1Q 2021 DFW Industrial Market Brief

Market Brief...

Dallas/Fort Worth

INDUSTRIAL

1Q2021 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

McKINNEY PONDER

P

FRISCO

NORTHWEST DALLAS 5,194,737 SF

JUSTIN

BOYD

ALLEN

THE COLONY

FAR NORTHEAST DALLAS 3,481,473 SF PLANO

LEWISVILLE FLOWER MOUND

HLC SUBMARKET COVERAGE

ROANOKE

COPPELL

ADDISON

GRAPEVINE

RICHARDSON

DFW ALEDO

CARROLLTON

HASLET

NORTH FORT WORTH 4,008,511 SF

KELLER

SOUTHLAKE

DFW AIRPORT 2,257,984 SF

FARMERS BRANCH

DFW INTERNATIONAL AIRPORT

GARLAND

LAS COLINAS

COLLEYVILLE

FORT WORTH MEACHAM INTERNATIONAL AIRPORT

DALLAS LOVE FIELD

BEDFORD

RICHLAND HILLS

IRVING

EULESS

HURST

DALLAS

SOUTH STEMMONS 2,563,484 SF

SUNNYVALE MESQUITE

NORTHEAST/EAST DALLAS 5,179,511 SF

FORT WORTH

GREAT SW/ARLINGTON 3,448,035 SF ARLINGTON

DALLAS EXECUTIVE AIRPORT

GRAND PRAIRIE

BENBROOK

DUNCANVILLE

LANCASTER

SOUTH FORT WORTH 6,120,307 SF DESOTO CEDAR HILL

RENDON

SOUTH DALLAS 4,551,814 SF

MANSFIELD CRESSON

BURELSON

5

5 MIDLOTHIAN

HLC DFW INDUSTRIAL MARKET EXPERTS

MATT CARTHEY

CANON SHOULTS

JOHN GORMAN

JOSH BARNES

ANDREW GILBERT

BEN WALLACE

GEORGE JENNINGS

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

MADDY CANTY

HOGAN HARRISON

KEATON BRICE

BLAKE TROIANI

MITCH CANTWELL

Market Associate tgrafton@holtlunsford.com 817.632.6152

Market Associate mcanty@holtlunsford.com 972.280.8325

Market Associate hharrison@holtlunsford.com 817.710.7058

Market Associate kbrice@holtlunsford.com 972.421.1956

Market Analyst btroiani@holtlunsford.com 972.265.0126

Market Analyst mcantwell@holtlunsford.com 972.265.0133

7

HLC DFW

HLC OUTLOOK Absorption

vs. Prev. Qtr

2,590,144

3,657,890

8,867,754

Vacancy

vs. Prev. Qtr

vs. 12 Mths Ago

7.3%

7.0%

6.5%

Leasing Act.

vs. Prev. Qtr

vs. 12 Mths Ago

12,580,575

16,152,405

18,351,234

U/C SF

vs. Prev. Qtr

vs. 12 Mths Ago

27,796,644

26,165,660

29,662,643

Delivered SF

vs. Prev. Qtr

vs. 12 Mths Ago

6,033,495

5,174,140

INDUSTRIAL TRENDS & TRANSACTIONS

vs. 12 Mths Ago

10,051,030

The Dallas-Fort Worth industrial market began 2021 in record setting fashion thanks to the loosening of restrictions related to COVID and increased vaccinations. There is a renewed energy that has taken over the market thus allowing rents to climb and concessions to decrease.

The DFW Industrial market set a new high watermark with 10.5M SF of net positive absorption and 13.9M SF of leasing activity. Significant leasing activity in DFW Airport and South Dallas have led the charge to allow the overall market vacancy to remain stable at a healthy +/- 6.9%.

At the end of 1Q 2021, absorption outpaced supply even with the delivery of 7.1M SF of new space. The development landscape is at a historic pace with 26.1M SF under construction and new announcements coming soon. We are seeing development span to new areas of the metroplex as large entitled industrial sites are becoming more scarce and the institutional demand continues to increase as capital markets flee other product types.

As we enter 2Q 2021, we expect the overall industrial market will continue strong as many of the large 3PL and e-commerce tenants are hiring and expanding in the DFW market. We expect DFW to outperform other parts of the country as it continues to be the biggest benefactor of large-scale relocation efforts and population growth.

TRENDS DUE TO COVID-19

• COVID-19 has increased the demand for industrial space due to the expansion of E- Commerce demands.

• The DFW Industrial market as a whole has returned to pre COVID-19 norm.

• Developers are still scouting new land positions and the development pipeline is strong and active.

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

• Petco leased 608,939 SF from Clarion at 4775 Tinsley Road off I-30.

• Crow Holdings Industrial leased 576,123 SF at 1113 W Oakdale Road.

• Bissell leased 524,800 SF from Barrings at 2821 Danieldale Road off I-20.

• FB Flurry signed a 472,200 SF lease at 3737 W Miller Road with Clarion Partners.

• Rhino Health has signed a 400,857 SF lease at Fort Worth South Business Park with Majestic Realty.

• SiteOne leased 337,931 SF at 1200 W Wintergreen from Cabot Properties • EMLS signed a 398,442 SF lease with Ironwood in Denton on Western Boulevard.

• IDC Logistics signed a 351,194 SF lease at 2773 Highway 114 with LaSalle Investment Management.

• SiteOne leased 337,931 SF at 1200 W Wintergreen with Cabot Properties.

• Oatley has signed a 313,753 SF lease in 7550 Will Rogers with CIM. • Quorum International signed a 305,225 SF renewal at 401 Railhead Road with Sun Life.

