3Q 2021 DFW Industrial Market Brief

Page 1

Market Brief...

Dallas/Fort Worth

INDUSTRIAL

3Q2021 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 7,194,737 SF

JUSTIN

BOYD

ALLEN

THE COLONY

FAR NORTHEAST DALLAS 5,020,352 SF PLANO

LEWISVILLE FLOWER MOUND

HLC SUBMARKET COVERAGE

ROANOKE

COPPELL

ADDISON

GRAPEVINE

RICHARDSON

DFW ALEDO

CARROLLTON

HASLET

NORTH FORT WORTH 5,665,929 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

HURST

NORTHEAST/EAST DALLAS 7,185,360 SF

IRVING

EULESS

DALLAS

SOUTH STEMMONS 2,563,484 SF

SUNNYVALE MESQUITE

FORT WORTH

GREAT SW/ARLINGTON 3,448,035 SF ARLINGTON

DALLAS EXECUTIVE AIRPORT

GRAND PRAIRIE

BENBROOK

DUNCANVILLE

LANCASTER

SOUTH FORT WORTH 7,678,661 SF DESOTO CEDAR HILL

RENDON

SOUTH DALLAS 5,620,902 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

THOMAS GRAFTON

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

Market Director tgrafton@holtlunsford.com 817.632.6152

MADDY CANTY

HOGAN HARRISON

KEATON BRICE

BLAKE TROIANI

WILLIAM WILSON

MITCH CANTWELL

WALKER FLOYD

TREY GOODSPEED

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 Associate btroiani@holtlunsford.com 972.265.0126

Market Associate wwilson@holtlunsford.com 817.284.5555

Market Analyst mcantwell@holtlunsford.com 972.265.0133

Market Analyst wfloyd@holtlunsford.com 972.265.0141

Market Analyst tgoodspeed@holtlunsford.com 817.632.6155

7


HLC DFW

HLC OUTLOOK Absorption

vs. Prev. Qtr

9,839,899

11,619,170

4,060,721

Vacancy

vs. Prev. Qtr

vs. 12 Mths Ago

5.7%

6.5%

7.2%

Leasing Act.

vs. Prev. Qtr

vs. 12 Mths Ago

16,354,786

23,261,074

16,968,878

U/C SF

vs. Prev. Qtr

vs. 12 Mths Ago

34,590,907

27,469,820

26,760,946

Delivered SF

vs. Prev. Qtr

vs. 12 Mths Ago

3,037,461

7,033,044

5,345,427

With no slow down in sight, the Dallas-Fort Worth industrial market continues to perform at record-setting levels. Fueled by the loosening of COVID restrictions and increased vaccinations, the demand for industrial space has been at an all time high, thus allowing rents to climb at an unprecedented pace. The DFW Industrial market built upon a strong mid-year report to set a new high watermark with 32M SF of net positive absorption. With 4Q 2021 still remaining, this represents a new record and surpasses the previous year-end annual absorption by more than 7M SF. We project 2021 year-end net positive absorption to eclipse 40M SF and shatter the previous yearend absorption record of 25M SF. Significant leasing activity in DFW Airport, North Fort Worth and South Dallas have led the charge to allow the overall market vacancy to remain stable at a healthy +/- 5.7% . At the end of 3Q 2021, absorption outpaced supply even with the delivery of 17.3M SF of new space. The development landscape is at a historic pace with 34.6M 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 4Q 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.

8

INDUSTRIAL TRENDS & TRANSACTIONS

vs. 12 Mths Ago

MARKET TRENDS

• The continued expansion of E-Commerce fuels the increased demand for industrial space. • The DFW Industrial market as a whole has returned to pre-COVID-19 normalcy. • The increase in tenant demand coupled with the influx of new capital has caused developers to scour the market for new land positions now stretching to new markets like Forney and Denton. • Industrial development continues at a historic pace to match the demand caused by global supply chain constraints.

TOP LEASE TRANSACTIONS

• Home Goods has signed a 1,033,750 SF lease at 75007601 Oak Grove Road with Clarion and Crow Holding Capital. • Woods Distribution signed a 707K SF lease at Synergy Crossing with TCRG. • NFI renewed its lease of 653,582 SF from CalSTRs at 1901 Danieldale Road south of I-20. • Thread Up leased 595,148 SF from IDI at SEC of I-20 and I-35E. • JIT Packaging leased 594K SF from Principal at 4040 Pipestone Road off I-30.

HLC Deal

TRENDS Need For Speed • More spec offices Desire For Flexibility • Requested expansion options and/or phased in occupancy Drive To Increase Efficiency • Increase 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) TI Requests And Costs Continue To Increase Pre-Leasing Activity Remains Strong

• CTDI signed a 403,465 SF lease at Elizabeth Creek Gateway - E with LBA Realty. • LoLoi Rugs leased 403,200 SF from Nuveen at 4130 Port Boulevard off I-45. • Pegatron signed a 390,440 SF lease at Synergy Crossing with TCRG. • Volkswagen signed a 370K SF lease at Intermodal Commerce Park - 2 with Crow Holdings. • Misfits Market has signed a 353,920 SF lease at 2102 Joel East Road with Rob Riner Companies & TPA Realty. • Prairie Industries signed a 335,517 SF lease at Intermodal Commerce Park - 1 with Crow Holdings. • Total Office Solutions signed a 329,358 SF lease at 2201 Chemsearch Boulevard with CT Realty.


