Market Brief...
Dallas/Fort Worth
INDUSTRIAL
3Q2020 Property Pictured Above: FED Carter Distribution Center | 1501, 1701, 1851 & 1901 Joel East Road • Fort Worth, Texas 76140
TABLE OF CONTENTS 1. DALLAS/FORT WORTH INDUSTRIAL SUBMARKETS & EXPERTS
1 2 3
2. OVERALL DALLAS/FORT WORTH INDUSTRIAL MARKET A. Industrial Trends & Transactions
B. Facts and Figures
2. SUBMARKET INTELLIGENCE A. Great Southwest/Arlington
B. C. D. E. F. G. H. I.
DFW Airport Northeast/East Dallas Far Northeast Dallas Northwest Dallas South Dallas South Stemmons North Fort Worth South Fort Worth
3
5 5
HLC SUBMARKET COVERAGE
DFW
HLC DFW INDUSTRIAL MARKET EXPERTS
JIM BRICE
MATT CARTHEY
CANON SHOULTS
JOHN GORMAN
JOSH BARNES
ANDREW GILBERT
BEN WALLACE
GEORGE JENNINGS
Partner - Texas Leasing jbrice@holtlunsford.com 972.280.8306
Partner - Managing Principal mcarthey@holtlunsford.com 817.710.1111
Managing Principal cshoults@holtlunsford.com 972.280.8328
Senior Vice President jgorman@holtlunsford.com 214.920.9800
Senior Vice President jbarnes@holtlunsford.com 972.280.8353
Market Director agilbert@holtlunsford.com 972.280.8312
Market Director bwallace@holtlunsford.com 972.421.1966
Market Director gjennings@holtlunsford.com 817.632.6151
THOMAS GRAFTON
KEATON DUHON
MADDY CANTY
HOGAN HARRISON
HARRISON PUTT
KEATON BRICE
BO PUCKETT
BLAKE TROIANI
Market Associate tgrafton@holtlunsford.com 817.632.6152
Market Associate kduhon@holtlunsford.com 817.284.5555
Market Associate mcanty@holtlunsford.com 972.280.8325
Market Associate hharrison@holtlunsford.com 817.710.7058
Market Associate hputt@holtlunsford.com 972.265.0124
Market Associate kbrice@holtlunsford.com 972.421.1956
Market Analyst bpuckett@holtlunsford.com 972.265.0123
Market Analyst btroiani@holtlunsford.com 972.265.0126
7
HLC DFW
HLC OUTLOOK Absorption
vs. Prev. Qtr
3,325,490
5,252,681
4,083,545
Vacancy
vs. Prev. Qtr
vs. 12 Mths Ago
7.0%
6.8%
6.3%
Leasing Act.
vs. Prev. Qtr
vs. 12 Mths Ago
14,330,640
13,894,435
16,383,309
U/C SF
vs. Prev. Qtr
vs. 12 Mths Ago
26,953,818
26,979,679
35,925,683
Delivered SF
vs. Prev. Qtr
vs. 12 Mths Ago
4,854,690
9,343,951
2,470,702
While the long-term effects of COVID-19 remain to be seen, the Dallas-Fort Worth industrial market continues to show resilience with a strong rebound. Following a recordsetting start in 2Q 2020, the market finished 3Q 2020 on track. CoStar reported net positive absorption of more than 16.5M SF which is on pace as compared to annualized 2019 absorption. Overall, Dallas-Fort Worth industrial construction ended the quarter with 21.8M SF of new product delivered and 26.9M SF currently under construction. Significant leasing activity in North Fort Worth and South Dallas have led the charge to allow the overall market vacancy to remain stable at a healthy +/- 7.0%. COVID-19 will continue to cause short-term uncertainty as landlords and tenants navigate the changing business climate. The effects of PPP funding will be closely monitored. However, overall tenant demand and deal flow has picked up since 1Q 2020 across all sectors, including those with primarily small businesses. As we approach the presidential election and enter 4Q 2020, the overall industrial market will continue to weather the storm better than other asset classes. Many of the large 3PL and e-commerce tenants are hiring as opposed to laying off employees. Additionally, we expect DFW to outperform other parts of the U.S. as it continues to be the biggest benefactor of large-scale relocation efforts and population growth. The DFW Industrial Capital Market is on track to produce record setting pricing during 4Q 2020 and exemplifies the strength of the DFW Industrial market.
8
INDUSTRIAL TRENDS & TRANSACTIONS
vs. 12 Mths Ago
TRENDS DUE TO COVID-19
While rent relief requests are present, they are not prevalent. In some cases, landlords are offering increased concessions to secure deals. We have seen an increase in tenant requests for short term deals and some landlords are increasingly willing. Developers are still scouting new land positions and the development pipeline is strengthening.
TRENDS Need For Speed • More spec offices Desire For Flexibility • Requested expansion options and/or phased in occupancy Drive To Increase Efficiency • Increased parking requirements • Increased demand for high-quality second generation options vs rising rates for new construction Increased Attention On Workforce • Where are they coming from? • Better work environment (Ex. HVAC Warehouse) Foreign Companies Look To Avoid Tariffs TI Requests And Costs Continue To Increase Pre-Leasing activity remains strong
TOP LEASE TRANSACTIONS
• Home Depot a has signed a 2,310,219 SF lease in 9314 W Jefferson Boulevard with NorthPoint Development. • Amazon has signed a 1,023,488 SF lease in 15511 NE Loop 820 with Hunt Southwest. • Mattel has signed a 1,007,500 SF lease in 501 Meacham Boulevard with Majestic Realty. • Amazon has signed a 857,397 SF lease in 1301 Chalk Hill with Granite REIT. • Haggar has signed a 508,692 SF lease in 5401 N Riverside Drive with Mapletree Investments. • Best Choice Distribution has signed a 442,035 SF lease in 5151 Samuell Boulevard with Prologis. • Navistar, Inc has signed a 360K SF lease in 4038 Rock Quarry Road with Gateway. • AMCOR has signed a 269,388 SF lease in 4200 Fleetwood Road with ML Realty Partners. • Teltech has signed a 198,854 SF lease in 1901 Lakeside Parkway with Blackcreek Group. • Ta Chen International has signed a 160K SF lease in 957 Heinz Way with Link Industrial. • FedEx has signed a 156K SF lease in 15815 Executive Drive with Bandera Ventures. • Undisclosed Manufacturer has signed a 136,216 SF lease in 2910 Telecom Parkway with Jackson Shaw. • BFS Services has signed a 126,100 SF lease in 500 Enterprise Drive with Clarion Partners.