• Elong International signed a 264,038 SF lease with DRA Advisors at 1720 Hayden Drive in Carrollton.

• Productiv, Inc has signed a 213,392 SF lease at 2450 Esters with Invesco.

• Pitney Bowes has signed a 194,950 SF lease with Perot / Invesco at their new development at 3050 Highway 161 in Irving.

• Elements International signed a 177,473 SF lease at Republic Parkway – Building 1 with Urban Logistics.

• Smart Warehousing signed a 154,742 SF lease at 4000 E Sam Lee Lane.

• MRC signed a 138,895 SF lease at 2911 S Great Southwest Parkway with Bixby.

• Rev 1 signed a 133,281 lease at 1851 Joel East Road.

• Lineage Redistribution signed a 122,500 SF lease at 6445 Will Rogers Boulevard.

• Circle U Foods signed a 122,089 SF lease at 3200 Meacham Boulevard.

• Walgreens signed a 100K SF lease at 4100 Dale Earnhardt Way.

HLC Deal HLC Deal

8

HLC DFW FACTS & FIGURES

Market DFW Airport

Existing Inventory

Vacancy

# Bldgs.

Total RBA

Direct SF

Total SF

Vac. %

656

86,753,618

4,760,146

5,683,885

6.6%

615

48,798,939

2,421,966

2,536,574

5.2%

Great SW/Arlington

1,120

117,020,806

6,261,849

6,509,638

5.6%

Henderson County

18

1,219,296

29,968

29,968

2.5%

North Fort Worth

739

114,343,664

12,107,646

13,239,495

11.6%

1,544

115,902,021

8,939,306

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%

East Dallas

Northeast Dallas

OVERALL DFW

8.0%

9,484,689

8.2%

4,000,000

2.0%

2,000,000

1.0% 0.0%

0 1Q 18

2Q 18

3Q 18

4Q 18

1Q 19

2Q 19

3Q 19

Absorption

4Q 19

1Q 20

2Q 20

3Q 20

Deliveries

4Q 20

1Q 21

Vacancy

VACANCY - OVERALL DFW 10.0% 9.0% 8.0% 6.9% 6.2% 6.5% 5.8%

Northwest Dallas NW Dallas Outlying South Dallas

1,379

114,447,926

5,480,413

5,990,809

5.2%

27

2,285,834

97,941

97,941

4.3%

701

105,127,102

6,523,504

6,673,330

6.3%

South Fort Worth

1,456

83,660,066

5,660,633

5,887,200

7.0%

South Stemmons

2,077

115,864,961

6,128,109

6,282,014

5.4%

Totals

10,332

905,424,233

58,411,481

62,415,543

6.9%

7.0% 6.0% 5.0% 4.0% 3.0% 2.0%

0.4%

0.4%

1.0% 0.0%

1Q 18

2Q 18

3Q 18

4Q 18

1Q 19

2Q 19

3Q 19

Direct

4Q 19

1Q 20

2Q 20

3Q 20

4Q 20

Sublet

1Q 21

Total

ABSORPTION - OVERALL DFW 22,500,000 20,000,000 17,500,000

YTD Net Absorption

YTD Deliveries

Under Construction SF

YTD Leasing Activity

DFW Airport

3,908,008

1,768,428

765,199

1,492,063

East Dallas

1,083,815

545,597

1,688,487

136,801

Market

15,000,000 12,500,000 10,000,000 7,500,000 5,000,000 2,500,000 0

Great SW/Arlington

657,724

0

621,276

1,413,439

Henderson County

0

0

0

0

North Fort Worth

751,257

1,954,408

6,073,502

3,116,027

Northeast Dallas

261,510

1,800,857

2,116,681

1,864,220

Northwest Dallas

1,209,043

1,047,168

1,442,426

1,982,582

4,318

0

30,000

21,750

1,898,886

0

6,099,725

1,059,457

South Fort Worth

28,732

0

5,584,906

843,093

South Stemmons

701,446

0

1,162,440

2,002,316

10,504,739

7,116,458

25,584,642

13,931,748

NW Dallas Outlying South Dallas

1Q 18

2Q 18

3Q 18

4Q 18

1Q 19

2Q 19

3Q 19

4Q 19

Total Net

1Q 20

2Q 20

3Q 20

4Q 20

1Q 21

Leasing Activity

CONSTRUCTION - OVERALL DFW 40,000,000 35,000,000 30,000,000 25,000,000 20,000,000 15,000,000 10,000,000

Totals

5,000,000 0 1Q 18

2Q 18

3Q 18

4Q 18

1Q 19

2Q 19

Delivered Inventory

3Q 19

4Q 19

1Q 20

2Q 20

3Q 20

4Q 20

1Q 21

Under Construction

9 Source: CoStar 1Q 2021 Industrial Report

SUBMARKET INTELLIGENCE GREAT SOUTHWEST/ARLINGTON

HLC OUTLOOK

CANON SHOULTS

MADDY CANTY

Managing Principal cshoults@holtlunsford.com 972.280.8328

Absorption

The Great Southwest (GSW) industrial submarket continued the momentum from 2020 to end 1Q 2021 in a stable position. At 1Q 2021, GSW reported overall positive absorption of 657,724 SF with 1.4M SF of leasing activity. GSW reported no new construction completions as of the end of 1Q 2021, and new construction remains steady with 621,276 SF of new projects under construction. The 1Q 2021 vacancy rate decreased slightly to 5.6% versus 6.1% at year-end 2020. As we continue into 2021, we expect the GSW market to only strengthen as tenant demand continues to expand across the DFW market and the supply of large blocks of space in GSW tightens.