HLC DFW FACTS & FIGURES

OVERALL DFW 8.0%

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%

Market

Existing Inventory # Bldgs.

Total RBA

Vacancy Direct SF

4,000,000

2.0%

Total SF

Vac. %

DFW Airport

658

87,363,167

4,028,271

4,481,133

5.1%

East Dallas

620

50,272,093

4,652,962

4,676,912

9.3%

Great SW/Arlington

1,123

118,085,497

3,262,808

3,801,720

3.2%

Henderson County

18

1,230,866

29,968

29,968

2.4%

North Fort Worth

769

118,803,831

10,841,871

11,935,616

10.0%

2,000,000

1.0% 0.0%

0 3Q 18

4Q 18

1Q 19

2Q 19

3Q 19

4Q 19

1Q 20

Absorption

2Q 20

3Q 20

4Q 20

1Q 21

Deliveries

2Q 21

3Q 21

Vacancy

VACANCY - OVERALL DFW 10.0% 9.0% 8.0% 6.8%

7.0% 5.7%

Northeast Dallas

1,557

118,106,869

6,012,106

6,298,668

5.3%

Northwest Dallas

1,393

115,152,866

4,182,828

4,683,288

4.1%

31

2,397,311

100,500

100,500

4.2%

702

106,888,249

4,167,490

4,625,951

4.3%

South Fort Worth

1,473

87,101,161

6,261,479

6,446,079

7.4%

South Stemmons

2,079

117,054,828

5,456,340

5,713,794

4.9%

Totals

10,423

922,456,738

48,996,623

52,793,629

5.7%

NW Dallas Outlying South Dallas

6.0%

6.3%

5.0%

5.3%

4.0% 3.0% 2.0% 0.3%

1.0%

0.4%

0.0% 3Q 18

4Q 18

1Q 19

2Q 19

3Q 19

4Q 19

1Q 20

Direct

2Q 20

3Q 20

4Q 20

1Q 21

Sublet

2Q 21

3Q 21

Total

ABSORPTION - OVERALL DFW 25,000,000

20,000,000

YTD Net Absorption

YTD Deliveries

Under Construction SF

YTD Leasing Activity

DFW Airport

5,212,232

1,908,484

1,665,918

5,547,572

East Dallas

2,329,003

1,860,762

1,568,320

1,522,895

Great SW/Arlington

3,619,610

253,033

805,591

7,140,601

Henderson County

0

0

0

0

North Fort Worth

6,356,423

6,181,578

5,871,974

9,074,428

Northeast Dallas

3,910,237

2,494,723

2,305,208

5,396,832

Northwest Dallas

2,965,036

1,362,979

2,414,214

5,847,517

12,484

0

0

63,693

5,114,345

1,173,080

14,615,500

6,313,223

735,703

1,380,237

4,843,512

6,509,704

Market

NW Dallas Outlying South Dallas South Fort Worth

15,000,000

10,000,000

5,000,000

0 3Q 18

4Q 18

1Q 19

2Q 19

3Q 19

4Q 19

1Q 20

2Q 20

Total Net

3Q 20

4Q 20

1Q 21

2Q 21

3Q 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 5,000,000 0

South Stemmons

1,771,038

661,770

500,670

7,151,983

Totals

32,026,111

17,276,646

34,590,907

54,568,448 Source: CoStar 3Q 2021 Industrial Report

3Q 18

4Q 18

1Q 19

2Q 19

3Q 19

4Q 19

Delivered Inventory

1Q 20

2Q 20

3Q 20

4Q 20

1Q 21

2Q 21

3Q 21

Under Construction

9


SUBMARKET INTELLIGENCE GREAT SOUTHWEST/ARLINGTON

HLC OUTLOOK

CANON SHOULTS

The Great Southwest (GSW) industrial submarket concluded 3Q 2021 with continued momentum and strength. At 3Q 2021, GSW reported overall positive absorption of 3,619,610 SF with 7.1M SF of leasing activity. GSW reported 253,033 SF of new construction completions, and new construction remains minimal when compared to other submarkets with 805,591 SF of new projects under construction. The 3Q 2021 vacancy rate decreased to a record low of 3.2% versus 3.6% at 2Q 2021. This ranks GSW at the top of the major submarkets with the lowest vacancy rate. As we continue into the final quarter of 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 with limited opportunity for additional development.

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

700,156

2,261,730

512,750

Vacancy

vs. Prev. Qtr

vs. 12 Mths Ago

3.2%

3.6%

5.8%

Leasing Act.

vs. Prev. Qtr

vs. 12 Mths Ago

1,980,157

3,494,390

1,557,675

U/C SF

vs. Prev. Qtr

vs. 12 Mths Ago

805,591

875,931

874,391

Delivered SF

vs. Prev. Qtr

vs. 12 Mths Ago

253,033

-

TOP LEASE TRANSACTIONS • Shorr Packaging signed a 221,335 SF lease at 975 W Oakdale Road with Crow Holdings Industrial.

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

• Pro Pac signed a 176,670 SF lease at 2590 W Warrior Trail with USAA / Ironwood Realty Partners.

• 804 W Shady Grove Road – a 203,430 SF spec development with Landmark Companies

• PGL signed a 162K SF lease at 3010 Red Hawk Drive with Morgan Stanley.

• 2900 Mayfield Road – a 182,693 SF spec development with Clarion

• Walbox signed a 129,450 SF lease at 2240 Forum Drive with Johnson Development.

