 2020/Q4 2021/Q1
HISTORICAL REQUIREMENTS (SF)
25,000,000
20,000,000
15,000,000
10,000,000
2015
2016
2017
2018
2019
20 Q2 2019
Industrial Insider Mid-Year Report
REQUIREMENTS BY SIZE
Size (SF)
Requirements
1,000,000 +
8
500,000 - 999,999
11
250,000 - 499,999
18
REQUIREMENTS BY SUBMARKET (SF)*
SOUTH DALLAS
18,725,000
ALLIANCE
13,950,000
13,685,000
DFWAIRPORT
8,950,000
NORTH FTWORTH
PINNACLE/TURNPIKE
6,585,000
GSW
6,060,000
SOUTH FTWORTH
4,625,000
4,150,000
MESQUITE
GARLAND
2,225,000
2,100,000
N STEMMONS/VALWOOD
1,200,000
FAR NORTH/I-35
0
5,000,000
10,000,000
15,000,000
20,000,000
*Requirements looking market wide will be included in multiple markets
TA B L E O F CON T E N T S
Q2 2019
21
Cushman &Wakefield Dallas/Fort Worth
DFW INDUSTRIAL | HISTORICAL TRANSACTIONS BY SIZE RANGE
2017
2018
YTD 2019
250K-499K SF
18
6.5 MSF
26
9.1 MSF
12
4.9 MSF
500K-749K SF
12
7.2 MSF
15
9.4 MSF
2
1.5 MSF
750K SF+
10
9.5 MSF
10
10.5 MSF
3
3.1 MSF
TOTAL
40
23.2 MSF
51
29 MSF
17
9.5 MSF
*Includes Renewals, Spec and BTS transactions
2019 YEAR TO DATE BIG DEALS LIST | DFW INDUSTRIAL
TENANT NAME
SIZE (SF)
DEAL TYPE
Smucker's
1,075,260
First Gen Spec Lease
Whirlpool
1,020,050
Renewal
Georgia Pacific
1,004,674
BTS
Sam's Club
729,157
Renewal (Expansion)
CTDI
705,955
First Gen Spec Lease
Hollingsworth
494,990
2nd Gen New Lease
Sally Beauty
494,041
First Gen Spec Lease
McKesson
490,825
Renewal (Expansion)
Systemax
487,804
First Gen Spec Lease
22 Q2 2019
Industrial Insider Mid-Year Report
Big Box Industrial
GATEWAY MARKETS | DEALS DONE (300 SF+) REPORT
DEALS DONE BY MARKET | 300K SF+ | YTD 2019
NEW JERSEY 1.4 MSF
ATLANTA 6.0 MSF
MARKET
TOTAL SF COUNT AVG SIZE
PA I-81/I-78 CORRIDOR 5.9 MSF
ATLANTA
6.0 MSF
14
431,036
CHICAGO
1.2 MSF
2
620,263
CHICAGO 1.2 MSF
DALLAS/FORT WORTH
9.2 MSF
16
574,856
INDIANAPOLIS
3.0 MSF
6
494,862
INLAND EMPIRE
5.2 MSF
7
749,842
PA I-81/I-78 CORRIDOR
5.9 MSF
9 660,546
INLAND EMPIRE 5.2 MSF
NEW JERSEY
1.4 MSF
2
697,500
DALLAS/FORT WORTH 9.2 MSF
INDIANAPOLIS 3.0 MSF
DEALS DONE BY TYPE | 300K SF+ | YTD 2019
29DEALS
DEAL TYPE TOTAL SF COUNT 2ND GEN 2.7 MSF 7 BTS 3.4 MSF 5 RENEWAL 8.4 MSF 15 SPEC 17.5 MSF 29
0 MSF 2 MSF 4 MSF 6 MSF 8 MSF 10 MSF 12 MSF 14 MSF 16 MSF 18 MSF 20 MSF
17.5MSF
17.5 MSF 29
15DEALS
8.4MSF
8.4 MSF 15
5DEALS
2.7MSF 7DEALS
3.4MSF
3.4 MSF 5
2.7 MSF 7
2nd Gen
BTS
Renewal
Spec
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Cushman &Wakefield Dallas/Fort Worth
Big Box Industrial
GATEWAY MARKETS | TENANTS IN THE MARKET REPORT
REQUIREMENTS BY MARKET (300K SF+)
Atlanta 15.1 MSF
PA 81/78 Corridor 22.6 MSF
MARKET
TOTAL SF COUNT AVG SIZE
ATLANTA
15.1 MSF
17
888,235
Central Valley 7.6 MSF
CENTRAL VALLEY
7.6 MSF
10 755,000
CHICAGO
8.3 MSF
9
916,667
New Jersey 3.8 MSF
Chicago 8.3 MSF
DALLAS/FORT WORTH 18.6 MSF
29
640,517
INDIANAPOLIS
10.0 MSF
12
829,167
Inland Empire 15.1 MSF
INLAND EMPIRE
15.1 MSF
17
888,235
Dallas/Fort Worth 18.6 MSF
NEW JERSEY
3.8 MSF
5
760,000
Indianapolis 10.0 MSF
PA 81/78 CORRIDOR
22.6 MSF
25
902,000
REQUIREMENTS BY SIZE RANGE (300K SF+)
SIZE RANGE TOTAL SF COUNT
52.5MSF 44DEALS
60 MSF
300K - 499K SF
6.9 MSF
19
50 MSF
500K - 749K SF