HLC Deal
HLC Deal
HLC Deal
HLC DFW FACTS & FIGURES
Market
Existing Inventory
# Bldgs.
Total RBA
Vacancy
Direct SF
Total SF
Vac. %
641
82,468,942
5,452,122
5,982,831
7.3%
East Dallas
610
48,119,538
2,920,920
3,016,446
6.3%
Great SW/Arlington
1,119
116,309,229
5,655,738
6,143,934
5.3%
Henderson County
18
1,219,296
29,968
29,968
2.5%
North Fort Worth
729
108,469,180
10,347,938
10,938,238
10.1%
Northeast Dallas
1,528
113,619,286
6,897,581
7,695,343
6.8%
Northwest Dallas
1,372
111,941,275
5,738,807
6,190,214
5.5%
25
2,205,084
36,291
36,291
1.6%
South Dallas
14,000,000
7.0%
12,000,000
6.0%
10,000,000
5.0%
8,000,000
4.0% 6,000,000
3.0%
DFW Airport
NW Dallas Outlying
OVERALL DFW
8.0%
700
104,927,801
8,653,422
9,875,925
9.4%
South Fort Worth
1,442
82,708,181
4,864,008
4,931,976
6.0%
South Stemmons
2,077
115,488,469
6,966,833
7,142,400
6.2%
Totals
10,261
887,476,281
57,563,628
61,983,566
7.0%
4,000,000
2.0%
2,000,000
1.0% 0.0%
0 3Q 17
4Q 17
1Q 18
2Q 18
3Q 18
4Q 18
1Q 19
Absorption
2Q 19
3Q 19
4Q 19
1Q 20
2Q 20
Deliveries
3Q 20
Vacancy
VACANCY - OVERALL DFW 10.0% 9.0% 7.0%
6.8%
8.0% 7.0%
6.5%
6.5%
6.0% 5.0% 4.0% 3.0% 2.0%
0.5%
0.3%
1.0% 0.0%
3Q 17
4Q 17
1Q 18
2Q 18
3Q 18
4Q 18
1Q 19
Direct
2Q 19
3Q 19
4Q 19
1Q 20
2Q 20
Sublet
3Q 20
Total
ABSORPTION - OVERALL DFW 22,500,000 20,000,000 17,5 00,000
YTD Net Absorption
YTD Deliveries
Under Construction SF
YTD Leasing Activity
DFW Airport
2,171,864
2,550,377
4,545,730
8,859,477
East Dallas
1,709,273
1,200,000
944,106
1,617,561
Market
15,000,000 12,500,000 10,000,000 7,500,000 5,000,000 2,500,000 0
Great SW/Arlington
2,399,178
2,469,782
870,769
4,661,288
Henderson County
(581)
0
0
0
North Fort Worth
3,304,185
6,510,286
8,816,728
5,139,184
Northeast Dallas
1,953,476
1,521,216
4,160,061
3,664,106
3Q 17
4Q 17
1Q 18
2Q 18
3Q 18
4Q 18
1Q 19
2Q 19
3Q 19
Total Net
4Q 19
1Q 20
2Q 20
3Q 20
Leasing Activity
CONSTRUCTION - OVERALL DFW 40,000,000 35,000,000
Northwest Dallas
262,691
898,364
2,063,108
5,495,327
NW Dallas Outlying
32,430
0
86,000
78,139
25,000,000
2,392,565
2,269,588
2,250,441
6,446,381
15,000,000
South Fort Worth
268,669
1,081,644
1,991,573
3,200,957
South Stemmons
2,038,200
3,327,620
1,225,302
3,779,332
Totals
16,531,950
21,828,877
26,953,818
42,941,752
South Dallas
30,000,000
20,000,000
10,000,000 5,000,000 0 3Q 17
4Q 17
1Q 18
2Q 18
3Q 18
4Q 18
Delivered Inventory
1Q 19
2Q 19
3Q 19
4Q 19
1Q 20
2Q 20
3Q 20
Under Construction
9 Source: CoStar 3Q 2020 Industrial Report
SUBMARKET INTELLIGENCE GREAT SOUTHWEST/ARLINGTON
HLC OUTLOOK
CANON SHOULTS
MADDY CANTY
Managing Principal cshoults@holtlunsford.com 972.280.8328
Absorption
While the long-term effects of COVID-19 remain to be seen, the Great Southwest (GSW) industrial submarket finished 3Q 2020 in a very stable position. At 3Q 2020 end, GSW reported overall positive absorption of 2.4M SF with 4.7M SF of leasing activity. GSW reported 3Q 2020 new construction completions of 2.5M SF (83% pre-leased). New construction has slowed significantly with only Crow Holdings Industrial’s 576,123 SF building and Gaff Interests’ 244,920 SF building still under construction. The 3Q 2020 GSW vacancy rate tightened to 5.3% versus 6.2% at 2Q 2020. This represents the lowest vacancy rate of the nine major submarkets. As we enter 4Q 2020, we still expect short-term uncertainty as the country navigates the business climate due to COVID-19. However, the DFW Industrial market continues to show resilience despite the overall unknown impacts of COVID-19 and the presidential election.
