Warehouse Space in Fort Worth Remains D/FW’s Strongest Sector of the Industrial Market
(November 23, 1999) – After posting robust demand in 1999’s first half, the Dallas/Fort Worth industrial market lost some of its momentum during 3rd quarter. Performances were mixed from one property sector to another. Fort Worth warehouses continued to register strong demand, and healthy absorption occurred in Dallas’s higher finish-out flex buildings. However, net move-outs occurred in Dallas warehouses and Fort Worth flex developments.
Net demand for all types of industrial space across metropolitan Dallas/Fort Worth totaled just over 1 million square feet during the July-September time frame, versus completions reaching 3.7 million square feet. Demand for warehouse space in Fort Worth was impressive at 1.6 million square feet, mainly due to the opening of a new 1.2 million square-foot distribution center for JC Penney in the Alliance Airport area.
“Overall results from the 3rd quarter are somewhat disappointing,” said M/PF Research president Ron Witten, ” but calendar 1999 still is expected to prove to be a very strong year for the Dallas/Fort Worth industrial market. Fort Worth warehouse buildings remain a particular bright spot, demonstrating the increasingly significant role that Alliance Airport plays in D/FW’s industrial marketplace, attracting large industrial space users to northern Tarrant County.”
Dallas/Fort Worth occupancy in warehouse buildings stood at 92.4% as of 3rd quarter 1999, inching down 0.2 points since Fall 1998. Fort Worth occupancy reached 93.3%, topping the Dallas occupancy rate of 92.0%.
In the smaller flex space market, D/FW occupancy for 3rd quarter 1999 registered at 89.2%, down 3.1 points during the past year. Flex occupancy was reported at 89.0% in Dallas and 90.0% in Fort Worth.
Mild rent growth occurred during the past year. Average rates quoted for warehouse space climbed 2.2% in Dallas to $3.66/sq ft and about 1% in Fort Worth to $3.47/sq ft. In the flex sector, average rents escalated 2.3% in Dallas to $7.92/sq ft and 4.4% in Fort Worth to $7.07/sq ft.