21.5 MSF
36
750K - 999K SF 20.0 MSF
25
40 MSF
1 MSF +
52.5 MSF
44
21.5MSF 36DEALS
20.0MSF 25DEALS
30 MSF
20 MSF
21.5 MSF 36
20.0 MSF 25
19DEALS
6.9MSF
10 MSF
6.9 MSF 19
0 MSF
300K - 499K SF 300K-499KSF 500K- 749KSF 750K- 999KSF 1MSF+ 500K - 749K SF
750K - 999K SF
24 Q2 2019
Industrial Insider Mid-Year Report
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25
Cushman &Wakefield Dallas/Fort Worth
Submarket Snapshots
26 Q2 2019
Industrial Insider Mid-Year Report
Q2 2019
27
Cushman &Wakefield Dallas/Fort Worth
Allen/ McKinney
28 Q2 2019
Industrial Insider Mid-Year Report
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29
Cushman &Wakefield Dallas/Fort Worth
Allen/McKinney
OBSERVATIONS & TRENDS
• Located on the northeastern most edge of the DFW market surrounded by heavy residential population • Most new supply to this submarket comes from built-to- suit, shallow bay, and high-finish deals (flex space) • Proximity to residential rooftops has motivated planning and ground breaking of several new speculative developments –– Hunt Southwest’s speculative 202K SF front-park, rear- load at I-75 and Wilmeth Road sold to MDC Investments, Inc. with no pre-leasing –– Dalfen’s McKinney Fulfillment Center, a speculative 115K SF front-park, rear-load at the SEC of Redbud Blvd and Corporate Drive in McKinney is 25% leased –– Sentinel Capital’s Phase I of McKinney National Business Park with two 75K SF rear-load speculative buildings just west of McKinney National Airport on FM 546 is expected to deliver by year-end SELECT NEW DEVELOPMENTS:
75
380
ALLEN/MCKINNEY
ALLEN
75
MURPHY
RICHARDSON
75
30
635
MARKET SUMMARY
ND
30
2011
2012 2013 2014 2015 2016 2017 2018 YTD 2019
LAS
80
9.3
9.3
9.3
9.4
9.4
9.9
10.0
10.5
10.6
Inventory (MSF)
Overall Net Absorption (MSF)
98,155
32,900 194,810 499,072 338,526 470,371 106,799 147,478 (126,325)
FORNEY
45
12
175
16.3% 15.8% 13.8% 8.0% 3.1% 2.3% 3.4% 6.5% 7.7% 20
Overall Vacancy
BALCH SPRINGS
20
305,000
0
66,000 117,261
0
423,927 198,000 455,722 102,954
Completions (MSF) HUTCHINS
175
Under Construction (MSF) 45
66,000 66,000 117,261
0
291,620 108,000 140,000 30,954 147,500
ANCASTER
WILMER
30 Q2 2019
Industrial Insider Mid-Year Report
VACANCY
Historical Average = 9.1%
HISTORICAL AVERAGE = 9.1%
18.0%
16.0%
14.0%
12.0%
10.0%
8.0%
6.0%
4.0%
2.0%
0.0%
2011
2012
2013
2014
2015
2016
2017
2018
YTD 2019
OVERALL VACANCY RATE
HISTORICAL AVERAGE
NET ABSORPTIONS / COMPLETIONS
NET ABSORPTION / COMPLETIONS
0.6
0.5
0.4
0.3
0.2 Millions
0.1
0.0
2011
2012
2013
2014
2015
2016
2017
2018 YTD 2019
(0.1)
(0.2)
OVERALL NET ABSORPTION COMPLETIONS
TA B L E O F CON T E N T S
Q2 2019
31
Cushman &Wakefield Dallas/Fort Worth
Alliance/North FortWorth
32 Q2 2019
Industrial Insider Mid-Year Report
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33
Cushman &Wakefield Dallas/Fort Worth
Alliance/North Fort Worth