• Warrior Trail Crossing | 2590 W Warrior Trail – a 176,670 SF spec development with USAA Real Estate (Leased to Pro Pac)

• Tredit Tire signed a 108,400 SF lease at 3900 New York Avenue with Brookfield.

HLC Deal

-

VITAL STATS 7.0%

3,100,000

6.0% 2,100,000

5.0% 4.0%

1,100,000 3.0% 2.0%

100,000

DEALS IN THE MARKET • Prime Portfolio – Humphreys Capital sold a multi-market portfolio with 137,068 SF in the GSW/Arlington submarket to Taurus • National High Growth Logistics Portfolio – KKR sold a multi-market 15M SF portfolio with six (6) buildings in the GSW market to Oxford

1.0% 0.0%

(900,000) 3Q 18

4Q 18

1Q 19

Absorption

2Q 19

3Q 19

4Q 19

1Q 20

2Q 20

Deliveries

3Q 20

4Q 20

1Q 21

2Q 21

3Q 21

Vacancy

Source: CoStar 3Q 2021 Industrial Report

10

NEW DEVELOPMENTS • Remington I-30 – a 244,920 SF spec development with Graff Interests • 975 W Oakdale Road – a 221,335 SF spec development with Crow Holdings Industrial (leased to Shorr Packaging)

• 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

LARGE EXISTING VACANCIES • 3450 Roy Orr Boulevard – 507,984 SF • 4949 Amon Carter Boulevard – 211,780 SF • 102 E Interstate 20 – 199,920 SF • 2750 114th Street – 196,012 SF • 3405 Roy Orr Boulevard – 184,283 SF


SUBMARKET INTELLIGENCE DFW AIRPORT

HLC OUTLOOK The Dallas-Fort Worth (DFW) Airport industrial submarket ended 2020 with a 9.2% vacancy rate. The vacancy has seen a big drop due to leasing for big blocks of space in Passport Park and Perot/Invesco’s 161 development which has lowered the vacancy rate down to 5.1% through 3Q 2021.

ANDREW GILBERT

Rental rates remained strong and are expected to continue to grow throughout 2021. The bulk warehouse rental rates are increasing into the mid $5 - $6 rate range depending on building age. In the 50K - 100K SF range for functional shallow bay product, we are seeing rates from $6.00 up to mid $8.00 depending on the finish level. Rental abatements are still prevalent depending on renewal versus new deals and the size of the lease transaction. Tenant improvement costs remained high because of increasing construction costs.

KEATON BRICE

Market Director agilbert@holtlunsford.com 972.280.8312

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

Absorption

vs. Prev. Qtr

vs. 12 Mths Ago

866,526

437,698

1,960,939

Vacancy

vs. Prev. Qtr

vs. 12 Mths Ago

5.1%

6.1%

7.7%

Leasing Act.

vs. Prev. Qtr

vs. 12 Mths Ago

1,002,391

2,543,270

4,052,872

U/C SF

vs. Prev. Qtr

vs. 12 Mths Ago

1,665,918

957,978

4,229,530

Delivered SF

vs. Prev. Qtr

vs. 12 Mths Ago

-

140,056

1,482,593

VITAL STATS 10.0%

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) (1,000,000)

0.0% 3Q 18

4Q 18

1Q 19

Absorption

2Q 19

3Q 19

4Q 19

1Q 20

2Q 20

Deliveries

3Q 20

4Q 20

1Q 21

2Q 21

3Q 21

Vacancy

TOP LEASE TRANSACTIONS • B.I.G Logistics expanded into 223K SF at 1000 N 28th Avenue just north of the Airport. • Communication Test Design, Inc leased 102,782 SF at Majestic’s DFW Airport Park in Lewisville.

DEALS IN THE MARKET • Infill Business Park – Fort Capital is selling their flex portfolio totaling over 500K SF. There are two projects in the portfolio located at the Airport Submarket.

NEW DEVELOPMENTS

• Oakbend – Prologis is currently under construction on its 175K SF development on Oakbend Drive in Lewisville. Expecting delivery in 2Q 2022 • MacArthur Business Park – two (2) shallow bay buildings with frontage on Highway 121 totaling 152K SF. Expecting delivery in 3Q 2022

HLC Deal

LARGE EXISTING VACANCIES • • • • • •

3150 State Highway 161 – 646,190 SF 611 S Royal Lane – 116,980 SF 1555 N Airfield – 113,640 SF 500 Airline Drive – 112,768 SF 600 Freeport Parkway – 105,981 9015 Sterling – 104,239 SF

• Bison Grove Business Park – Hines has broken ground on its four (4) building development at Edmonds and Garden Ridge totaling over 880K SF. Expecting delivery in 1Q 2022 • Exchange Circle – Brookfield is developing two (2) buildings totaling 315,463 SF off Freeport Parkway in Coppell. Expecting delivery in 2Q 2022 • West Vista Ridge Mall Drive – Prologis is under construction on their freestanding 196,987 SF building in Lewisville.

