DFW Industrial Market Today Is More Competitive With Infill Sites Harder To Find

The Dallas-Fort Worth industrial market is known for being red-hot and flush with enough land to accommodate ongoing spec and build-to-suit development, but at least one of those factors is gradually declining. Commercial real estate experts say DFW’s industrial sector remains highly competitive with growing e-commerce demand forcing businesses to nab warehouse space to compete in the last-mile delivery space. But quality land deals, particularly infill sites, are much harder to come by with everyone on the hunt.

“Everybody is looking for value-add industrial. The question is does it really exist?” LanCarte Commercial founder Sarah LanCarte said while speaking on Bisnow’s DFW Industrial Deep Dive webinar. There are still some quality infill sites primed for redevelopment for smaller-sized deals, LanCarte said. But those deals usually require a high level of creativity and repurposing. She has seen a former Toys R Us location turned into a smaller regional distribution center, and there’s plenty of potential for former large-box mall retail sites to be repurposed into last-mile industrial space, she added. But there are lingering questions about how many adaptive reuse industrial assets will easily convert and pencil out, LanCarte noted. “Are there going to be value-add opportunities turning smaller retailers into flex space? Some are believers, and some are not.”

Peinado Construction Chief Revenue Officer Robert Shelton said he is seeing more redevelopment work associated with infill spaces as the industrial sector remains on overdrive. A mixture of more competition for assets, declining land site availability and harder to develop reuse projects are creating a competitive landscape on the investor and developer side.  “We have been spoiled because we had it easier, and now it’s a little bit harder to find competitive sites,” Transwestern regional partner Denton Walker said. “It comes down to who can execute and no question, it is very competitive.” Adding to that competitive equation is the issue of dealing with cities on entitlements, a process that requires infill industrial developers to be much more aggressive and patient today, Walker said.  Land sites may be declining, but industrial specialists still see an abundance of development activity in the Great Southwest, the South DFW Airport area, South Dallas, parts of McKinney, North Fort Worth and parts of Denton County.  Overall, e-commerce is keeping the market heated even as the coronavirus has cooled other real estate sectors. “You can’t overstate the impact e-commerce has had on the industrial market these past five years and what that impact will be in the next 10 to 20 years,” Black Creek Group Senior Vice President Mace McClatchy said. “We have been very blessed in the industrial sector.”

Biznow. By Kerri Panchuk (2020, September 24). Coronavirus Pandemic Lifts Drones Higher In The Construction Chain Of Command [News post]. Retrieved from https://www.bisnow.com/dallas-ft-worth/news/commercial-real-estate/coronavirus-pandemic-lifts-drones-higher-in-the-construction-space-105676

If you enjoyed this post, follow AngMar Realty on Facebook

© 2020 AngMar Realty, an AngMar Company.