North Texas' Industrial Building Market Seems Immune to the Pandemic
The spread of coronavirus and millions of job losses have put the real estate market on shaky ground. But one property sector shows no sign of a slowdown, even in the face of the pandemic. If anything, the North Texas industrial building market seems to be gaining ground as demand for consumer products and e-commerce soars in the area.
“I believe industrial market is going to be more insulated from the effects of the pandemic than the other property types,” said Jeff Thornton, regional senior vice president of Duke Realty. “There is clearly evidence that the industrial market continues to move forward. At Duke alone, we have had more than a half million square feet of leases during the pandemic,” said Thornton, whose firm owns multiple Dallas-Fort Worth area industrial properties. Duke Realty just did a major expansion with tech firm Samsung in one of its Coppell warehouse buildings.
Big warehouse and distribution deals have recently been announced all over the area for companies including Ocean Spray, Mars Inc., U.S. Auto Parts Network, ICU Medical and FedEx. The pandemic has increased demand for distribution space for e-commerce companies that deliver products directly to consumers, said Tom Pearson, executive vice president of Colliers International. “Just a 5% increase in e-commerce sales would equate to millions of square feet of new industrial space requirements around the country,” Pearson said.
The D-FW area is already one of the top warehouse leasing markets in the U.S. “We are super bullish on the industrial market,” Pearson said.
So are developers, who are gearing up for more construction. Builders have laid plans for adding millions of square feet of industrial space in the area in southern Dallas County, near DFW International Airport and in North Fort Worth. “There are some projects developers have tapped the brakes on, but many others are moving ahead,” said Al Sorrels, senior vice president of Majestic Realty, which just broke ground on two industrial buildings in Lewisville. Along with e-commerce growth, Sorrels said some consumer products firms are ramping up their storage space after getting caught short of products during the pandemic. “You are going to see businesses stockpile larger inventory,” he said. “Some folks got caught with their pants down.”
Industrial builders will also benefit if some manufacturing lines are brought back to the U.S...