Market Associate mcanty@holtlunsford.com 972.280.8325

vs. Prev. Qtr

TOP LEASE TRANSACTIONS

vs. 12 Mths Ago

657,724

152,938

1,944,433

Vacancy

vs. Prev. Qtr

vs. 12 Mths Ago

5.6%

6.1%

5.4%

Leasing Act.

vs. Prev. Qtr

vs. 12 Mths Ago

1,413,439

3,153,614

1,723,832

U/C SF

vs. Prev. Qtr

vs. 12 Mths Ago

621,276

473,316

977,680

Delivered SF

vs. Prev. Qtr

vs. 12 Mths Ago

-

576,123

3,100,000

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) 2Q 18

3Q 18

Absorption

4Q 18

1Q 19

2Q 19

3Q 19

4Q 19

Deliveries

1Q 20

2Q 20

3Q 20

4Q 20

1Q 21

Vacancy

Source: CoStar 1Q 2021 Industrial Report

10

• 975 W Oakdale Road – a 221,335 SF spec development with Crow Holdings Industrial

• Morrison Express signed a 73,962 SF lease at 2951 N Great Southwest Parkway with ProLogis.

• Cooper Commerce Center | 7005 S Cooper Street – a 205,033 SF spec development with NorthPointe Development

• Locomotion Transmission signed a 58,841 SF lease at 1721 Susan Drive with PetroChoice.

• Superior Relocation Services LLC expanded into 40,500 SF at 1171 113th Street with Alpha Industrial.

• Southwest Networks, Inc. renewed their 25,798 SF lease at 1111 W Carrier Parkway with Sealy.

9.0%

1Q 18

• MRC signed a 138,895 SF lease at 2911 S Great Southwest Parkway with Bixby.

HLC Deal

VITAL STATS

10.0%

• Remington I-30 – a 244,920 SF spec development with Graff Interests

HLC Deal

2,068,225

NEW DEVELOPMENTS

• Comptree signed a 576,123 SF at 1113 W Oakdale Road with Crow Holdings Industrial.

DEALS IN THE MARKET • Exeter Multi-Market Portfolio – Exeter is selling a multimarket portfolio with 1.7M SF in the GSW/Arlington submarket.

• Great Southwest Shallow Bay Industrial Portfolio – Fort Capital is selling a 582,803 SF Shallow Bay portfolio in the GSW market.

• DFW Last-Mile Portfolio – CanTex is selling a 289,225 SF Shallow Bay portfolio. Three buildings of the six (6) building portfolio are in the GSW market.

• Warrior Trail Crossing | 2590 W Warrior Trail – a 176,670 SF spec development with USAA Real Estate • 4801 & 4751 Collings Street – a two (2) building 148,127 SF spec development with Jackson Shaw • Wildlife 9 | 2401 N Beltline Road – a 147,960 SF spec development with Crow Holdings Industrial • Forum Commerce Center | 2240 Forum Drive – a 129,450 spec development with Johnson Development Associates, Inc

LARGE EXISTING VACANCIES • Prologis GSW 54 | 3800 E Avenue E – 492,500 SF • Oakdale Logistics Center | 949 W Oakdale Road – 401,557 SF (Lease Pending) • 602-604 Fountain Parkway – 231,034 SF • 3550 Roy Orr Boulevard – 149,058 SF • Prologis GSW 51 | 2750 114th St – 146,748 SF

SUBMARKET INTELLIGENCE DFW AIRPORT

HLC OUTLOOK The Dallas-Fort Worth (DFW) Airport industrial submarket ended the year with a 6.6% vacancy rate. The vacancy had a major drop from the 9.2% rate at the end of 2020. Big blocks of space in Passport Park and at Perot/Invesco’s 161 development were a strong part of the dip in the Airport’s vacancy stats.

Rental rates remained strong and are expected to continue to grow in 2021. The bulk warehouse rental rates are increasing into the mid $5 - $6 rate depending on building age in the 50K - 100K SF range and functional shall bay product can range from $6 to $8.50 depending on the finish level. Rental abatements range from one to three months depending on renewal versus new deals and the size of the lease transaction. Tenant improvement costs remained high because of increasing construction costs.

ANDREW GILBERT

KEATON BRICE

Market Director agilbert@holtlunsford.com 972.280.8312

Absorption

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

3,908,008

412,302

48,473

Vacancy

vs. Prev. Qtr

vs. 12 Mths Ago

6.6%

9.2%

7.2%

Leasing Act.

vs. Prev. Qtr

vs. 12 Mths Ago

1,492,063

2,421,227

2,751,550

U/C SF

vs. Prev. Qtr

vs. 12 Mths Ago

765,199

2,533,627

6,997,556

Delivered SF

vs. Prev. Qtr

vs. 12 Mths Ago

1,768,428

1,735,903

264,983

VITAL STATS

10.0%

TOP LEASE TRANSACTIONS • Productiv, Inc has signed a 213,392 SF lease at 2450 Esters with Invesco.

• Pitney Bowes has signed a 194,950 SF lease with Perot / Invesco at their new development at 3050 Highway 161 in Irving.

• Bio World leased 123,793 SF with Trammell Crow at their Passport Park development at 2650 Rental Car Drive.

• CHEP has signed a 70,100 SF lease at 500 Enterprise Drive with Clarion Partners.

• Top Fitness has signed a 62,370 SF at 8110-8114 Tristar Drive.

4,000,000

9.0%

3,500,000

8.0%

3,000,000

7.0%

2,500,000

6.0%

2,000,000

5.0%

1,500,000

4.0%

1,000,000

3.0%

500,000

2.0%

0

1.0%

(500,000)

0.0%

DEALS IN THE MARKET • Passport Park – Trammell Crow is selling their Passport Park development. The deal includes four (4) buildings totaling over 2M SF. Currently 97% leased.