The North Fort Worth and Alliance submarkets are situated along I-35W on the northwest edge of DFW. Both submarkets benefit from proximity to Alliance’s Global Logistics Hub, which includes the BNSF Railway Intermodal Terminal, Alliance Airport, and UPS and FedEx hubs. While Alliance has traditionally been a finite submarket mostly controlled by Hillwood, other developers and institutional investors have entered the area. There are currently at least ten other developers that have acquired or are actively pursuing developable land sites in Alliance. This marks the evolution of the submarket from one that has traditionally been tightly controlled with high barriers of entry, to one with a more diverse investment CORINTH DENTON 35E 35 35W
landscape. It will also bring efficiency to the leasing market as tenants will enjoy options to lease product controlled by a variety of owners. North Fort Worth is an infill submarket with few remaining large land parcels available for development. The submarket’s tenant base has a high percentage of rail users and light manufacturing. Alliance and North Fort Worth combined have delivered 1.4 MSF year- to-date and currently account for nearly 35% of the greater DFW market’s new development pipeline with 10.4 MSF of inventory under construction. The activity from a supply standpoint is being met by high demand with roughly 2.9 MSF of leasing activity during the first two quarters of 2019. FRISCO 380
LEASING ACTIVITY IN ALLIANCE/ NORTH FT. WORTH IS APPROXIMATELY 2.9 MSF AFTER THE FIRST TWO QUARTERS. THIS LEVEL OF DEMAND IS FUELING THE RECORD 10.4 MSF OF SUPPLY UNDER CONSTRUCTION 380
7
LITTLE ELM
287
ALL
HIGHLAND VILLAGE
75
OBSERVATIONS & TRENDS
PLANO
35E
• The Alliance and North Fort Worth submarkets lead the greater DFW industrial market in construction activity with 10.4 MSF of new product under construction at the end of Q2, 8.6 MSF (83%) of which is speculative • Elizabeth Creek Gateway, a two-building 1.2 MSF speculative project developed by DHL and sold in a Forward Commitment to State Farm, is 100% leased less than 6 months after delivery • At mid-year, the Alliance submarket has speculative projects by 7 different developers either under construction or close to breaking ground – the most the submarket has ever experienced • During the first two quarters, the submarkets combined posted over 2.9 MSF of leasing activity, 100% of which was for first-generation product IRVING FARMERS BRANCH HIGHLAND PARK DALLAS ADDISON CARROLLTON 635 635 35E 35E 30 12 114 114 121 360 183 121 12 75 75
FLOWER MOUND
114
ROANOKE
114
SOUTHLAKE
RICHARDSON
35W
GRAPEVINE
287
ALLIANCE
KELLER
NORTH RICHLAND HILLS
360
COLLEYVILLE
635
121
NORTH FORT WORTH
BEDFORD
SAGINAW
EULESS
199
183
HALTOM CITY
820
820
35W
121
30
WHITE SETTLEMENT
34 Q2 2019
GRAND PRAIRIE
ARLINGTON
12
FORT WORTH
35E
30
Industrial Insider Mid-Year Report
Q2 2019
35
Cushman &Wakefield Dallas/Fort Worth
YEAR-TO-DATE - Alliance/North Fort Worth Combined
OVERALL NET ABSORPTION 2.3MSF 1.4MSF 10.4MSF COMPLETIONS
UNDER CONSTRUCTION
MARKET SUMMARY - Alliance
2011
2012 2013 2014 2015 2016 2017 2018 YTD 2019
26.8
26.8
28.0
30.7
33.7
35.6
37.3
41.8
43.5
Inventory (MSF)
Overall Net Absorption (MSF)
746,052
1.4
1.4
1.4
1.3
2.5
4.0
1.6
1.5
13.8% 8.9% 7.5% 11.2% 15.1% 12.4% 6.0% 11.6% 9.7%
Overall Vacancy
25,000
0
1.1
2.7
3.0
1.8
1.7
4.0
1.3