Market Associate mcanty@holtlunsford.com 972.280.8325
vs. Prev. Qtr
TOP LEASE TRANSACTIONS
vs. 12 Mths Ago
852,750
(398,005)
(820,264)
Vacancy
vs. Prev. Qtr
vs. 12 Mths Ago
5.3%
6.0%
5.8%
Leasing Act.
vs. Prev. Qtr
vs. 12 Mths Ago
1,954,925
2,053,647
U/C SF
vs. Prev. Qtr
vs. 12 Mths Ago
870,769
602,849
3,584,277
Delivered SF
vs. Prev. Qtr
vs. 12 Mths Ago
401,557
8.0%
2,100,000
7.0% 6.0% 5.0%
1,100,000
4.0% 3.0% 100,000
2.0% 1.0% 0.0%
(900,000) 4Q 17
1Q 18
Absorption
2Q 18
3Q 18
4Q 18
1Q 19
2Q 19
Deliveries
3Q 19
4Q 19
1Q 20
2Q 20
3Q 20
Vacancy
Source: CoStar 3Q 2020 Industrial Report
10
• Remington I-30 – a 244,920 SF spec development with Gaff Interests
• Ta Chen International has signed a 160K SF lease in 957 Heinz Way with Link Industrial. • Home Elegance has signed a 63,400 SF renewal in 1351 Post & Paddock Street with Mapletree Investments. • Amazon has signed a 186,344 SF lease in 2400 Centennial with Alpha Industrial.
DEALS IN THE MARKET 3,100,000
9.0%
3Q 17
• Tellworks has signed a 127,708 SF expansion in 2275 E I-20 with Heitman.
410,193
VITAL STATS
10.0%
• 1113 W Oakdale Road – a 576,123 SF spec development with Crow Holdings Industrial
HLC Deal
1,116,424
-
NEW DEVELOPMENTS
• AMCOR has signed a 269,388 SF renewal in 4200 Fleetwood Road with ML Realty Partners.
• 3301 E Park Row – LaSalle is selling 155,425 SF building and is currently under contract with Clarion
LARGE EXISTING VACANCIES • 1113 W Oaklade Road – 576K SF • Cooper I-20 Building C | 1131 W Bardin Road – 401K SF • Oakdale Logistics Center | 949 W Oakdale Road – 401K SF • Trinity Overlook Business Center | 3254 W Trinity Boulevard – 305K SF • Parkway Logistics Center | 2911 S Great Southwest Parkway – 271K SF
SUBMARKET INTELLIGENCE DFW AIRPORT
HLC OUTLOOK The Dallas-Fort Worth (DFW) Airport industrial submarket vacancy rate was 7.3% at the end of 3Q 2020 with YTD absorption totaling 2,171,864 SF. The DFW Airport submarket set historic statistics in 3Q 2020 with nearly 9M SF of gross leasing activity. The majority of such activity were tenants signing leases at new construction buildings. Uline, Brightstar, Teltech, and HelloFresh are a few of the tenants who relocated to new construction.
ANDREW GILBERT
KEATON BRICE
Market Director agilbert@holtlunsford.com 972.280.8312
Absorption
Rental rates remained strong, ranging from $4.50 to $8.50 for bulk distribution and shallow bay product. Rental abatements range from two to four months depending on renewal, versus new deals and the size of the lease transaction. Tenant improvement costs remained high because of increasing tenant demands and construction costs. DFW International Airport is ranked as one of the largest cargo airports in the country. It boasts a high proportion of newer buildings since 2000 and, as a result, the submarket has a high concentration of efficient product with clear heights and dock configurations suitable for modern distribution. The submarket consists of large big-box users including Amazon, Uline, PPG, Bed Bath & Beyond, Fresenius Medical and many others.
Market Associate kbrice@holtlunsford.com 972.421.1956
vs. Prev. Qtr
vs. 12 Mths Ago
1,619,068
341,823
603,040
Vacancy
vs. Prev. Qtr
vs. 12 Mths Ago
7.3%
7.9%
7.1%
Leasing Act.
vs. Prev. Qtr
vs. 12 Mths Ago
3,784,225
2,129,884
2,074,274
U/C SF
vs. Prev. Qtr
vs. 12 Mths Ago
4,545,730
5,568,817
4,412,512
Delivered SF
vs. Prev. Qtr
vs. 12 Mths Ago
1,613,143
1,122,251
-
VITAL STATS
9.0%
2,400,000
8.0% 1,900,000 7.0% 1,400,000
6.0% 5.0%
TOP LEASE TRANSACTIONS • Uline has signed a 1.1M SF lease in 2600 Passport Park with Trammell Crow Company. • Uline has signed a 494K SF lease in 2601 W Rochelle Road with Dalfen. • HelloFresh has signed a 374,812 SF lease in Gateway Logistics Center with Bandera. • Teltech Communications has signed a 198,854 SF lease in 1901 Lakeside Parkway with Black Creek. • Brightstar has signed a 274K SF lease in 350 Lakeside Parkway with Duke Realty. • SEKO Logistics has signed a 98,300 SF lease in DFW Airport Logistics Center with Clarion. • PFSWeb has signed a 57,400 SF lease in 9250 N Royal Lane with Prologis.
