Speculative construction of Industrial Product is heating up in two key submarkets

For those that have spent any amount of time working with industrial real estate in the Dallas/Fort Worth area then you are definitely no stranger to seeing new construction in the Metroplex. The question usually isn’t centered around when we will see new construction rather it is more like how much will we see.  The vast majority of new construction of industrial product has primarily been build-to-suit opportunities over the past few years, however, that has all started to change.  Specifically for two key submarkets. For the Great Southwest Industrial Submarket the turning point occurred once the vacancy rate dipped below 10% in mid-2012. Since that time, demand for sites to develop became hot targets for developers and there is currently +/-2.4 million square feet of speculative construction underway within the submarket.  Among the speculative projects underway are Crow Holdings’ 419,000 SF Regency 1 project, Weeks Robinson’s 665,000 SF Logistics Crossing development, Oakmont’s 520,000 SF DFW Southgate project and the biggest of all…Exeter’s 821,000 SF Arlington Commerce Center. The Great Southwest Industrial Submarket benefits from being located just south of DFW International Airport and has outstanding access to infrastructure such as SH 360, Hwy. 183, SH 161, I-30 and I-20 so it makes sense that developers would look to increase or gain a foothold in this particular submarket. Future developments within the submarket are likely to become harder to find as the amount of land available for commercial industrial development continues to shrink in Great Southwest. Long known as a “hot spot” for industrial users it is no surprise that the other submarket seeing increased speculative construction is the DFW Airport Industrial Submarket.  Consisting of primarily more modern industrial properties and with, of course, great access to DFW International Airport, this submarket continually sees activity. There is currently +/-2.5 million square feet of speculative construction underway within the submarket.  Among the speculative projects currently under construction are Bandera Ventures/Thackery Partners 263,390 SF two building project, Majestic Realty’s 1 million SF Majestic Airport Center DFW building and Perot Development Company’s 1 million SF Logistics Center building.  There are an additional +/- 1.4 million square feet of speculative construction expected to begin in December and/or January as well. Given the dynamics of each submarket and provided there are no glitches in the economy, timing appears to be right for speculative construction and it will be interesting to see how each performs. Michael W. Spain is a Senior Vice President Managing Partner for Bradford Companies in the Great Southwest Division in Arlington and Grand Prairie, Texas. Great Southwest 2006 N. Highway 360, Grand Prairie, TX 75050