Completions (MSF)
48,726
48,726
3.8
2.8
1.2
1.7
2.7
2.5
8.1
Under Construction (MSF)
VACANCY
NET ABSORPTIONS/COMPLETIONS
HISTORICAL AVERAGE = 11.3%
Historical Average = 11.3%
NET ABSORPTION / COMPLETIONS
16.0%
4.5
14.0%
4.0
12.0%
3.5
3.0
10.0%
2.5
8.0%
2.0 Millions
6.0%
1.5
4.0%
1.0
2.0%
0.5
0.0
0.0%
2011
2012
2013
2014
2015
2016
2017
2018 YTD2019
2011
2012
2013
2014
2015
2016
2017
2018
YTD2019
OVERALL NET ABSORPTION COMPLETIONS
OVERALL VACANCY RATE
HISTORICAL AVERAGE
36 Q2 2019
Industrial Insider Mid-Year Report
MARKET SUMMARY - North Fort Worth
2011
2012 2013 2014 2015 2016 2017 2018 YTD 2019
35.9
36.0
36.0
36.6
37.1
40.6
42.6
44.3
44.4
Inventory (MSF)
Overall Net Absorption (MSF)
541,333 328,639 373,041 309,287 (837,861)
4.5
2.3
725,536 767,813
5.3% 4.9% 3.8% 4.4% 8.1% 4.7% 4.0% 5.1% 3.6%
Overall Vacancy
58,603 188,000
0
541,216 559,367
3.4
2.1
1.7
125,029
Completions (MSF)
Under Construction (MSF) 188,000
0
0
0
3.3
1.4
1.1
1.1
2.3
VACANCY
NET ABSORPTIONS/COMPLETIONS
HISTORICAL AVERAGE = 5.2%
Historical Average = 5.2%
NET ABSORPTION / COMPLETIONS
9.0%
5.0
8.0%
4.0
7.0%
3.0
6.0%
5.0%
2.0
4.0%
Millions
1.0
3.0%
0.0
2.0%
2011
2012
2013
2014
2015
2016
2017
2018 YTD2019
1.0%
(1.0)
0.0%
2011
2012
2013
2014
2015
2016
2017
2018
YTD2019
(2.0)
OVERALL NET ABSORPTION COMPLETIONS
OVERALL VACANCY RATE
HISTORICAL AVERAGE
Q2 2019
37
Cushman &Wakefield Dallas/Fort Worth
Alliance/North Fort Worth
SELECT LEASING ACTIVITY
100K SF+ | YTD
Tenant
Building
Location
SF Leased
Sam's Club*
Speedway Distribution Center - Building A 2400 Short Track Ct, Fort Worth
729,157
CTDI
Elizabeth Creek Gateway - Building A
1753 Chaplin Dr, Fort Worth
705,956
Sally Beauty
Elizabeth Creek Gateway - Building B
15453 Wolff Crossing, Fort Worth
494,041
NEC N Beach St & Eagle Pky, Fort Worth
Stanley Black & Decker #2 Alliance Center North 10
425,000
Westrock Paper
Railhead Industrial Park - Building 2
5180 N Railhead Rd, Fort Worth
362,670
Saddle Creek Logistics* Alliance Gateway 50
743 Henrietta Creek Rd, Roanoke
287,240
Traulsen
Meacham Crossing
4601 Gold Spike Dr, Fort Worth
183,832
Ryder Integrated Logistics 35/820 at Mercantile Center
4800 N Sylvania Rd, Fort Worth
164,721
United Technologies (Goodrich)
Mercantile Distribution Center 38
4630 N Beach St, Haltom City
117,160
*Renewal
NEW DEVELOPMENTS Completed - First Generation Vacancies (100K SF+)
Building
Developer/Owner
RBA SF Available
TCC 35 Eagle - Building A
Trammell Crow / Prudential
1,089,642
1,089,642
Speedway Distribution Ctr - Building C
IDI Logistics
316,128
316,128
Park 820 - Building 2
Scannell
270,000
270,000
TCC 35 Eagle - Building H
Trammell Crow / Prudential
312,733
234,461
TCC 35 Eagle - Building J
Trammell Crow / Prudential
234,277
234,277
Fossil Creek Crossing - Building 1
KKR
219,396
219,396
Synergy Crossing - Building 200
Ironwood / TCRG Properties
496,782
202,000
38 Q2 2019
Industrial Insider Mid-Year Report
Under Construction - Availabilities (100K SF+)
Building
Developer/Owner
RBA
SF Available
Interstate Crossing
Hunt Southwest
1,023,488
1,023,488
Alliance Westport 11
Hillwood
1,002,536
1,002,536