• Edmonds Trade Center – a 62,820 SF development with TA Realty, set to break ground in 4Q 2020 • Majestic DFW Airport Center – Majestic has broken ground on their next phase at Majestic DFW Airport Trade Center – a 284K SF two (2) building project
HLC Deal
LARGE EXISTING VACANCIES • • • • • • •
1111 N 28th Avenue – 248,925 SF 2450 Esters Boulevard – 213,392 SF 240 Dividend Drive – 210,550 SF 1011 N 28th Avenue – 162,500 SF 801 Industrial Boulevard – 144,423 SF 180 N Freeport Parkway – 142,080 SF 500 Airline Drive – 127,268 SF
900,000
4.0%
400,000
3.0% (100,000) 2.0% (600,000)
1.0% 0.0%
(1,100,000) 3Q 17
4Q 17
1Q 18
Absorption
2Q 18
3Q 18
4Q 18
1Q 19
2Q 19
Deliveries
3Q 19
4Q 19
1Q 20
2Q 20
3Q 20
Vacancy
Source: CoStar 3Q 2020 Industrial Report
NEW DEVELOPMENTS • DFW Park 161 – a 2.5M SF four (4) building project with Perot Development Company and Invesco • Passport Park – a 2M SF four (4) building project with Trammell Crow, set for completion in 3Q 2020 • Mustang Park – a 1M SF three (3) building project with Prologis, set for completion in 4Q 2020 • 2900 Genesis Way – a 404K SF build-to-suit development for the Trade Group with 85K SF available for lease 11
SUBMARKET INTELLIGENCE NORTHEAST/EAST DALLAS
HLC OUTLOOK The Northeast/East Dallas submarket has continued to perform well through the challenges of 2020. Northeast Dallas has continued to see a steady pace of activity with some of the more stale listings getting leased and smaller incubator spaces have continued to see significant demand. All eyes should be on the significant amount of inventory coming online in East Dallas. It will be important to watch the pre-leasing activity, which has started to occur as noted below, throughout these numerous projects as the draw for quality labor continues to be its primary calling card. With the increased competition in this area and more developments on the way we have a close eye on concessions as developers race to capture the highest quality tenants. JOSH BARNES
BEN WALLACE
Senior Vice President jbarnes@holtlunsford.com 972.280.8353
Market Director bwallace@holtlunsford.com 972.421.1966
TOP LEASE TRANSACTIONS • Best Choice Distribution leased 442,035 SF at 5151 Samuell Boulevard with Prologis.
Absorption
vs. Prev. Qtr
vs. 12 Mths Ago
200,933
724,107
(429,734)
Vacancy
vs. Prev. Qtr
vs. 12 Mths Ago
6.6%
6.3%
6.6%
Leasing Act.
vs. Prev. Qtr
vs. 12 Mths Ago
30 with Urban Logistics Realty.
414,428
1,972,867
vs. Prev. Qtr
vs. 12 Mths Ago
2,207,750
1,324,893
vs. Prev. Qtr
vs. 12 Mths Ago
1,500,000 8.0%
1,350,000 1,200,000
7.0%
1,050,000
6.0%
900,000 750,000
5.0%
600,000
4.0%
450,000 300,000
3.0%
150,000
2.0%
0 (150,000)
1.0%
(300,000)
0.0%
(450,000) 4Q 17
1Q 18
Absorption
2Q 18
3Q 18
4Q 18
1Q 19
2Q 19
Deliveries
3Q 19
4Q 19
1Q 20
2Q 20
3Q 20
Vacancy
Source: CoStar 3Q 2020 Industrial Report
12
• Texas Wholesale Computers leased 81,263 SF at
HLC Deal
2755 MIller Park with TA Realty.
391,822
VITAL STATS
3Q 17
• ADMC leased 98,984 SF at 3150 Marquis with Link Logistics.
1,720,719 Delivered SF
9.0%
• Pregis leased 117,075 SF at 2901 W Kingsley Rd with Stag Industrial.
1,397,694
-
• Parker Hannifan leased 144,750 SF at 510 N Peachtree with Clarion.
U/C SF
487,031
• 1000bulbs.com leased 203,040 Sf at Urban District
DEALS IN THE MARKET • 2600 McCree Road - Westmount Realty Capital is selling a 1,000,000 SF building that is currently occupied by Kraft Heinz
NEW DEVELOPMENTS • Urban District 30 – a 980,700 SF five (5) building spec project with Urban Logistics Realty
• East Dallas Logistics Center – a 545,547 SF two (2) building spec project with Dalfen
• 5351 Samuell Boulevard – a 198,109 SF two (2) building spec project with Conor Commercial
• East Dallas Commerce Center - a 373,322 SF spec building with IDI Logistics
LARGE EXISTING VACANCIES • 4624 Clover Haven Street – 584,089 SF • 3737 W Miller Road - 472,000 SF • 3000 W Kingsley Rd - 341,840 SF • 2850 Marquis Drive - 183,664 SF • 3800 Leon Road – 183,124 SF
SUBMARKET INTELLIGENCE FAR NORTHEAST DALLAS
HLC OUTLOOK Far Northeast Dallas has continued to perform extremely well in the midst of COVID-19. Recently delivered speculative developments are leasing at a healthy rate, thus encouraging additional developments to be planned and sought after. Outer markets such as Frisco and McKinney have gained momentum due to companies wanting to be close to new residential developments. Two AMZL build-to-suit developments in addition to FedEx (in Frisco) were notable deals landed and additional activity has continued across these markets. The hypothesis of pent up demand has been substantiated and we expect this activity to continue and new developments to be announced. JOSH BARNES
BEN WALLACE
Senior Vice President jbarnes@holtlunsford.com 972.280.8353
Market Director bwallace@holtlunsford.com 972.421.1966
TOP LEASE TRANSACTIONS • FedEx has signed a 156K SF lease in 15815 Executive Drive with Bandera Ventures. • Undisclosed tenant has signed a 136,216 SF lease in 2910 Telecom Parkway with Jackson Shaw/GID. • GEA has signed a 76,678 SF lease in 16005 Gateway Drive with Blue Star Land. • TT Electronics has signed a 67,790 SF lease in 2900 E Plano Parkway with Provident Realty Partners. • Sentient Energy has signed a 30,355 SF lease in 15815 Executive Drive with Bandera Ventures. • Blount Foods has signed a 28,212 SF lease in 320 Wilmeth Road with ML Realty. • McDowell and Company has signed a 20,073 SF renewal in 1201-1299 Commerce Drive with ATCAP Partners.