• Gateway 161 Corporate Park – Hines is selling their three (3) building park just east of the Airport totaling 259,555 SF.

NEW DEVELOPMENTS • DFW Park 161 – a 2.5M SF four (4) building project with Perot Development Company and Invesco • Edmonds Airport Trade Center – a 62,820 SF building at 121 and Edmonds in Lewisville with HlCI/TA, set for completion in April 2021 • Majestic Airport Trade Center – a 284K SF two (2) building project with Majestics, set for completion in 1Q 2021 • Bison Grove Business Park – four (4) buildings totaling 880K SF under construction with Hines. Set to be delivered in 4Q 2021 in Lewisville • Prologis and High Street will be breaking ground this year on their Lewisville developments

HLC Deal

LARGE EXISTING VACANCIES • • • •

500 Airline Drive – 127,268 SF 217 Wrangler – 115,200 SF 1555 N Airfield Drive – 113,640 SF 9015 Sterling – 104,239 SF

(1,000,000) 1Q 18

2Q 18

3Q 18

Absorption

4Q 18

1Q 19

2Q 19

3Q 19

4Q 19

Deliveries

1Q 20

2Q 20

3Q 20

4Q 20

1Q 21

Vacancy

Source: CoStar 1Q 2021 Industrial Report

11

SUBMARKET INTELLIGENCE NORTHEAST/EAST DALLAS

HLC OUTLOOK The Northeast/East Dallas submarket has performed extremely well to start off 2021. We have seen a drastic increase in activity, tenant optimism, and deals closing. This is evidenced by the market having it’s best net absorption (1.6M SF) since 3Q 2018. Capital Markets are reacting and have become even more aggressive believing there. With undeveloped infill sites becoming more scarce, developers are turning eyes to available land in more outlying markets such as Forney and Terrell which we are currently tracking over 8M SF of spec industrial development in the planning stages.

JOSH BARNES

BEN WALLACE

Senior Vice President jbarnes@holtlunsford.com 972.280.8353

Market Director bwallace@holtlunsford.com 972.421.1966

TOP LEASE TRANSACTIONS • FB Flurry signed a 472,200 SF lease at 3737 W Miller Road with Clarion Partners.

Absorption

vs. Prev. Qtr

vs. 12 Mths Ago

1,592,004

(214,878)

396,080

Vacancy

vs. Prev. Qtr

vs. 12 Mths Ago

7.0%

7.2%

7.3%

Leasing Act.

vs. Prev. Qtr

vs. 12 Mths Ago

Kearney with Dalfen Industrial.

• Elements International signed a 177,473 SF lease at Republic Parkway – Building 1 with Urban Logistics.

1,398,452

2,237,605

927,475

vs. Prev. Qtr

vs. 12 Mths Ago

• Lasco Fittings signed a 83,068 SF lease at 3800 Leon Road with IDI Logistics.

392,672

1,915,282

1,032,628

Delivered SF

vs. Prev. Qtr

vs. 12 Mths Ago

198,109

• Barrett Distribution expanded into a total of 264,965 SF at 3800 Leon Road with IDI Logistics.

U/C SF

1,522,610

• Steve Silver signed a 407,195 SF lease at 1440 E

• Collier Metal Specialties signed a 80K SF renewal at 3353 S Miller Park Drive with Clarion Partners.

0

• ICON EV expanded into a total of 77,143 SF at

HLC Deal

10350 Brockwood with Cabot.

VITAL STATS

9.0%

• ATC Transportation signed a 75,676 SF lease at 1,800,000

8.0%

1,550,000

7.0%

1,300,000 6.0% 1,050,000 5.0%

800,000

4.0%

550,000

3.0%

300,000

2.0%

50,000

1.0%

(200,000)

0.0%

(450,000) 1Q 18

2Q 18

3Q 18

Absorption

4Q 18

1Q 19

2Q 19

3Q 19

4Q 19

Deliveries

1Q 20

2Q 20

3Q 20

4Q 20

1Q 21

Vacancy

Source: CoStar 1Q 2021 Industrial Report

12

12750 Perimeter Drive with DRA Advisors.

• Parsens Global signed a 59,132 SF lease at 11441 Hillguard with Prologis.

• Optex Systems signed a 44,867 SF lease at 9827 Chartwell with DRA Advisors.

• ProBuilt Tools signed a 42,558 SF lease at 4002 W Miller with Barings.

• API Systems signed a 37,252 SF renewal at 10575 Vista Park Circle with DRA Advisors.

DEALS IN THE MARKET • Urban District 30 – a 980,700 SF five (5) building spec project with Urban Logistics Realty is Under Contract.

• Skyline Commerce Center – a 198,109 SF two (2) building spec project with Connor Commercial is Under Contract.