Speedway Logistics Crossing - Building 2
Scannell
795,780
795,780
Alliance Center North 3
Hillwood
783,465
783,465
Westport Logistics - Building 2
PLR
677,429
677,429
Mark IV Commerce Park - Building 1
Crow Holdings Industrial
581,000
581,000
Alliance Northport 1
Hillwood
500,555
500,555
Northwest Commerce Park - Building 1
Stream / Morgan Stanley
473,894
473,894
Speedway Logistics Crossing - Building 3
Scannell
408,240
408,240
Speedway Logistics Crossing - Building 1
Scannell
390,000
390,000
Northwest Commerce Park - Building 3
Stream / Morgan Stanley
351,194
351,194
Northwest Commerce Park - Building 2
Stream / Morgan Stanley
266,152
266,152
Mark IV Commerce Park - Building 3
Crow Holdings Industrial
239,500
239,500
Alliance Northport 5
Hillwood
225,930
225,930
Alliance Northport 4
Hillwood
225,472
225,472
Westport Logistics - Building 1
PLR
205,136
205,136
Mark IV Commerce Park - Building 2
Crow Holdings Industrial
205,000
205,000
Fossil Creek Commerce Center
First Industrial
198,589
198,589
Planned Speculative (100K SF+)
Building
Developer/Owner
RBA
SF Available
Intermodal Logistics Center - Building 2
Northpoint Development
1,007,000
1,007,000
NorthLink A
Hines
754,313
754,313
NorthLink B
Hines
263,200
263,200
FORECAST The construction pipeline for both Alliance and North Fort Worth will remain active throughout the rest of the year with 8.6 MSF of speculative product under construction in the submarkets combined. However, with continued elevated tenant demand, it is anticipated the area’s leasing fundamentals will remain strong. We forecast that an increase in vacancy for Alliance is likely in the short term - a result of the current construction pipeline. Longer term, the area should return to equilibrium as the majority of good developable sites are now under developer control, and a disciplined approach to future development is expected.
TA B L E O F CON T E N T S
Q2 2019
39
Cushman &Wakefield Dallas/Fort Worth
Brookhollow/ Trinity
40 Q2 2019
Industrial Insider Mid-Year Report
Q2 2019
41
FRISCO
Cushman &Wakefield Dallas/Fort Worth
ALLEN
LAND AGE
75
PLANO
Brookhollow/Trinity 121
35E
MURPHY
ADDISON
OBSERVATIONS & TRENDS
RICHARDSON
CARROLLTON
35E
121
75
• Most of the Brookhollow/Trinity’s building stock was built several cycles ago and struggles to meet modern day supply chain and distribution demands • Demand in this submarket is driven by companies with smaller operations and/or local, last mile fulfillment and distribution • The majority of the submarket’s tenant base occupies smaller spaces – current availabilities consist of only 2 spaces over 100,000 SF • This infill submarket is primarily built-out and new supply isn’t likely until vacancy increases and developers can make sense of redeveloping old product FORNEY 30 30 80
635
FARMERS BRANCH
114
635
635
114
12
12
HIGHLAND PARK
35E
183
BROOKHOLLOW/ TRINITY
IRVING
75
DALLAS
30
GRAND PRAIRIE
12
35E
45
12
175
20
BALCH SPRINGS
12
20
20
HUTCHINS
67
35E
175
DUNCANVILLE
MARKET SUMMARY
45
DESOTO
LANCASTER
2011
2012 2013 2014 2015 2016 2017 2018 YTD 2019 WILMER
67
35E
47.9
47.9
47.9
48.3
48.3
48.3
48.3
48.8
49.2