HLC Deal
Absorption
vs. Prev. Qtr
vs. 12 Mths Ago
481,661
174,252
(127,321)
Vacancy
vs. Prev. Qtr
vs. 12 Mths Ago
7.0%
7.1%
6.7%
Leasing Act.
vs. Prev. Qtr
vs. 12 Mths Ago
993,998
686,666
1,086,137
U/C SF
vs. Prev. Qtr
vs. 12 Mths Ago
3,049,552
2,301,838
1,143,962
Delivered SF
vs. Prev. Qtr
vs. 12 Mths Ago
444,368
351,498
145,774
DEALS IN THE MARKET
VITAL STATS
8.0%
HLC Deal
950,000
7.0%
800,000
6.0%
650,000
5.0%
500,000 350,000
4.0%
200,000 3.0% 50,000 2.0%
(100,000)
1.0%
• Shutterfly BTS – Core5 is selling a 237K SF build-to-suit building • The Rock | 15815 Executive Drive – Bander Ventures is selling a 212,155 SF building • 600 & 640 Shiloh Road - Trident Capital is selling a two building project totaling 312,003 SF
NEW DEVELOPMENTS • Encore Wire McKinney – a 720K SF building • CORE5 Logistics at McKinney | Phase 1 – a 431,234 SF two (2) building spec project with Core5 Industrial Partners • McKinney Trade Center – a 367,455 SF three (3) building spec project with ML Realty Partners • AMZL (McKinney) Build To Suit – a 248K SF build-to-suit development with Stonemont Financial Group • McKinney Airport Center – a 231,192 SF two (2) building spec project with Stonemont Financial Group • AMZL (Frisco) Build to Suit – a 199,281 SF build-to-suit development with Blue Star Land • Richardson Logistics Center – a 174,720 SF two (2) building spec project with TA Realty • McKinney Logistics Center – a 193,090 spec development with TA Realty • Prestige Circle – a 27,956 SF spec development with Gillett Commercial
LARGE EXISTING VACANCIES • • • •
3605 E Plano Parkway – 200,640 SF 9015 Enterprise Boulevard – 195,743 SF 105 W Bethany Drive – 120K SF 660 N Dorothy Drive – 105K SF
(250,000)
0.0%
(400,000) 3Q 17
4Q 17
1Q 18
Absorption
2Q 18
3Q 18
4Q 18
1Q 19
2Q 19
Deliveries
3Q 19
4Q 19
1Q 20
2Q 20
3Q 20
Vacancy
Source: CoStar 3Q 2020 Industrial Report
13
SUBMARKET INTELLIGENCE NORTHWEST DALLAS
HLC OUTLOOK
ANDREW GILBERT
KEATON BRICE
Market Director agilbert@holtlunsford.com 972.280.8312
Absorption
Through 3Q 2020, the Northwest Dallas industrial submarket continues to be one of the strongest submarkets in the Dallas-Fort Worth metroplex. The submarket posted a 5.5% vacancy rate at the end of 3Q 2020 compared to the vacancy 5.3% rate at the end of 2Q 2020. In the last 2 years, NW Dallas has provided a vacancy rate sub 5% but large tenants like PPG, Ericsson, Furniture of America, and others have recently left the submarket for new construction near the Airport. We do not see this trend continuing as the majority of the submarket is directly off Interstate 35 and is now completely built out. Therefore, we should expect the sub 5% vacancy rates to return in 2021. The last two land sites are tied up by TA and Longpoint which are set to break ground in 4Q 2020.
Market Associate kbrice@holtlunsford.com 972.421.1956
vs. Prev. Qtr
vs. 12 Mths Ago
(14,733)
258,900
551,879
Vacancy
vs. Prev. Qtr
vs. 12 Mths Ago
5.5%
5.0%
4.5%
Leasing Act.
vs. Prev. Qtr
vs. 12 Mths Ago
1,988,682
1,664,857
2,462,220
U/C SF
vs. Prev. Qtr
vs. 12 Mths Ago
2,063,108
2,505,401
1,529,593
Delivered SF
vs. Prev. Qtr
vs. 12 Mths Ago
566,743
23,683
677,240
1,250,000
5.0%
1,000,000
4.0%
750,000
3.0%
500,000
2.0%
250,000
1.0%
0
0.0%
(250,000) 3Q 17
4Q 17
1Q 18
Absorption
2Q 18
3Q 18
4Q 18
1Q 19
2Q 19
Deliveries
3Q 19
4Q 19
1Q 20
2Q 20
3Q 20
Vacancy
Source: CoStar 3Q 2020 Industrial Report
14
Exeter Westpark 1 with Exeter Property Group.
• Packaging Corporation of America has signed a 168,725 SF renewal in 1015 Hayden Drive.
• Earl Owen has signed a 100,100 SF lease in 1135 W Trinity Mills Road with Link Industrial.
• Homestar has signed a 40,172 SF lease in 2701 E State Highway 121 with EastGroup.
NEW DEVELOPMENTS • Denton Crossing @ I-35 – a 1.2M SF four (4)
VITAL STATS
6.0%
TOP TRANSACTIONS • Ingram Micro has signed a 648,726 SF lease in
building project with Scannell, set for delivery in 4Q 2020 • Exeter Westpark 1 – a 648,725 SF development with Exeter, set for delivery in 4Q 2020 • First Park 121 – a 433,720 SF development with First Industrial • Valwood Trade Center – a 138,975 SF two (2) building development, set for delivery in 2Q 2021 • Golden Bear Distribution Center – a 125,000 SF shallow bay development, set for delivery in 2Q 2021
HLC Deal
HLC Deal
LARGE EXISTING VACANCIES • 1910 N Josey Lane – 259,900 SF • 2150 Midway Road – 219,808 SF • 1701 Valley View Lane – 159,405 SF • 3401 Garden Brook Drive – 133,200 SF • 2040 McKenzie Drive – 129,611 SF
SUBMARKET INTELLIGENCE SOUTH DALLAS
HLC OUTLOOK The South Dallas industrial submarket, as surveyed, was 132M SF and 8.1% vacant in 3Q 2020 which is 0.6% higher than reported in 2Q 2020. In accordance with the area surveyed, CoStar is reporting 14,659 SF of net absorption for South Dallas in 3Q 2020. South Dallas has 2.1M SF under construction in the I-30, I-20, and I-45 corridors combined.