Source: CoStar 3Q 2021 Industrial Report

11


SUBMARKET INTELLIGENCE NORTHEAST/EAST DALLAS

HLC OUTLOOK The Northeast/East Dallas submarket has recorded a historically low vacancy rate of 5.0% at the end of 3Q 2021. Recent deliveries have been leasing up at a steady rate capturing notable companies such as Pepsi, Trane, etc. With undeveloped infill sites becoming more scarce and the historically low vacancy rate, developers are turning their eyes to available land in more outlying markets such as Forney and Terrell, where we are currently tracking over 9.8M SF of spec industrial development in the planning and construction stages. JOSH BARNES

BEN WALLACE

Senior Vice President jbarnes@holtlunsford.com 972.280.8353

Market Director bwallace@holtlunsford.com 972.421.1966

Absorption

vs. Prev. Qtr

vs. 12 Mths Ago

847,595

621,953

196,652

Vacancy

vs. Prev. Qtr

vs. 12 Mths Ago

4.1%

5.0%

5.5%

Leasing Act.

vs. Prev. Qtr

vs. 12 Mths Ago

1,167,248

1,275,543

1,555,785

U/C SF

vs. Prev. Qtr

vs. 12 Mths Ago

2,086,170

1,706,550

1,760,719

Delivered SF

vs. Prev. Qtr

vs. 12 Mths Ago

-

-

487,031

VITAL STATS

TOP LEASE TRANSACTIONS • Pepsi signed a 129,473 SF lease at 1251 Republic Parkway with KKR. • Trane signed a 80,855 SF lease at 5570 S Buckner Boulevard with KKR. • True Velocity signed a 72,423 SF lease at 3150 Marquis Drive with Link Industrial. • Crumbl Cookies signed a 61,360 SF lease at 3200 W Kingsley Road with Duke. • JW Nutritional signed a 52,845 SF lease at 2525 Shiloh with Link Industrial. • 3PL Fulfillment & Prep signed a 39,653 SF lease at 11090 Grader Street with Sealy.

HLC Deal

DEALS IN THE MARKET

9.0% 1,800,000

8.0%

1,550,000

7.0%

1,300,000

6.0%

1,050,000 5.0%

• Alcott Logistics Station – a 903,895 SF two (2) building project with Urban Logistics Realty includes a 310,900 SF rear load BTS and a 592,995 SF speculative cross dock

800,000

4.0%

550,000

3.0%

300,000

2.0%

50,000

1.0%

(200,000)

0.0%

(450,000) 3Q 18

4Q 18

1Q 19

Absorption

2Q 19

3Q 19

4Q 19

1Q 20

2Q 20

Deliveries

3Q 20

4Q 20

1Q 21

2Q 21

3Q 21

Vacancy

Source: CoStar 3Q 2021 Industrial Report

12

NEW DEVELOPMENTS • 11333 CR 212– a 904,495 SF spec development by Stillwater Capital in Forney • 1103 Gateway Boulevard – a 712,900 SF spec development by Hunt Southwest in Forney • Sunnyvale Business Center – a 643,760 SF spec development by Langford Properties in Sunnyvale

• Gateway Boulevard – a 621,874 SF spec cross dock by Van Trust in Forney • East Dallas Logistics Center – a 545,547 SF two (2) building spec project by Dalfen in Mesquite • East Dallas Commerce Center – a 373,322 SF spec development by IDI Logistics in Mesquite • E Scyene Road – a 310,900 SF real load BTS by Jackson Shaw in Mesquite

LARGE EXISTING VACANCIES • • • •

951 S Town East Boulevard – 457,076 SF 5351 Samuell Boulevard – 260,600 SF 1515 Big Town Boulevard – 232,124 SF 3901 Miller – 154,191 SF

COMING SOON • Akron Road – a 1,845,840 SF two (2) building spec cross dock development by Seefried in Forney; 645,840 SF and 1.2M SF • Clements/Highway 80 – a 1,212,076 SF three (3) building project by Exeter in Forney; 529,047 • E Scyene Road – a 592,995 SF spec cross dock by Urban Logistics Realty in Mesquite • 500,063 SF cross dock and 182,966 SF front load • Meadows – a 362K SF two (2) building project by Landmark Companies in Mesquite


SUBMARKET INTELLIGENCE FAR NORTHEAST DALLAS

HLC OUTLOOK Far Northeast Dallas performed extremely well through 3Q 2021, recording nearly 1M SF absorption. Outlying markets such as McKinney & Rockwall continue to be the conversation, as developers are focusing there due to land availability. Leasing activity in interior markets (Richardson, Plano, and Allen) and outlying markets (McKinney, Frisco, and Rockwall) are both extremely strong. McKinney is seeing some of the highest rents across all DFW as there are very few quality second generation spaces to hold rents down. We expect this activity to continue and additional new developments to be announced as available land sites are being strongly pursued. JOSH BARNES

BEN WALLACE

Senior Vice President jbarnes@holtlunsford.com 972.280.8353

Market Director bwallace@holtlunsford.com 972.421.1966

Absorption

vs. Prev. Qtr

vs. 12 Mths Ago

964,790

1,045,402

495,569

Vacancy

vs. Prev. Qtr

vs. 12 Mths Ago

4.4%

5.1%

5.3%

Leasing Act.

vs. Prev. Qtr

vs. 12 Mths Ago

909,941

942,159

1,175,722

U/C SF

vs. Prev. Qtr

vs. 12 Mths Ago

2,408,439

2,555,220

3,514,407

Delivered SF

vs. Prev. Qtr

vs. 12 Mths Ago

451,781

733,151

450,362

1,150,000

7.0%

1,000,000 850,000

6.0%

700,000

5.0%

550,000 4.0% 400,000 3.0%

250,000

2.0%

100,000

1.0%

(50,000) (200,000)