Inventory (MSF)
Overall Net Absorption (MSF)
398,419 137,953 245,991
1.2
572,730 532,986 64,042 20,578 (308,273)
7.3% 7.0% 6.6% 4.7% 3.5% 2.4% 2.2% 2.1% 2.6%
Overall Vacancy
21,400
0
34,400 353,161
0
0
0
0
0
Completions (MSF)
Under Construction (MSF)
0
139,561 185,161
0
0
0
0
0
0
42 Q2 2019
Industrial Insider Mid-Year Report
VACANCY
Historical Average = 4.9% HISTORICAL AVERAGE = 4.9%
8.0%
7.0%
6.0%
5.0%
4.0%
3.0%
2.0%
1.0%
0.0%
2011
2012
2013
2014
2015
2016
2017
2018
YTD 2019
OVERALL VACANCY RATE
HISTORICAL AVERAGE
NET ABSORPTIONS/COMPLETIONS
NET ABSORPTION / COMPLETIONS
1.4
1.2
1.0
0.8
0.6
Millions
0.4
0.2
0.0
2011
2012
2013
2014
2015
2016
2017
2018 YTD 2019
(0.2)
(0.4)
OVERALL NET ABSORPTION COMPLETIONS
TA B L E O F CON T E N T S
Q2 2019
43
Cushman &Wakefield Dallas/Fort Worth
DFW Airport
44 Q2 2019
Industrial Insider Mid-Year Report
Q2 2019
45
Cushman &Wakefield Dallas/Fort Worth
DFW Airport
The DFW Airport industrial submarket has a central location with excellent access to several major transportation arteries, an abundant supply of labor and multiple area amenities. The area consistently enjoys high tenant demand and investor interest for warehouse/distribution space. The submarket’s inventory stock is composed of both fee simple ownership and DFW Airport ground leased developments. Since 2015, demand has kept up with new supply and the DFW Airport 380
submarket has played a leading role in absorption for the overall DFW market. The submarket’s lack of developable infill sites along with strong leasing Airport to open the southern end for ground leased development in 2017. Developers have aggressively taken advantage of this opportunity, breaking ground on over 8 MSF since, 82% of which has been speculative product. 75 velocity on the northern side of the airport motivated DFW
DFW AIRPORT LEADS THE GREATER DFW INDUSTRIAL MARKET IN MID-YEAR ABSORPTION AND DELIVERIES, WITH 3.3 MSF AND 3.4 MSF RESPECTIVELY. DENTON
35
35E
LITTLE ELM
380
CORINTH
35W
FRISCO
ALLEN OBSERVATIONS & TRENDS
HIGHLAND VILLAGE
75
PLANO
MURPHY • DFW Airport’s mid-year net absorption of 3.3 MSF accounts for 30% of greater DFW market’s mid-year net absorption • Of the 4.5 MSF currently under construction in the submarket, 4.3 MSF (95%) is speculative product HIGHLAND PARK • Consistently high tenant demand in the submarket continues to fuel increased construction activity, the submarket absorbing over 13 MSF in the last three and a half years • Southern DFW Airport ground leased product accounts for 73% (3.3 MSF) of the submarket’s current construction activity DALLAS 30 • The submarket’s spike in development activity is a direct result of DFW Airport officials awarding eleven different developers ground leased sites, encompassing +/- 1,000 acres with over 14.5 MSF of potential development – 8.4 MSF of which has already delivered or broken ground 30 635 12 75 80 75 RICHARDSON
35E
121
FLOWER MOUND
E
114
ADDISON
SOUTHLAKE
CARROLLTON
35E
121
GRAPEVINE
635
FARMERS BRANCH
DFW AIRPORT
114
635
TH LAND LS
360
COLLEYVILLE
114
121
12
BEDFORD
EULESS
35E
183
183
IRVING
820
360
30
30
GRAND PRAIRIE