JOHN GORMAN
Of that construction, 21% or 450K SF of the new construction is for build-to-suit or design build assignments. The remaining 79% or 1.6M SF under construction is speculative development. The southern corridors along I-20, I-30, and I-45 continue to produce new opportunities for development. Fortunately, the previous halt of construction by capital sources along I-20 and I-45 assisted the South Dallas submarket over the past year to finally join the remaining Dallas submarkets with single digit vacancy of 8.1%.
CANON SHOULTS
Senior Vice President jgorman@holtlunsford.com 214.920.9800
Managing Principal cshoults@holtlunsford.com 972.280.8328
Absorption
vs. Prev. Qtr
vs. 12 Mths Ago
71,298
(251,345)
2,547,717
Vacancy
vs. Prev. Qtr
vs. 12 Mths Ago
9.4%
9.0%
10.7%
Leasing Act.
vs. Prev. Qtr
vs. 12 Mths Ago
2,128,536
2,337,051
1,288,757
U/C SF
vs. Prev. Qtr
vs. 12 Mths Ago
2,250,441
1,624,237
3,606,138
Delivered SF
vs. Prev. Qtr
vs. 12 Mths Ago
573,500
0
320,000
Please note: The area CoStar uses for the South Dallas Submarket differs slightly from the Submarket John covers. Numbers may vary.
TOP LEASE TRANSACTIONS • Amazon has signed a 1,044,647 SF lease in 9155 Southlink Drive with Hines.
• KeHe Foods has signed a 996,035 SF lease in 9900 Bonnie View Road with Core 5.
• FedEx has signed a 362,500 SF renewal in 3901 Adler Road with Brookfield.
• Navistar has signed a 360K SF renewal in 4038 Rock Quarry with DWS.
• Agiliti Health has signed a 282,825 SF lease in
VITAL STATS
9303 Stoneview Drive with Exeter Property Group. • Geodis has signed a 181,400 SF renewal in 4001 Adler Road with Brookfield. • Tekni-Plex has signed a 106,700 SF lease in 9175 Autobahn Drive with Holt Lunsford Commercial Investments. • Structured Cable Products has signed a 53,496 SF lease in 3665 La Reunion Parkway with Taurus Investments.
HLC Deal
14.0%
3,600,000
12.0%
3,100,000
10.0%
2,600,000 2,100,000
8.0%
1,600,000 6.0% 1,100,000 4.0%
600,000
2.0%
100,000
0.0%
(400,000) 3Q 17
4Q 17
1Q 18
Absorption
2Q 18
3Q 18
4Q 18
1Q 19
2Q 19
Deliveries
3Q 19
4Q 19
1Q 20
2Q 20
3Q 20
Vacancy Source: CoStar 3Q 2020 Industrial Report
DEALS IN THE MARKET • Urban Logistics Portfolio – Stonelake sold its
1,272,837 SF multi-building portfolio to Westcore
• Home Depot BTS | 9314 W Jefferson Boulevard –
• Carter Distribution Center | 6633 Oak Grove Road – Crow Holdings is selling a 1M SF building
• Koch-Glitsch 30.64-acre development site at 4900 Singleton Blvd.
• Hines (seller) Essential Logistics Portfolio including
the Amazon (Dallas) & Home Depot (Houston) blds totaling 1.8 M SF. • Park 20 | 2301 N Houston School Rd - SV Capital is selling a 468,300 SF building.
NEW DEVELOPMENTS • 1300 E Fulghum Road – a 1,039,360 SF spec development with SouthPoint Logis
• 9190 Van Horn Drive – a 110,960 SF development with Trammell Crow Company
• I-30 MacArthur Boulevard – a 392,220 SF spec development with Trammell Crow Company
LARGE EXISTING VACANCIES • 3535 N Houston School Road – 900,043 SF • SouthPointe 20/35 | Building 2 – 660,312 SF • 4775 Tinsley Road – 608,939 SF • 2200 Danieldale Road – 500,000 SF
NorthPoint Development is selling a building.
• I-35 Logistics Crossing | 2801 N Houston School
Road – Crow Holdings is selling a 1.2M SF two (2) building portfolio
15
SUBMARKET INTELLIGENCE SOUTH STEMMONS
HLC OUTLOOK
CANON SHOULTS
Despite the COVID-19 Pandemic, South Stemmons industrial submarket continues to be one of the strongest performing submarkets in DFW. Leasing activity has remained healthy with the submarket reporting 2M SF of YTD positive absorption and 3.8M SF of YTD leasing activity. The submarket posted a 6.2% vacancy rate at the end of the 3Q. Rental rates and investment sales price PSF continue to rise despite COVID-19 business interruption. The submarket has continued to capitalize on its irreplicable infill location. Location has continued to outweigh functionality for tenant’s who benefit from the close proximity to Dallas CBD, the Medical District, Design District, and immediate access to thriving Dallas Neighborhoods.
HARRISON PUTT
Managing Principal cshoults@holtlunsford.com 972.280.8328
Market Associate hputt@holtlunsford.com 972.265.0124
Absorption
vs. Prev. Qtr
vs. 12 Mths Ago
(688,419)
2,658,463
(142,020)
Vacancy
vs. Prev. Qtr
vs. 12 Mths Ago
6.2%
5.4%
5.0%
Leasing Act.
