SOUTH STEMMONS

Current Events

The outlook for South Stemmons remains positive as we head into 2Q 2023. Per Costar reporting, leasing activity showed positive 1.05M SF, with 5.5% vacancy. This vacancy rate is due in large to some of the bigger box product in the Turnpike area. Rental rates and price per SF continue to rise while landlords continue to capitalize on the submarket’s irreplicable infill location. South Stemmons, historically known as a user-owned market, has become primarily institutionally owned, which in turn has improved a lot of the building offerings for tenants with a lot of capital projects underway. We are still seeing a strong influx of tenants moving further down Irving Boulevard out of the Design District due to the increasing rates. For tenants looking in the market, location has continued to outweigh functionality due to the close proximity to Dallas CBD, the Medical District, and immediate access to thriving Dallas suburbs.

Top Lease Transactions

• Ready Spaces leased 138,716 SF at 11420 Mathis Street with Sealy and Company.

• Raw Materials renewed their lease of 31,232 SF at 2727 W Airport Freeway with Sealy and Company.

• Lawns of Dallas will occupy 30K SF in their 57K SF development at 7 Justice Way.

• Jackson Durham Floral leased 16,350 SF at 1272 Security Drive with Hines.

New Developments

• Core35 Logistics Center IV | Building A – 289,564 SF development with Crow Holdings Industrial

• Core35 Logistics Center IV | Building B – 142,966 SF development with Crow Holdings Industrial

• Trinity Industrial Park | Building B – 42,999 SF development with GTC Real Estate Investments

• Trinity Industrial Park | Building A – 39,774 SF development with GTC Real Estate Investments

Large Existing Vacancies

• 505 N Wildwood Drive – 167,490 SF

• 1011 Regal Row – 101,939 SF

• 2343 Walnut Hill Lane – 69,256 SF

• 134-170 Pittsburg Street – 61K SF

• 2205 E Pioneer Drive – 54,047 SF

• 3202 Manor Way – 52,841 SF

North Fort Worth

Vital Stats

Current Events

Top Lease Transactions

• Undisclosed tenant has signed a 581K SF lease at Mark IV Commerce Park with Dalfen.

• Lumber Liquidators has signed a 457,363 SF lease at Northlink with TA Realty.

• Iron Mountain has signed a 400,299 SF lease at Westport Parkway Logistics Center with CT Realty Investors.

• K Power has signed a 215,600 SF lease at Commerce 35 W with Nuveen.

• Quorum Ceiling Fan signed a 156,205 SF lease at 401 Railhead Road with Bentall GreenOak.

Deals In The Market

• Commerce 35W – a 215,600 SF Class A building

New Developments

• Northlake 35 – a 2,571,480 SF six (6) building project with Clarion

• Alliance Center North – a 1,057,414 SF two (2) building project with Hillwood

• Elizabeth Creek Gateway C – a 1,510,500 SF development with DHL

• Alliance Center East 1 – a 1,240,584 SF development with Hillwood

• Silver Creek Business Park – a 1,108,938 SF development with Majestic Realty

• Intermodal Logistics Center 6 – a 1,008,416 SF development with Northpoint Development

• 114 Logistics Park – a 1,004,400 SF development with Logistics Property Company

• Basswood 35 – a 628,260 SF five (5) building project with Eastgroup Properties

• Fort West – a 531,601 SF three (3) building project with Creation Equity and JP Morgan

• DFW Point 35 – a 485,680 SF two (2) building project with Stonemont

• Westport Parkway Commerce Center – a 400,565 SF development with Molto Properties

• 820 Crossing – a 335,004 SF development with Scannell Properties

• Champion Crossing – a 317K SF development with Greystar

• Mercantile I-35 – a 718,705 SF two (2) building project with MCW Capital, LLC

• Blazing Trail – a 657,562 SF four (4) building project with USAA

• 35 Eagle – a 2,125,159 SF five (5) building project with Clarion

• Westport 25 – a 1,076,459 SF development with Hillwood

• Westside 287 – a 476,576 SF two (2) building project with Crow Holdings

• Speedway 3 – a 683,140 SF three (3) building project with Scannell

• Mercantile Logistics Station – a 816K SF two (2) building project with Velocis

LARGE EXISTING VACANCIES

• Sylvania Crossing @ I-35W | Building 2 – 697,140 SF

• Speedway Logistics Crossing | Building 3 – 384,716 SF

• Elizabeth Creek Gateway | Building D – 286,467 SF

• DFW Point 35 Building 1 – 267,280 SF

• Northmark Commerce Center – 234,478 SF

• DFW Point 35 Building 2 – 218,400 SF

• Northlink | Building C – 211,037 SF

After a record-setting year of absorption in 2022, North Fort Worth continues its run into 2023 with a Q1 posting of another 2.3M SF. This marks the third consecutive quarter of positive absorption above 2M SF and highlights the depth of the submarket. After delivering approximately 2.5M SF of product through Q1, the development pipeline remains robust through the end of the calendar year and into the first couple of quarters of 2024 with approximately 14.5M SF currently under construction. New construction starts have stagnated to a noticeable degree with only a handful of new projects breaking ground thus far in 2023 - namely Velocis with Mercantile Logistics Station and Scannell with Speedway 3. With continued positive net absorption, low vacancy (6.3%), and sustained rental growth, North Fort Worth is once again primed for a stellar year.

Current Events

The South Fort Worth industrial submarket posted a Q1 2023 vacancy of 4.7%, a figure slightly up from the 5.5% recorded in Q4 2022. This drop in vacancy correlates with the ~591k SF of new deliveries and the ~976K SF in absorption that was confirmed this quarter. A statistic which ranks the south Fort Worth submarket fourth in quarterly absorption behind South Dallas, North Fort Worth, and Northwest Dallas in the first quarter, further validating its position as one of the top-performing submarkets in the metroplex. We expect to see the vacancy rate continue to decrease in Q2 2023 with over ~1.1M SF of active deals tracking and no new building deliveries until Q3 and Q4.

Looking forward to the second half of 2023, the South Fort Worth speculative development pipeline is currently slated to deliver over 2.4M SF. However, we anticipate a slowdown in development with only two projects totaling 381K SF announcing 2023 groundbreaks. Specifically, this pipeline consists of the Falcon Development single 237K SF rear-load dubbed “Oak Creek Distribution” and Empire Equities four (4) building 144k SF single tenant grade level concept at Campus Park.