ARLINGTON
12
35E
FORNEY
45
12
175
46 Q2 2019
20
BALCH SPRINGS
12
20
20
20
Industrial Insider Mid-Year Report
YEAR-TO-DATE - DFWAirport
OVERALL NET ABSORPTION UNDER CONSTRUCTION 3.3MSF 8.8% 3.4MSF 4.5MSF OVERALL VACANCY COMPLETIONS
MARKET SUMMARY
2011
2012 2013 2014 2015 2016 2017 2018 YTD 2019
62.9
63.0
65.7
70.4
74.0
76.1
79.3
83.1
86.5
Inventory (MSF)
Overall Net Absorption (MSF)
3.6
2.4
4.5
2.4
3.2
4.6
3.2
2.8
3.3
13.5% 9.9% 6.8% 9.5% 9.7% 6.1% 5.8% 8.4% 8.8%
Overall Vacancy
28,417
85,500
2.7
4.6
3.7
2.1
3.2
3.8
3.4
Completions (MSF)
Under Construction (MSF)
85,500
1.1
4.5
3.6
2.3
3.7
1.6
3.8
4.5
COMPLETIONS / NET ABSORPTIONS
VACANCY
Historical Average = 8.2%
.0%
HISTORICAL AVERAGE = 9.6%
.0%
Historical Average = 9.6%
.0%
16.0%
NETABSORPTION / COMPLETIONS
5.0
14.0%
4.5
.0%
12.0%
4.0
3.5
10.0%
.0%
3.0
8.0%
2.5
Millions
.0%
6.0%
2.0
1.5
4.0%
1.0
.0%
2.0%
0.5
0.0
0.0%
.0%
2011
2012
2013
2014
2015
2016
2017
2018 YTD2019
2011
2012
2013
2014
2015
2016
2017
2018
YTD2019
Q2 2010 Q2 2011
Q2 2012 Q2 2013 Q2 2014 Q2 2015 Q2 2016 Q2 2017 Q2 2018
OVERALL NETABSORPTION COMPLETIONS
OVERALL VACANCY RATE
HISTORICAL AVERAGE
OVERALL VACANCY RATE
HISTORICAL AVERAGE
Q2 2019
47
Cushman &Wakefield Dallas/Fort Worth
DFW Airport
100K SF+ | YTD SELECT LEASING ACTIVITY Tenant Building
Location
SF Leased
McKesson*
DFW Trade Center - Building F
4250 Patriot Dr, Grapevine
490,825
Samsung
Gateway Logistics Center - Building 1
2800 Market St, Irving
309,567
Gulf Relay*
Liberty at Amberpoint
330 S Royal Ln, Coppell
134,924
Delta Apparel
Majestic Airport Center DFW - Building 5
2900 S Valley Pky, Lewisville
113,098
YKK - AP*
Belt Line Trade Center - Building A
346 E Belt Line Rd, Coppell
105,000
*Renewal
NEW DEVELOPMENTS Completed - First Generation Vacancies (100K SF+)
Building
Developer/Owner
RBA SF Available
DFW Commerce Center - Building 1
Copeland Commercial
1,000,584 1,000,584
Gateway Logistics Center - Building 3
Bandera Ventures / Long Warf
374,900
374,900
Gateway Logistics Center - Building 5
Bandera Ventures / Long Warf
267,254
267,254
Valley View DFW Airport
KKR
294,795
221,895
Gateway Logistics Center - Building 2
Bandera Ventures / Long Warf
211,316
211,316
Gateway Logistics Center - Building 4
Bandera Ventures / Long Warf
250,312
187,812
Lakeside Ranch 1001
Duke
634,564
185,344
Prologis Freeport West - Building 2
Prologis
111,012
111,012
48 Q2 2019
Industrial Insider Mid-Year Report
Under Construction - Availabilities (100K SF+)
Building
Developer/Owner
RBA SF Available
TCC Passport Park - Building 1
Trammell Crow Company / CBREI
1,106,315
1,106,315
TCC Passport Park - Building 2
Trammell Crow Company / CBREI
709,703
709,703
Dalfen Passport Park - Building 200
Dalfen Industrial
494,385
494,385
Dalfen Passport Park - Building 300
Dalfen Industrial
494,385
494,385
Majestic Airport Center - Building 7
Majestic Realty
306,280 306,280
Lakeside Ranch 350
Duke Realty
274,994
274,994
Dalfen Passport Park - Building 100
Dalfen Industrial
242,799
242,799
DFW North IV
Huntington
198,854
198,854
Prologis Park 121 - Building 2
Prologis
142,080
142,080
TCC Passport Park - Building 3