vs. Prev. Qtr
vs. 12 Mths Ago
HLC Deal
1,368,564
1,715,257
2,357,814
U/C SF
vs. Prev. Qtr
vs. 12 Mths Ago
1,225,302
1,085,442
5,706,014
Delivered SF
vs. Prev. Qtr
vs. 12 Mths Ago
189,752
3,137,868
TOP TRANSACTIONS • Lone Star Holdings has signed a 67,066 SF renewal
193,000
in 3276-3284 Quebec Street with AEW Capital Management • Texas Classics Autos has signed a 32,528 SF renewal in 2436 Irving Boulevard with Texas Rubber Supply • Miguels Business Furniture Installation has signed a 24,782 SF lease in 2929 Irving Boulevard with CanTex Capital • American Foam and Rubber has signed a 24,640 SF renewal in 4900-4930 Sharp Street with AEW Capital Management • Dominion Equipment Parts has signed a 18,795 SF renewal in 11510-11530 Grissom Lane with Humphreys Capital
HLC Deal
VITAL STATS
8.0%
3,250,000 7.0% 2,750,000 6.0%
2,250,000
5.0%
1,750,000
4.0%
HLC Deal
1,250,000
3.0%
750,000
2.0%
250,000
1.0%
(250,000)
0.0%
(750,000) 3Q 17
4Q 17
1Q 18
Absorption
2Q 18
3Q 18
4Q 18
1Q 19
2Q 19
Deliveries
3Q 19
4Q 19
1Q 20
2Q 20
3Q 20
Vacancy
Source: CoStar 3Q 2020 Industrial Report
16
DEALS IN THE MARKET • 4900 Singleton Boulevard – Koch-Glitsch is selling a 30.64 acre tract of land and is currently under contract with Bandera. • M2G Ventures closed on 3200 Irving Blvd – 236,881 SF
• Westcore Properties closed on Stonelake’s 1.2M SF Portfolio on the market. The portfolio sale included 15 buildings, 6 of which are located in the South Stemmons submarket. • 1330 Regal Row – a 250,770 SF building • 901 Regal Row – a 46,000 SF building
NEW DEVELOPMENTS • Core 35 Logistics Center Phase II – a 220,412 SF spec development with Crow Holdings
• Colony Crossing - a 109,200 SF spec development with Colony Capital
LARGE EXISTING VACANCIES • 2701 W Rochelle Road - 494,238 SF • 10880 Goodnight Lane - 199,070 SF • 2803-2831 Dairy Milk Lane - 147,357 SF • 8801 Ambassador Row – 183,443 SF • 3200 Irving Boulevard – 112,000 SF • 9203 Chancellor Row – 95,549 SF • 10900 Goodnight Lane - 92,896 SF • 1144-1170 Quaker Street - 68,201 SF • 7600 Ambassador Row – 66,915 SF • 10155 E Technology Row – 62,000 SF
SUBMARKET INTELLIGENCE NORTH FORT WORTH
HLC OUTLOOK
MATT CARTHEY
HOGAN HARRISON
GEORGE JENNINGS
Partner mcarthey@holtlunsford.com 817.710.1111
Market Director gjennings@holtlunsford.com 817.632.6151
Market Associate hharrison@holtlunsford.com 817.710.7058
For the second consecutive quarter, the North Fort Worth industrial submarket has posted a double-digit vacancy rate of 10.1%, down slightly from 10.6% in 2Q 2020. The last time the submarket saw double-digit vacancy postings in consecutive quarters was in 3Q and 4Q 2015. To put these statistics into perspective, one has to consider the 6,510,286 SF of YTD deliveries the market has taken on which is more than 89% of the combined, total deliveries of South Dallas, GSW and DFW Airport during the same period of time. Net absorption remains a bright spot for North Fort Worth, outpacing all other submarkets in that statistical category with a YTD posting of 3,304,185 SF. This is nearly 1M SF greater than the next closest submarket postings of 2,399,178 SF in GSW, followed closely by South Dallas at 2,392,565 SF. We expect absorption to continue in a positive direction through the end of the calendar year but the vacancy rate to stagnate as an additional 3.8M SF could deliver by year-end.
TOP LEASE TRANSACTIONS Absorption
vs. Prev. Qtr
vs. 12 Mths Ago
952,416
415,340
1,704,688
Vacancy
vs. Prev. Qtr
vs. 12 Mths Ago
10.1%
10.6%
6.0%
Leasing Act.
vs. Prev. Qtr
vs. 12 Mths Ago
678,029
1,520,929
1,999,623
U/C SF
vs. Prev. Qtr
vs. 12 Mths Ago
8,816,728
7,426,040
11,470,980
Delivered SF
vs. Prev. Qtr
vs. 12 Mths Ago
460,346
2,993,938
DEALS IN THE MARKET
95,900
VITAL STATS
12.0%
• Mattel has signed a 1,007,500 SF renewal in 501 Meacham Boulevard with Majestic Realty. • Haggar has signed a 508,692 SF renewal in 5401 N Riverside Drive with Mapletree Investments. • RPM Expedite has signed a 219,396 SF expansion in 5457 Sandshell Drive with KKR. • S&B Industry has signed a 142,500 SF renewal in 13301 Park Vista Boulevard with Hillwood. • WBC has signed a 91K SF lease in 15277 Heritage Parkway with Trammell Crow Company.
