Chart of the Week – Industrial Demand Remains Strong

Overall, industrial vacancy is still below its historic norm – underscoring the broad strength of our DFW economy.  Even though the construction pipeline is responding to the high demand, the number of mid-sized blocks is down appreciably.  Back in 2010 there were 224 blocks available over 100,000 SF.  Currently that number has almost been halved (see bar chart below).  Interestingly, our office sector tells a similar story over the same period as high demand has set the stage for new construction and rising rents.  In the case of industrial, rents are up roughly 5 percent in the last year – an almost unheard of increase based on our market, historically.

The doughnut chart below also drives this point home.  While the very large spaces (over 500,000 SF) have increased due to new construction, the square footage available for 100K-200K and 200K-500K blocks are markedly reduced – to the tune of 18 million square feet.

We see continued high-demand driving rental rates through 2016, although rents have risen so quickly, we anticipate a plateauing (or slowing) as we move into 2017.

Chart of the Week 12.1.15.jpg

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