Trammell Crow Company / CBREI
104,000
104,000
TCC Passport Park - Building 4
Trammell Crow Company / CBREI
99,000
99,000
Prologis Park 121 - Building 1
Prologis
98,381
98,381
Planned Speculative (100K SF+)
Building
Developer/Owner
RBA
SF Available
DFW Park 161 - Building 9
Perot Development Co
645,840
645,840
Airfield Interchange - Building 1
Logistics Property Co
477,360
477,360
Mustang Business Park - Building 2
Prologis
429,720
429,720
Mustang Business Park - Building 1
Prologis
401,280
401,280
Airfield Interchange - Building 2
Logistics Property Co
320,000
320,000
DFW Park 161 - Building 11
Perot Development Co
247,000
247,000
DFW Airfield Logistics Center - Building 2
Seefried / Clarion
210,640
210,640
DFW Park 161 - Building 10
Perot Development Co
156,000
156,000
DFW Airfield Logistics Center - Building 1
Seefried / Clarion
145,878
145,878
Mustang Business Park - Building 3
Holt Lunsford Commercial
145,058
145,058
FORECAST An uptick in vacancy is likely as no slow-down on the development front is in sight for the remainder of 2019; with 4.5 MSF under construction in the submarket and over 2 MSF slated to break ground this year. Looking ahead, tenants will continue to be attracted to the area and we anticipate elevated absorption numbers to catch up with the influx of new supply.
TA B L E O F CON T E N T S
Q2 2019
49
Cushman &Wakefield Dallas/Fort Worth
East FortWorth
50 Q2 2019
Industrial Insider Mid-Year Report
Q2 2019
51
ALLEN
HIGHLAND VILLAGE
Cushman &Wakefield Dallas/Fort Worth
75
PLANO
35E
121
FLOWER MOUND
4
East Fort Worth ROANOKE SOUTHLAKE 114
MURPHY
ADDISON
RICHARDSON
CARROLLTON
35W
35E
121
75
GRAPEVINE
287
635
OBSERVATIONS & TRENDS FARMERS BRANCH
114
KELLER
635
NORTH RICHLAND HILLS
360
COLLEYVILLE
635
• Comprised primarily of smaller, multi-tenant product developed in previous cycles • Since 2010, East Fort Worth has delivered less than 600,000 SF of new industrial product • Limited new development opportunities due to lack of available land and shallow demand • PAK Quality Foods’ 63,375 SF cold storage facility located at 12360 S Pipeline Rd is expected to deliver during the third quarter of this year • STAG Industrial’s 101,896 SF warehouse at 1801 Riverbend West Drive was purchased by Harris Packaging. The space was previously occupied by Ecolab HUTCHINS BALCH SPRINGS DUNCANVILLE HIGHLAND PARK DALLAS 20 20 45 45 30 35E 35E 35E 30 12 12 12 12 114 183 12 75 67 80 175 175
121
BEDFORD
GINAW
EULESS
183
HALTOM CITY
IRVING
820
820
EAST FORT WORTH
35W
121
360
30
GRAND PRAIRIE
ARLINGTON
FORT WORTH
287
20
820
20
20
FOREST HILL
287
360
35W
DESOTO
LANCASTER
WILMER
MANSFIELD
67
35E
MARKET SUMMARY
2011
2012 2013 2014 2015 2016 2017 2018 YTD 2019
22.9
22.9
22.9
23.0
23.1
23.4
23.5
23.5
23.5
Inventory (MSF)
Overall Net Absorption (MSF)
(54,492) 35,902
97,359 121,025 (127,368) 216,947 23,604
67,826
10,060
5.7% 5.7% 5.3% 4.9% 5.8% 6.1% 6.4% 6.0% 6.1%
Overall Vacancy
21,208 25,000
0
50,000 79,800 301,500 100,000
0
22,050
Completions (MSF)
Under Construction (MSF)
0
0
50,000
0
0
0
0
64,800 100,167
52 Q2 2019
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