3,350,000
• DFW Shallow Bay Industrial Portfolio – Fort Capital is selling a 609,639 SF eight (8) building portfolio • DFW Logistics Portfolio – Moxie Bridge is selling a 169K SF three (3) building portfolio
11.0% 2,850,000
10.0% 9.0%
2,350,000
8.0% 7.0%
1,850,000
6.0% 1,350,000
5.0% 4.0%
850,000
3.0% 2.0%
350,000
1.0% 0.0%
(150,000) 3Q 17
4Q 17
1Q 18
Absorption
2Q 18
3Q 18
4Q 18
1Q 19
2Q 19
Deliveries
3Q 19
4Q 19
1Q 20
2Q 20
3Q 20
Vacancy
Source: CoStar 3Q 2020 Industrial Report
NEW DEVELOPMENTS
• Northlink A, B & C – a 1,685,781 SF three (3) building project with Hines • Speedway Logistics Crossing – a 1,594,020 SF three (3) building project with Scannell • Intermodal Commerce Park – a 1.4M SF three (3) building project with Gruene Real Estate Partners • Elizabeth Creek Gateway – a 1,150,000 SF two (2) building project with DHL • Synergy Crossing – a 1,098,487 SF two (2) building project with TCRG Properties • 820 ExChange – a 951,316 SF four (4) building project with Creation Equity/Walton Street
• Alliance Center North 7 – a 810,908 SF development with Hillwood • Alliance Center North 3 – a 783,465 SF development with Hillwood • North Quarter 35 – a 644,989 SF four (4) building project with M2G Ventures • Alliance Northport 2 – a 460,248 SF development with Hillwood • Stanley Black & Decker – a 425K SF development with Hillwood
LARGE EXISTING VACANCIES • • • • • • • • • •
Alliance Westport 11 – 1,022,536 SF Trammell Crow at Eagle 35 | Building A – 1,089,642 SF Interstate Crossing – 1,023,488 SF Intermodal Logistics Center – 1,007,000 SF Westport Parkway Logistics Center – 677,160 SF Mark IV Commerce Park | Building 1 – 581K SF 2112 Eagle Parkway – 407,800 SF Westport at Alliance – 369,530 SF Northwest Commerce Park – 351,194 SF Alliance Gateway 2 – 303,458 SF
17
SUBMARKET INTELLIGENCE SOUTH FORT WORTH
HLC OUTLOOK
MATT CARTHEY
The South Fort Worth industrial submarket posted a 3Q 2020 vacancy of 6%, a figure up from 4.6% in 2Q 2020 which was still only out-performed by the GSW and NW Dallas submarkets. This increase in vacancy is due to the delivery of the 1,058,844 SF four (4) building spec project at Carter Distribution Center FED. We expect to see this vacancy rate continue to increase in 4Q 2020 and 1Q 2021 due to the delivery of other projects, such as with Black Creek Group, who has panels tilted and roofs in place on its 569K SF three (3) building project located on the southwest corner of Joel East and Oak Grove. Majestic’s 489,150 SF two (2) building project at its Fort Worth South Business Park also has panels up and roofs on. Both developments are slated for completion in 4Q 2020. Also in the mix with panels tilted and an anticipated 2Q 2020 delivery is Industrial Realty Group’s 212,175 SF building at the northwest corner of I-35 and I-20. If these projects are completed according to schedule the submarket will have more than 1.2M SF of spec development delivered in the next six months.
THOMAS GRAFTON
Partner mcarthey@holtlunsford.com 817.710.1111
Market Associate tgrafton@holtlunsford.com 817.632.6152
Absorption
vs. Prev. Qtr
vs. 12 Mths Ago
(150,059)
(237,440)
16,984
Vacancy
vs. Prev. Qtr
vs. 12 Mths Ago
6.0%
4.6%
4.6%
Leasing Act.
vs. Prev. Qtr
vs. 12 Mths Ago
TOP LEASE TRANSACTIONS
598,878
1,348,723
901,549
U/C SF
vs. Prev. Qtr
vs. 12 Mths Ago
1,991,573
2,989,996
1,440,053
Delivered SF
vs. Prev. Qtr
vs. 12 Mths Ago
1,058,844
22,800
In terms of 2021 speculative development in south Fort Worth, the pipeline is extremely robust. Two projects have recently broken ground and are in the process of installing utilities. These projects include Jackson Shaw’s three (3) building 562,670 SF spec development, 46 Ranch Logistics Park, and Bandera Ventures two (2) building 954,960 SF development on the northwest corner of Everman and Oak Grove. There are also three additional proposed developments that will likely be put into production later on in 2020. These projects include Ascendant Commercial’s 858,420 SF crossdock, VanTrust’s 670,914 SF crossdock, and IDI’s two (2) building 374,874 SF project. These developments will begin dirt work in 4Q 2020. While there is still upward of 4.1M SF of proposed development in the pipeline, we do not expect all sites to be put into production in the next year, with the exception of Crow Holdings Capital, Clarion, Rob Riner Co., and TCRG. Additional major land holdings are controlled by Majestic, Mereken Land, Hillwood, Agellen, and TCRG who are pursuing build-to-suits.
319,777
• Bassham Foods has signed a 71,850 SF lease in 301 E Risinger with TCRG Properties. • Alcon has signed a 24,419 SF sublease in 7821-7865 Will Rogers Rogers with AEW. • NTSC has signed a 15K SF lease in 5070 Brush Creek Road with Circle Industrial.
HLC Deal
HLC Deal
DEALS IN THE MARKET VITAL STATS
8.0%
1,250,000 1,050,000
7.0%
850,000 6.0%
• • • •
3209 Galvez Avenue – a 174,798 SF building 3131 W Bolt Street – a 136,570 SF building 600 S 2nd Street – a 81,154 SF building 1213 Antler Drive – 73,651 SF building
NEW DEVELOPMENTS • Carter Logistics Center – a 569K SF three (3) building project with Black Creek Group • 46 Ranch Logistics Park – a 562,669 SF three (3) building project with Jackson Shaw • Fort Worth South Business Park | Buildings 2 & 3 – a 489,494 SF two (2) building project with Majestic Realty • Southwest Crossing Logistics Center – a 212,175 SF development with Industrial Realty Group • South Fort Worth Logistics Center – a 954,960 SF two (2) building project with Bandera Ventures • Fort Worth 1-35 Logistics Center | Building 3 – a 858,420 SF development by Ascendant Commercial
650,000
5.0%
450,000
4.0%
250,000 50,000
3.0%
-150,000
2.0%
-350,000 1.0%
-550,000
0.0%
-750,000 3Q 17
4Q 17
1Q 18
2Q 18
Absorption
3Q 18
4Q 18
1Q 19
2Q 19
Deliveries
3Q 19
4Q 19
1Q 20
2Q 20
3Q 20
Vacancy
Source: CoStar 3Q 2020 Industrial Report
18
LARGE EXISTING VACANCIES • • • • •
7550 Oak Grove Road – 498,475 SF 2200 Heritage Parkway – 459,868 SF 1501 Joel East Road – 391,985 SF 1701 Joel East Road – 293,705 SF 6601 Oak Grove Road – 264,125 SF
DALLAS
5950 Berkshire Lane Suite 900 Dallas, Texas 75225 T 972.241.8300 F 972.241.7955
FORT WORTH
1200 Summit Avenue Suite 300 Fort Worth, Texas 76102 T 817.710.1110 F 817.810.9017
www.holtlunsford.com
HOUSTON
11451 Katy Freeway Suite 300 Houston, Texas 77079 T 713.850.8500 F 713.850.8550