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

• East Dallas Commerce Center – a 373,322 SF spec development with IDI Logistics

• Sunnyvale Business Center - a 643,760 SF spec development with Langford Properties

LARGE EXISTING VACANCIES • 1440 E Kearney Street – 407,195 SF • 1201 Big Town Boulevard – 208,750 SF • 1455 Republic Parkway – 169,924 SF • 1465 IH30 – 158,701 SF • 2610 McCree Road – 152,139 SF • 12019 Corporate – 144,824 SF • 4401 Samuell Boulevard – 143,801 SF • 1801 S Shiloh – 131,960 SF

SUBMARKET INTELLIGENCE FAR NORTHEAST DALLAS

HLC OUTLOOK Far Northeast Dallas has continued to perform well as we have entered into 2021. 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. The hypothesis of pent-up demand in these outer markets 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

Absorption

vs. Prev. Qtr

vs. 12 Mths Ago

666,624

388,252

309,007

Vacancy

vs. Prev. Qtr

vs. 12 Mths Ago

7.0%

6.8%

6.9%

Leasing Act.

vs. Prev. Qtr

vs. 12 Mths Ago

502,060

677,249

905,322

U/C SF

vs. Prev. Qtr

vs. 12 Mths Ago

2,199,191

3,030,265

1,650,470

Delivered SF

vs. Prev. Qtr

vs. 12 Mths Ago

851,774

297,473

259,150

HLC Deal

LARGE EXISTING VACANCIES • • • • • • • •

3827 N McDonald Street (A) – 301,320 SF 915 Enterprise Boulevard – 195,743 SF 3827 N McDonald Street (B) – 129,914 SF 310 Wilmeth Road – 111,651 SF 660 N Dorothy Drive – 105K SF 105 W Bethany Drive – 103K SF 3605 E Plano Parkway – 100,320 SF 1125 E Collins Boulevard – 100,150 SF

NEW DEVELOPMENTS

VITAL STATS

8.0%

• Hisun Motors signed a 75,250 SF lease at 1250 Wattley Way with Exeter Property Group.

• L&S Mechanical signed a 63,780 SF lease at 330 Wilmeth Road with ML Realty.

• Pacific Trading signed a 44,898 lease at 2800 Technology with Prologis.

• Lintec of America signed a 31,607 SF lease at 2900 E Plano Parkway with Provident.

• Segway signed a 36,549 SF lease at 415 Interchange Street with KKR. • Max Geld Management signed a 29,628 SF lease at 2901 Technology with Mapletree.

HLC Deal

1,000,000

7.0%

850,000

6.0%

700,000

5.0%

550,000

4.0%

400,000

3.0%

250,000

2.0%

100,000

1.0%

(50,000)

0.0%

• AMZL (McKinney) BTS – 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 • McKinney Logistics Center – a 193,090 SF spec development with HLCI/TA Realty • Richardson Logistics Center – a 174,720 SF two (2) building spec project with HLCI/TA Realty

HLC Deal

HLC Deal

(200,000) 1Q 18

2Q 18

3Q 18

Absorption

4Q 18

1Q 19

2Q 19

3Q 19

4Q 19

Deliveries

1Q 20

2Q 20

3Q 20

4Q 20

1Q 21

Vacancy

Source: CoStar 1Q 2021 Industrial Report

13

SUBMARKET INTELLIGENCE NORTHWEST DALLAS

HLC OUTLOOK

ANDREW GILBERT

KEATON BRICE

Market Director agilbert@holtlunsford.com 972.280.8312

Absorption

Through 1Q 2021, the Northwest Dallas industrial submarket is off to a booming start. Large leases have taken place and the demand has been outstanding for all deal sizes. EMLS, Network Wireless Solutions, Corradi USA and Elong International all absorbed space greater than 100K SF in 1Q 2021. In the past year, the deal velocity slowed down for deals greater than 100K SF, but in 1Q 2021 that trend was reversed. The submarket posted a vacancy rate of 5.2% which decreased from 5.4% at the end of 2020. Longpoint and TA are underway on their shall bay developments in Carrollton and Hunt Southwest and TA are under construction in Denton. We expect the Northwest Dallas submarket to produce more strong statistics as we progress in 2021.

Market Associate kbrice@holtlunsford.com 972.421.1956

vs. Prev. Qtr

vs. 12 Mths Ago

1,209,043

248,346

43,092

Vacancy

vs. Prev. Qtr

vs. 12 Mths Ago

5.2%

5.4%

5.2%

Leasing Act.

vs. Prev. Qtr

vs. 12 Mths Ago

1,982,582

3,698,436

1,974,362

U/C SF

vs. Prev. Qtr

vs. 12 Mths Ago

1,442,426

1,505,948

2,547,782

Delivered SF

vs. Prev. Qtr

vs. 12 Mths Ago

1,047,168

412,040

328,988

6.0% 1,700,000

5.0%

1,300,000

4.0%

900,000

3.0%

2.0%

500,000

1.0%

100,000

0.0%

(300,000) 2Q 18

3Q 18

Absorption

4Q 18

1Q 19

2Q 19

3Q 19

4Q 19

Deliveries

1Q 20

HLC Deal

Carrollton from Stockbridge.

• EMLS signed a 398,442 SF lease with Ironwood in Denton on Western Boulevard.

• Elong International signed a 264,038 SF lease with DRA Advisors at 1720 Hayden Drive in Carrollton.

• Network Wireless Solutions signed a 129,611 SF lease with Link Industrial at 2040 McKenzie Drive in Carrollton.

DEALS IN THE MARKET • Halliburton Site – 66 Acres on Belt Line

VITAL STATS

1Q 18

TOP TRANSACTIONS • Corradi USA purchased 1910 N Josey Lane in

2Q 20

3Q 20

4Q 20

1Q 21

Vacancy

Source: CoStar 1Q 2021 Industrial Report

Road in Carrollton. Currently marketed as a redevelopment opportunity.