0.0% 1Q 19

Absorption

2Q 19

3Q 19

4Q 19

1Q 20

2Q 20

Deliveries

3Q 20

HLC Deal

HLC Deal

• CORE5 Business Center at Plano – a 67,570 SF building at 1001 Los Rios with Core5

8.0%

4Q 18

• Sonnys Enterprises leased 62,108 SF at 3110 Shiloh with TA Realty. • RV Print Factory leased 51,200 SF at 3701 E Plano Parkway with Prologis. • Southern Star Distributors leased 47,685 SF at 2801 Technology with Mapletree. • Delasco leased 36,850 SF at 4001 E Plano Parkway with Mapletree. • US Jaclean leased 25,227 SF at 1808 10th Street with Link Industrial. • Trillion Technologies signed a 19,413 SF lease at 2901 Technology with Prologis.

HLC Deal

DEALS IN THE MARKET

VITAL STATS

3Q 18

TOP LEASE TRANSACTIONS

4Q 20

1Q 21

2Q 21

3Q 21

Vacancy

Source: CoStar 3Q 2021 Industrial Report

NEW DEVELOPMENTS • Plano Commerce Center | Phase II – a 300K SF three (3) building spec development with Provident Realty • Star Business Park – a 277,700 SF two (2) building spec development with Blue Star

LARGE EXISTING VACANCIES • • • • •

350 Cypress Hill Drive (A) – 301,320 SF 915 Enterprise Boulevard – 195,743 SF 2161 Redbud Boulevard – 193,490 SF 4101 E Plano Parkway – 136,210 SF 3827 N McDonald Street (B) – 129,914 SF

COMING SOON HLC Deal

• Central Circle Logistics Park - a 172,640 SF two (2) building spec development by Stonelake in McKinney • McKinney Airport Commerce Center - a 194,760 SF two (2) building spec development with HLCI in McKinney • Core5 Logistics Center at McKinney | Phase 3 – a 769,500 SF spec development with Core5 Logistics in McKinney • McKinney Airport Trade Center | Phase 1 - a 320,000 SF three (3) building spec development with Greystar in McKinney • McKinney Trade Center | Phase 2 - a 171,400 SF spec development with ML Realty in McKinney • McKinney National | Phase 2 - a 481,158 SF three (3) building spec development with Transwestern Development in McKinney • M-75 Commerce Center - a 304,085 SF spec development with CA in McKinney • Lookout Logistics Center - a 359,169 SF three (3) building spec development with Crow Holdings Industrial

HLC Deal

HLC Deal

13


SUBMARKET INTELLIGENCE NORTHWEST DALLAS

HLC OUTLOOK

ANDREW GILBERT

KEATON BRICE

Market Director agilbert@holtlunsford.com 972.280.8312

Absorption

Through 3Q 2021, the Northwest Dallas industrial submarket has been one of the strongest performing submarkets in DFW. Throughout 2020, the deal velocity slowed down for suites providing space greater than 100K SF, but through three quarters in 2021 that trend has reversed. Large leases have taken place and the demand has been outstanding for all deal sizes. EMLS, Network Wireless Solutions, Corradi USA, Elong International, Zuri Furniture, Compass Group and Red River Distribution all absorbed space greater than 100K SF so far in 2021. The submarket posted a vacancy rate of 4.1% at the end of 3Q 2021 which decreased from 4.6% at the end of 2Q 2021. Longpoint is wrapping up its shallow bay development in Carrollton which is 100% pre-leased and Hunt Southwest is under construction in Denton. New projects will be kicking off construction in Lewisville and Denton and we expect the submarket to continue to produce more strong statistics as we close 2021 and move into 2022.

Market Associate kbrice@holtlunsford.com 972.421.1956

vs. Prev. Qtr

vs. 12 Mths Ago

711,237

1,060,350

425,650

Vacancy

vs. Prev. Qtr

vs. 12 Mths Ago

4.1%

4.7%

5.5%

Leasing Act.

vs. Prev. Qtr

vs. 12 Mths Ago

1,654,236

2,275,422

2,059,197

U/C SF

vs. Prev. Qtr

vs. 12 Mths Ago

2,414,214

1,634,716

1,664,929

Delivered SF

vs. Prev. Qtr

vs. 12 Mths Ago

40,500

275,311

VITAL STATS 6.0% 1,700,000

1,300,000

4.0%

900,000

3.0%

2.0%

500,000

1.0%

100,000

0.0%

(300,000) 3Q 18

4Q 18

1Q 19

Absorption

2Q 19

3Q 19

4Q 19

1Q 20

2Q 20

Deliveries

3Q 20

4Q 20

1Q 21

2Q 21

3Q 21

Vacancy

Source: CoStar 3Q 2021 Industrial Report

14

new development at 600 Tittle Drive in Lewisville.

• Swiss American renewed its 134K SF lease at 2055 Luna in Carrollton with Lincoln.

• Compass Group pre-leased 113K SF at Longpoint’s

new development at George Bush and I-35 in Carrollton. • Western Industries signed a 97,446 SF new lease at 1300 W Crosby in Carrollton with HLCI. • Your Logistics signed a 96,539 SF lease with First Industrial at 2001 Midway in Lewisville. • Premier Packaging signed a 92,720 SF lease at Panattoni’s new construction at 1701 Valley View in Farmers Branch.

HLC Deal

929,413

5.0%

TOP TRANSACTIONS • Zuri Furniture pre-leased 270,626 SF at Billingsley’s

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

in Carrollton, marketed as a redevelopment opportunity and currently under contract • Crosby Valwood Portfolio – four (4) buildings at the Northeast corner of Crosby and Hutton in Valwood totaling 320,493 SF • Dallas Light Industrial Portfolio – Kennington Commercial is selling five projects in NW Dallas totaling 300,437 SF. This deal has been awarded

NEW DEVELOPMENTS • I-35 Convergence – 250,080 SF spec development

with Hunt Southwest in Denton, set for delivery in 4Q 2021 • Live Oak Logistics Park – a three (3) building, 230K SF shallow bay development located off of 121 and being developed by Link. • Point 35/90 – a 176,500 SF spec development in Carrollton with Longpoint Realty Partners, set for delivery in 4Q 2021. This project is currently 100% leased. • Creekview 121 | Buildings 9 and 10 – EastGroup is underway on its next phase with Highway 121 frontage. These two shallow bay buildings are combined to total 145K SF. • Jubilee Lane Development – High Street is kicking off construction on its two (2) building development in Lewisville totaling 175K SF.

LARGE EXISTING VACANCIES • 2001 Midway Road – 123,269 SF • 2523 Golden Bear – 97,927 SF


SUBMARKET INTELLIGENCE SOUTH DALLAS

HLC OUTLOOK

JOHN GORMAN

The overall South Dallas Industrial submarket as surveyed of I-30, I-20, & I-45 is 135M SF and is now 4.3% vacant which is 1.0% lower than reported in 2Q 2021. In accordance with the area surveyed, CoStar is reporting 2,683,263 SF of net absorption for South Dallas in 3Q 2021. South Dallas has 16M SF under construction in the I-30, I-20, & I-45 corridors combined. Of that construction 28.0%, or 4.4M SF, of the new construction is for build-to-suit or design build assignments. The remaining 72.0%, or 11.5M SF, under construction is speculative development. For the past 12 months, the South Dallas submarket of I-30, I-20 and I-45 averaged a single digit vacancy rate of 5.6% which aligned 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 along Interstate 20 and Interstate 45 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

1,812,072

1,403,387

266,466

Vacancy

vs. Prev. Qtr

vs. 12 Mths Ago

4.3%

6.0%

9.2%

Leasing Act.

vs. Prev. Qtr

vs. 12 Mths Ago

1,894,725

3,789,041

2,832,379

U/C SF

vs. Prev. Qtr

vs. 12 Mths Ago

14,615,500

8,174,858

1,499,424

Delivered SF

vs. Prev. Qtr

vs. 12 Mths Ago

0

1,173,080

573,500

TOP LEASE TRANSACTIONS • NFI renewed its lease of 653,582 SF from CalSTRs at 1901 Danieldale Road south of I-20.

• 3001 Midpoint Drive – 1,059,671 SF BTS by

• JIT Packaging leased 594K SF from Principal at

• PointSouth Boulevard 1 – 1,013,833 SF spec

• LoLoi Rugs leased 403,200 SF from Nuveen at 4130

• 3199 Telephone Road – 1,008,140 SF spec

• UPS renewed its lease of 264,413 SF from AEW at

• E Cleveland Road – 800,737 SF spec development

• Acorn Paper leased 174,741 SF from Link Industrial

• 9900 Bonnie View Road – 447,457 SF expansion by

I-20 and I-35E.

HLC Deal

4040 Pipestone Road off I-30. Port Boulevard off I-45.

4495 DFW Turnpike of I-30.

VITAL STATS

at 2301 W Commerce Street off I-30.

3,200,000

12.0%

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) 3Q 18

4Q 18

1Q 19

Absorption

2Q 19

3Q 19

4Q 19

1Q 20

2Q 20

Deliveries

3Q 20

4Q 20

1Q 21

2Q 21

3Q 21

Vacancy

Source: CoStar 3Q 2021 Industrial Report

spec development by Xebec

• Thread Up leased 595,148 SF from IDI at SEC of

HLC Deal

14.0%

NEW DEVELOPMENTS • Southport Parkway | Buildings 1 & 2 – 2,126,880 SF

• Atlantic Packaging leased an additional 107,091 SF

Panattoni for DSV International

development by Majestic Realty development by Van Trust by USAA/Seefried NFI

HLC Deal

from AEW at 3860 La Reunion Parkway off I-30.

DEALS IN THE MARKET • 3001 Midpoint Drive – DSV International is selling its 1,001,455 SF design build

• 220 E Danieldale Road – 385,472 SF (69% leased) by BlackRock (Seller) off Interstate 20

LARGE EXISTING VACANCIES • 1300 E Fulghum Road – 1,039,360 SF spec with Logistics Property Co.