• 13500 N Stemmons Freeway – a 100K SF freestanding building located off of I-35 and Valley View Lane

NEW DEVELOPMENTS • I-35 Convergence – 250,080 SF spec development with Hunt Southwest, set for delivery in 3Q 2021

• Point 35/90 – 176,500 SF spec development in

Carrollton with Longpoint Realty Partners, set for delivery in 4Q 2021 14

• Valwood Trade Center – a 138,975 SF two (2)

HLC Deal

building project in Carrollton with HLCI/TA, set for delivery in 2Q 2021 • Denton Point I & II – a 130K SF two (2) building project in Denton with HLCI/TA, set for delivery in 2Q 2021 • Golden Bear Distribution Center – a 125K SF shallow bay development in Carrollton with HLCI/ TA, set for delivery in 2Q 2021

HLC Deal

HLC Deal

LARGE EXISTING VACANCIES • 2001 Midway Road – 219,808 SF • 1701 Valley View Lane – 159,405 SF • 3401 Garden Brook – 133K SF • 13500 N Stemmons Freeway – 100K SF • 1605 Lakeway Drive – 87,624 SF

SUBMARKET INTELLIGENCE SOUTH DALLAS

HLC OUTLOOK

JOHN GORMAN

South Dallas Industrial submarket as surveyed is 133M SF and is now 6.4% vacant which is 0.9% lower than reported in 4Q 2020. In accordance with the area surveyed, CoStar is reporting 2,223,454 SF of Net Absorption for South Dallas in 1Q 2021. South Dallas has 10.1M SF under construction in the I-30, I-20, & I-45 corridors combined. Of that construction, 22% or 2.2M SF of the new construction is for Build-to-Suit or Design Build assignments. The remaining 78% or 7.8M SF under construction is speculative development. For the past 18 months the South Dallas submarket of I-30, I-20 and I-45 averaged a single digit vacancy rate of 7.3% which allowed it to align with the remaining Dallas submarkets that have enjoyed single digit vacancy for quite some time. However, many expect that single digit vacancy to rise again soon with various developers and the projects under construction and on the horizon.

CANON SHOULTS

Senior Vice President jgorman@holtlunsford.com 214.920.9800

Managing Principal cshoults@holtlunsford.com 972.280.8328

Please note: The area CoStar uses for the South Dallas Submarket differs slightly from the Submarket John covers. Numbers may vary.

Absorption

vs. Prev. Qtr

vs. 12 Mths Ago

1,898,886

1,358,541

2,572,612

Vacancy

vs. Prev. Qtr

vs. 12 Mths Ago

6.3%

8.2%

8.8%

Leasing Act.

vs. Prev. Qtr

vs. 12 Mths Ago

1,059,457

2,327,153

1,980,794

U/C SF

vs. Prev. Qtr

vs. 12 Mths Ago

6,099,725

4,700,036

1,700,581

Delivered SF

vs. Prev. Qtr

vs. 12 Mths Ago

0

250,000

169,688

Tinsley Road off I-30.

3,200,000 2,700,000

10.0%

2,200,000

8.0%

1,700,000

6.0%

1,200,000

4.0%

700,000

2.0%

200,000

0.0%

(300,000)

Absorption

4Q 18

1Q 19

2Q 19

3Q 19

4Q 19

Deliveries

1Q 20

• DW Distribution leased 237,678 SF from CalSTRS at 2001 Danieldale Road off I-20.

• Careismatic Brands leased 152K SF from Billingsley at 2150 French Settlement Road off I-30.

DEALS IN THE MARKET • 3001 Midpoint Drive – DSV International is selling

12.0%

3Q 18

• Gulf Relay leased 350,150 SF from Clarion at 1221 E Centre Park off I-35.

14.0%

2Q 18

• Bissell leased 524,800 SF from Barrings at 2821 Danieldale Road off I-20.

VITAL STATS

1Q 18

TOP LEASE TRANSACTIONS • Petco leased 608,939 SF from Clarion at 4775

2Q 20

3Q 20

4Q 20

1Q 21

Vacancy

Source: CoStar 1Q 2021 Industrial Report

their 1,001,455 SF Design Build with JLL.

• E Cleveland Road – 800,737 SF spec development

by USAA/Seefried

• 3130 N Longhorn Drive – 603,378 SF spec development by PME Oakmont

LARGE EXISTING VACANCIES • 2119 N I-35 E – 458,588 SF spec remaining with Clarion

• 4130 Port Boulevard – 403,200 SF (2nd generation space)

• 3535 N Houston School Road – 399,621 SF spec remaining with Prologis

• 2200 Danieldale Road – 393K SF with CalSTRS (2nd generation space)

• 220 E Danieldale Road – 385,472 SF with Bradford (2nd generation space)

NEW DEVELOPMENTS • Southport Parkway | Buildings 1 & 2 – 2,126,880 SF spec development by Xebec

• 1300 E Fulghum Road – 1,039,360 SF spec development by Logistics Property Co.

• 3199 Telephone Road – 1,008,140 SF spec development by Van Trust

• 3001 Midpoint Drive – 1,001,455 SF BTS by Panattoni for DSV International

• 3800 Cedardale Road | Building 2 – 998,640 SF spec development by TCC/Morgan Stanley

15

SUBMARKET INTELLIGENCE SOUTH STEMMONS

HLC OUTLOOK

CANON SHOULTS

The South Stemmons industrial submarket continues to be one of the strongest performing submarkets in Dallas-Fort Worth. Leasing activity has continued to remain healthy with the submarket reporting 2M SF of leasing activity, as well as 701,446 SF of positive absorption for 1Q 2021. The submarket posted a 5.4% vacancy rate at the end of the 1Q 2021, which has improved from the 6.0% vacancy rate posted at year end 2020. Rental rates and price per SF continue to rise across the board. The submarket has continued to capitalize on its irreplicable infill location, and location has continued to outweigh functionality for tenant’s who benefit from the close proximity to Dallas CBD, the Medical District, and immediate access to thriving Dallas suburbs.

MADDY CANTY

Managing Principal cshoults@holtlunsford.com 972.280.8328

Market Associate mcanty@holtlunsford.com 972.280.8325

Absorption

vs. Prev. Qtr

vs. 12 Mths Ago

701,446

(161,082)

130,235

Vacancy

vs. Prev. Qtr

vs. 12 Mths Ago

6.0%

5.1%

Leasing Act.

vs. Prev. Qtr

vs. 12 Mths Ago

2,002,316

1,540,524

772,771

vs. Prev. Qtr

vs. 12 Mths Ago

1,162,440

833,082

3,617,072

Delivered SF

vs. Prev. Qtr

vs. 12 Mths Ago -

30,970 SF at 112 N Union Bower with ML Realty.

• Fleetpride signed a 22,945 SF lease at 3942 Irving Boulevard with ML Realty.

• Brothers Cabinetry Company signed a 22,402 SF

HLC Deal

lease at 9224 King Arthur with Stonelake.

• Community Coffee Company renewed their 23,800

HLC Deal

VITAL STATS

8.0%

1110 Inwood Road with Hines.

• LVTong USA Golf Cars expanded into a total of

HLC Deal

U/C SF

392,220

Row with Prologis.

• Designer Delivery renewed their 31,474 SF lease at

HLC Deal

5.4%

-

TOP TRANSACTIONS • Gold 3PL has signed a 59,440 SF lease at 111 Regal

SF lease at 1140 Inwood Road with Hines.

2,750,000 7.0% 2,250,000 6.0% 1,750,000

5.0%

1,250,000

4.0%

750,000

3.0% 2.0%

250,000

1.0%

(250,000)

0.0%

(750,000) 1Q 18

2Q 18

3Q 18

Absorption

4Q 18

1Q 19

2Q 19

3Q 19

4Q 19

Deliveries

1Q 20

2Q 20

3Q 20

4Q 20

1Q 21

Vacancy

Source: CoStar 1Q 2021 Industrial Report

16

DEALS IN THE MARKET • DFW Last Mile Portfolio with CanTex – 6 buildings totaling 289,225 SF with 3 buildings in West Brookhollow • 3131 Halifax Street – a 41K SF building

NEW DEVELOPMENTS • Core 35 Logistics Center | Phase II – a 220,412 SF spec development with Crow Holdings Industrial

• 9749 Clifford Drive – a 109,200 SF spec development with Link Industrial

LARGE EXISTING VACANCIES • 8401 Ambassador Row – 219,175 SF • 3200 Irving Boulevard – 112K SF • 8611 Ambassador Row – 100K SF • 9203 Chancellor Row – 95,549 SF • 999 Regal Row – 75,862 SF • 3305 Manor Way – 68,300 SF • 1144-1170 Quaker Street – 68,201 SF • 7600 Ambassador Row – 66,915 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

Absorption

Market Associate hharrison@holtlunsford.com 817.710.7058

vs. Prev. Qtr

vs. 12 Mths Ago

751,257

1,810,386

1,850,710

Vacancy

vs. Prev. Qtr

vs. 12 Mths Ago

11.6%

10.7%

8.2%

Leasing Act.

vs. Prev. Qtr

vs. 12 Mths Ago

3,116,027

2,167,693

3,780,165

U/C SF

vs. Prev. Qtr

vs. 12 Mths Ago

6,073,502

7,487,586

10,544,838

Delivered SF

vs. Prev. Qtr

vs. 12 Mths Ago

1,954,408

2,184,998

2,974,412

TOP LEASE TRANSACTIONS

• IDC Logistics signed a 351,194 SF lease at 2773 Highway 114 with LaSalle Investment Management.

• Quorum International signed a 305,225 SF renewal at 401 Railhead Road with Sun Life.

• Smart Warehousing signed a 154,742 SF lease at Alliance Northport 4 with Hillwood.

• Wal-Greens signed a 98,857 SF lease at Alliance Northport 5 with Hillwood.

• Swepco signed a 50K SF lease at 3401 Quorum Drive with Mercantile Partners.

DEALS IN THE MARKET

VITAL STATS

14.0%

After a solid finish to 4Q 2020, with the North Fort Worth submarket seeing approximately 1.8M SF in positive net absorption, 2021 started out strong with further positive absorption of roughly 2M SF that HLC has tracked. Even with all of the trending absorption, the one statistic that on paper looms as a black eye is the submarkets vacancy rate, once again remaining in the double digits at 11.6%. Breaking this down, one must consider that the submarket has delivered 3M SF in the past six months with approximately 2.1M of that being in 1Q 2021 alone. With another 5M SF currently under construction, expect the vacancy rate to remain in the double digits through most of the year. In the Meacham/Railhead/ Fossil Creek areas of the submarket, shallow-bay product continues to outperform other product types with a vacancy rate of 5% and, surprisingly enough, when compared to historical trends, there has been solid activity from shallow-bay tenants in the Alliance area as well. Looking into the next quarter, expect absorption to remain positive and the vacancy rate to continue to stagnant has the market continues to bring speculative developments online.