• 2900 West Drive – 603,378 SF spec with Oakmont Industrial Group

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

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

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 2.8M SF of leasing activity, as well as 618,336 SF of positive absorption for 3Q 2021. The submarket posted a 4.9% vacancy rate at the end of 3Q 2021, which is on par with the past couple of quarters. Rental rates and price per SF continue to rise what seems quarterly. 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

618,336

461,166

(578,300)

Vacancy

vs. Prev. Qtr

vs. 12 Mths Ago

4.9%

5.1%

5.6%

Leasing Act.

vs. Prev. Qtr

vs. 12 Mths Ago

2,151,698

1,999,227

U/C SF

vs. Prev. Qtr

vs. 12 Mths Ago

500,670

1,050,440

1,116,102

Delivered SF

vs. Prev. Qtr

vs. 12 Mths Ago

112,000

VITAL STATS 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) 4Q 18

1Q 19

Absorption

2Q 19

3Q 19

4Q 19

1Q 20

2Q 20

Deliveries

3Q 20

4Q 20

1Q 21

2Q 21

3Q 21

Vacancy

Source: CoStar 3Q 2021 Industrial Report

16

NEW DEVELOPMENTS • Core35 Logistics Center – a 180,242 SF, two (2) building project development underway with Crow Holdings

Irving Boulevard with M2G Ventures.

• Emotor Part renewed its 49,280 SF lease at 4910 Sharp Street with AEW. • Data One Systems signed a 49,899 SF lease at 8908 Ambassador Row with M2G Ventures. • DeskMakers LLC signed a 31,545 SF lease at 1110 Inwood with Hines.

HLC Deal

189,752

8.0%

3Q 18

2201 Chemsearch Boulevard with CT Realty.

• Dynasty Distillery signed a 70K SF lease at 3200 HLC Deal

2,880,191

549,770

TOP TRANSACTIONS • Total Office Solutions signed a 329,358 SF lease at

DEALS IN THE MARKET • Loop 12 Central – a 267,560 SF, two (2) building spec development with Jim Hendricks and Harlan Crow

LARGE EXISTING VACANCIES • 8401 Ambassador Row – 219,175 SF • 4001 Irving Boulevard – 130K SF • 3200 Irving Boulevard – 112K SF • 8908 Ambassador Row – 106,399 SF • 8611 Ambassador Row – 100K SF (Sublease) • 811 Regal Row – 97,927 SF


SUBMARKET INTELLIGENCE NORTH FORT WORTH

HLC OUTLOOK

MATT CARTHEY

GEORGE JENNINGS

Partner mcarthey@holtlunsford.com 817.710.1111

Absorption

HOGAN HARRISON

Market Director gjennings@holtlunsford.com 817.632.6151

Market Associate hharrison@holtlunsford.com 817.710.7058

vs. Prev. Qtr

vs. 12 Mths Ago

3,052,569

2,505,936

1,033,231

Vacancy

vs. Prev. Qtr

vs. 12 Mths Ago

10.0%

11.2%

9.9%

Leasing Act.

vs. Prev. Qtr

vs. 12 Mths Ago

2,480,124

3,463,195

869,045

U/C SF

vs. Prev. Qtr

vs. 12 Mths Ago

5,871,974

7,324,530

10,216,054

Delivered SF

vs. Prev. Qtr

vs. 12 Mths Ago

1,907,996

2,257,897

452,627

VITAL STATS

14.0%

6,000,000

12.0%

5,000,000

10.0%

4,000,000

8.0% 3,000,000 6.0% 2,000,000

4.0%

1,000,000

2.0% 0.0%

0 3Q 18

4Q 18

1Q 19

Absorption

2Q 19

3Q 19

4Q 19

1Q 20

2Q 20

Deliveries

3Q 20

4Q 20

1Q 21

2Q 21

3Q 21

Vacancy

Source: CoStar 3Q 2021 Industrial Report

The North Fort Worth submarket continues to be a shining star in greater DFW highlighted by year-to-date net absorption of over 6.3M SF. With an entire quarter remaining to round off the year, the posted net absorption through 3Q 2021 is over 1M SF more than the next closest submarkets (DFW Airport & South Dallas) and is also higher than any full-year absorption posting for all DFW submarkets over the past three years. Although the absorption totals stem primarily from leasing transactions in bulk vacancies, shallow-bay product continues to perform just as well with a total vacancy rate of 2% through three quarters. With year-to-date absorption outpacing deliveries for the first time since the pre-Covid era, expect leasing activity to remain strong through the end of the year as the submarket awaits yet another 5.8M SF of speculative development.

TOP LEASE TRANSACTIONS

• Woods Distribution signed a 707K SF lease at Synergy Crossing with TCRG. • CTDI signed a 403,465 SF lease at Elizabeth Creek Gateway E with LBA Realty. • Pegatron signed a 390,440 SF lease at Synergy Crossing with TCRG. • Volkswagen signed a 370K SF lease at Intermodal Commerce Park - 2 with Crow Holdings. • Prairie Industries signed a 335,517 SF lease at Intermodal Commerce Park - 1 with Crow Holdings. • Mastertronics signed a 227,856 SF lease at 820 Exchange with LGE/Creation • Paper Source Manufacturing purchased a 159,659 SF facility from Nuveen/M2G.