4,850,000 4,350,000

12.0%

• Interstate Crossing – CBRE is selling a 1,023,488 SF e-commerce building

3,850,000 10.0%

3,350,000 2,850,000

8.0%

2,350,000 6.0%

1,850,000 1,350,000

4.0%

850,000 2.0%

350,000

0.0%

(150,000) 1Q 18

2Q 18

3Q 18

Absorption

4Q 18

1Q 19

2Q 19

3Q 19

4Q 19

Deliveries

1Q 20

2Q 20

3Q 20

4Q 20

1Q 21

Vacancy

Source: CoStar 1Q 2021 Industrial Report

NEW DEVELOPMENTS

• Intermodal Commerce Park – a 1.4M SF three (3) building project with Gruene Real Estate Partners • Mecham Commerce Center – a 1,311,911 SF four (4) building project that will kick off with a 334,751 SF crossdock facility • 114 Logistics Park – a 1,004,400 SF cross-dock building with LPC • 820 ExChange – a 951,316 SF four (4) building project with Creation Equity/Walton Street • North Quarter 35 – a 644,989 SF four (4) building project with M2G Ventures

HLC Deal

• Westside 35 – approximately 500K SF two (2) building front load project with Crow Holdings Industrial • Midway Logistics Park – a 491K SF three (3) building project with Stream Realty Partners • Lone Star Commerce Center – a 380K SF three (3) building project with Forefront Commercial • Champions Circle Business Park – a 361,040 SF three (3) building project with Hopewell • Basswood 35 – a 237,390 SFD SF two (2) building project with EastGroup.

• Air Commerce Logistics Center – a 114,400 SF project with Holt Lunsford Commercial Investments.

LARGE EXISTING VACANCIES • • • • • • •

Alliance Center North 7 – 810,908 SF Speedway Logistics Crossing – 795,780 SF Northlink A – 754,473 SF Elizabeth Creek Gateway | Building D – 702K SF Synergy Crossing – 708,047 SF Westport Parkway Logistics Center – 677,160 SF Mark IV Commerce Park | Building 1 – 581K SF

17

SUBMARKET INTELLIGENCE SOUTH FORT WORTH

HLC OUTLOOK The South Fort Worth industrial submarket posted a 1Q 2021 vacancy of 7.0%, a figure up from 6.5% in 4Q 2020. This increased vacancy stems from the delivery of Black Creek Group’s 569K SF three (3) building project. We expect to see this vacancy figure stagnate through the next quarter with absorption matching new deliveries. New product expected to deliver in 2Q 2021 includes several new construction projects, such as Majestic’s 489,150 SF two (2) building second phase at its Fort Worth South Business Park and Industrial Realty Group’s 212,175 SF building at the northwest corner of I-35 and I-20.

MATT CARTHEY

South Fort Worth will see a sizable second wave of speculative development that will be delivered in the second half of 2021.

These projects include Jackson Shaw’s three (3) building 562,670 SF spec development, 46 Ranch Logistics Park; Bandera Ventures two (2) building 954,960 SF development; Ascendant Commercial’s 858,420 SF crossdock; VanTrust’s 670,914 SF crossdock; Clarion & Crow Holdings Capital’s first two (2) buildings in Carter Park East topping out at 874,300 SF; and IDI’s two (2) building 374,874 SF shallow bay project. All of these developments are already moving dirt.

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

28,732

(575,277)

842,810

Vacancy

vs. Prev. Qtr

vs. 12 Mths Ago

7.0%

6.5%

4.0%

Leasing Act.

vs. Prev. Qtr

vs. 12 Mths Ago

867,372

588,388

U/C SF

vs. Prev. Qtr

vs. 12 Mths Ago

5,584,906

3,113,406

2,160,598

Delivered SF

vs. Prev. Qtr

vs. 12 Mths Ago

649,881

HLC Deal

DEALS IN THE MARKET

173,603

VITAL STATS

8.0%

• Rhino Health has signed a 400,857 SF lease at Fort Worth South Business Park with Majestic Realty.

• Oatley has signed a 313,753 SF lease in 7550 Will Rogers with CIM. • Rev 1 has signed a 133,281 SF lease in 1851 Joel East with PGIM. • Jess Hall’s Serendipity has signed a 40,625 SF lease at 2951 Suffolk Drive with Birtcher Anderson & Davis Partners.

HLC Deal

843,093

-

TOP LEASE TRANSACTIONS

1,250,000

• 3131 W Bolt Street – a 136,570 SF building • 5703 Crawford Lane – a 74K SF building • 1213 Antler Drive – 73,651 SF building

1,050,000

7.0%

850,000 6.0% 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 1Q 18

2Q 18

3Q 18

4Q 18

Absorption

1Q 19

2Q 19

3Q 19

4Q 19

Deliveries

1Q 20

2Q 20

3Q 20

4Q 20

1Q 21

Vacancy

Source: CoStar 1Q 2021 Industrial Report

18

NEW DEVELOPMENTS • South Fort Worth Logistics Center – a 954,960 SF two (2) building project with Bandera Ventures • Carter Park East – the first phase of the master planned park, which includes two (2) buildings totalling 874,300 SF with Clarion & Crow Holdings Capital.

• Fort Worth 1-35 Logistics Center | Building 3 – a 858,420 SF development by Ascendant Commercial • Fort Worth Logistics Hub | Building 1 – a 670,914 SF crossdock developed by VanTrust • 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 Commerce Center – a two (2) building 374,874 SF shallow bay project with IDI Logistics • AMZL Build-To-Suit – A 200K SF BTS for Amazon developed by Hillwood • Granite Village Creek – a 605,489 SF cross-dock with Forefront Development

HLC Deal

LARGE EXISTING VACANCIES • • • • • • • • •

1501 Joel East Road – 391,985 SF 1101 Everman Parkway – 301,995 SF 1701 Joel East Road – 293,705 SF 6601 Oak Grove Road – 264,125 SF 7100 Oak Grove Road – 250,487 SF 6440 Oak Grove Road – 245K SF 7300 Oak Grove Road – 231,333 SF 1901 Joel East Road – 186,577 SF 7550 Oak Grove Road – 184,722 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