DEALS IN THE MARKET

• Highway 114 Distribution Center – a 568,632 SF building from Provident Realty Advisors • Project Interstellar – a 564,498 SF, two (2) building project as a portion of a larger national portfolio • Mercantile Distribution Center 40 – a 182,500 SF single tenant building HLC Deal • Air Commerce Logistics Center – a 114,400 SF project with Holt Lunsford Commercial Investments

NEW DEVELOPMENTS

• Mecham Commerce Center – a 1,311,911 SF four (4) building project that will kick off with a 334,751 SF cross-dock facility • Alliance Center East 1 – a 1,240,584 SF development with Hillwood • 114 Logistics Park – a 1,004,400 SF development with Logistics Property Company

• Sylvania Crossing @ I-35W – a 947,140 SF two (2) building project with Ironwood • Intermodal Logistics Center 3 – a 705K SF development with Northpoint Development • Highway 114 Distribution Center – a 568,632 SF development with Provident Realty Advisors • Westside 35 – approximately 500K SF two (2) building frontload project with Crow Holdings Industrial • Midway Logistics Park – a 491K SF three (3) building project with Stream Realty Partners • DFW Point 35 – a 485,680 SF two (2) building project with Stonemont • 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 • Port 156 Logistics Center – a 213,581 SF development with KBC/Stonemont • Mark IV Distribution Center – a 122,779 development with CL Realty HLC Deal • Air Commerce Logistics Center – a 114,400 SF development with Holt Lunsford Commercial Investments

LARGE EXISTING VACANCIES • • • • •

Speedway Logistics Crossing – 795,780 SF Northlink A – 754,473 SF Elizabeth Creek Gateway | Building D – 702K SF Westport Parkway Logistics Center – 677,160 SF Mark IV Commerce Park | Building 1 – 581K SF

17


SUBMARKET INTELLIGENCE SOUTH FORT WORTH

HLC OUTLOOK

MATT CARTHEY

The South Fort Worth industrial submarket posted a 3Q 2021 vacancy of 7.4%, a figure down from 7.7% in 2Q 2021. This slight decrease in vacancy stems from the delivery and subsequent leasing of Majestic’s 489,150 SF two (2) building second phase at Fort Worth South Business Park, approximately 39,084 SF positive absorption at Everman Trade Center and HLC leasing 391,985 SF at Carter Distribution FED. The submarkets total SF under construction is at 7,492,280 SF, which only trails the South Dallas submarket. Positive momentum in the submarket continues as it recorded YTD leasing activity of 6,509,704 SF. This activity only trails the South Stemmons and North Fort Worth submarkets. Not included in this absorption is a prelease HLC completed with Dollamur at IDI’s South Fort Worth Commerce totaling 194,318 SF and TCRG’s prelease of 178,880 SF at their Risinger Road South – Building 1 . We expect to see vacancy continue to stagnate through the next quarter with absorption matching new deliveries. South Fort Worth as a whole continues to have solid leasing activity on all second generation and new deliveries.

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

117,645

527,426

(301,776)

Vacancy

vs. Prev. Qtr

vs. 12 Mths Ago

7.4%

7.5%

5.7%

Leasing Act.

vs. Prev. Qtr

vs. 12 Mths Ago

2,213,810

3,279,192

737,903

U/C SF

vs. Prev. Qtr

vs. 12 Mths Ago

4,843,512

4,032,132

1,817,943

Delivered SF

vs. Prev. Qtr

vs. 12 Mths Ago

212,175

1,168,062

1,058,844

VITAL STATS 8.0%

1,750,000

TOP LEASE TRANSACTIONS • Home Goods has signed a 1,033,750 SF lease at 7500-7601 Oak Grove Road with Clarion and Crow Holding Capital. • Misfits Market has signed a 353,920 SF lease at 2102 Joel East Road with Rob Riner Companies & TPA Realty. • Dollamur has signed a 194,318 SF lease at 1053 Everman Parkway with IDI Logistics. • HGR Industries has signed a 184,722 SF lease at 7550 Oak Grove Road with CIM Group, LP.

HLC Deal

DEALS IN THE MARKET • • • • •

2109-2209 S Main Street – a 157,847 SF building 3131 W Bolt Street – a 136,570 SF building 2851 S Riverside Drive – a 102,193 SF building 800 S 6th Avenue – a 75,511 SF building 9001 South Freeway – a 70,269 SF building

7.0% 1,250,000 6.0% 5.0%

750,000

4.0% 250,000

3.0% 2.0%

-250,000 1.0% -750,000

0.0% 2Q 18

3Q 18

4Q 18

1Q 19

Absorption

2Q 19

3Q 19

4Q 19

1Q 20

Deliveries

2Q 20

3Q 20

4Q 20

1Q 21

2Q 21

Vacancy

Source: CoStar 3Q 2021 Industrial Report

18

NEW DEVELOPMENTS • Risinger Park South – a 1,101,060 SF three (3) building project with TCRG Properties • HomeGoods Build-To-Suit – a 1,033,760 SF BTS for HomeGoods developed by Clarion and Crow Holdings Capital • 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 totaling 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 • Granite Village Creek – a 605,489 SF cross-dock with Forefront Development • 46 Ranch Logistics Park – a 562,669 SF three (3) building project with Jackson Shaw • Southland Business Park – a 418,179 SF two (2) building project developed by Majestic Realty • High Point Business Park – a 403,240 SF development by Yukon Ventures • South Fort Worth Commerce Center – a 374,874 SF two (2) building shallow bay project with IDI Logistics • Misfits Market – a 353,970 SF BTS developed by Rob Riner Companies and TPA Realty • AMZL Build-To-Suit – a 200K SF BTS for Amazon developed by Hillwood

HLC Deal

LARGE EXISTING VACANCIES • • • • • •

1101 Everman Parkway – 301,995 SF 1701 Joel East Road – 293,705 SF 6440 Oak Grove Road – 245K SF 7300 Oak Grove Road – 231,333 SF 5500 South Freeway – 213,546 SF 5200 South Freeway – 212,175 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