First Quarter 2014 - Holt Lunsford Commercial

First Quarter 2014
First Quarter 2014
Table of Contents
1. Submarkets and Professionals
2. Overall DFW Industrial Market
A. Dallas / Fort Worth Overall Industrial Market Overview
B. Facts and Figures
3. Submarket Intelligence
A. Great Southwest / Arlington
B. DFW Airport
C. Northeast Dallas
D. South Dallas
E. Northwest Dallas
F. North Fort Worth
G. South Fort Worth
5055 Keller Springs, Suite 300 • Addison, Texas 75001 • 972.241.8300 • holtlunsford.com
First Quarter 2014
HLC Dallas / Fort Worth Industrial Professionals
Jim Brice
Matt Carthey
John Gorman
Donnie Rohde
Canon Shoults
J. Scott Moore
Joshua Barnes
Andrew Gilbert
Cullen Donohue
Victoria Johnson
Partner
Principal
[email protected] [email protected]
Partner
[email protected]
Market Director
[email protected]
Market Director
[email protected]
Market Associate
[email protected]
Market Director
[email protected]
Market Analyst
[email protected]
Market Director
[email protected]
Marketing Coordinator
[email protected]
HLC Leased and/or Managed Industrial Product by Submarket
5055 Keller Springs, Suite 300 • Addison, Texas 75001 • 972.241.8300 • holtlunsford.com
First Quarter 2014
Trends And Transactions
• Tenants have gained confidence and lease terms are
extending.
• Expect more speculative development to take place in
2014.
• Rent concessions are minimal, but TI’s remain high.
• Demand remains strong and developers are responding
to the lack of new supply.
Top Lease Transactions
• Georgia Pacific
• Williams Sonoma
• JC Penny
• NFI • Keller Warehousing
1,500,000 SF South Dallas
821,502 SF
GSW
433,000 SF South Dallas
261,984 SF
NE Dallas
156,200 SF
GSW
Top HLC Lease Transactions
• 4 Wheel Parts
114,000 SF
• Light Gauge Solutions
112,039 SF
• MSC Barnes
103,085 SF
As 2013 came to an end and 2014 began, vacancy rates
continue to produce numbers at an all-time low. The
confidence in landlords is rising which has allowed them
to continue to raise asking rates and lower concessions
in 2014. Don’t expect the market to slow down as Dallas
remains as one of the top regional distribution hubs in the
country.
Notable Deals in the Market
Currently there are approximately 11 potential deals of
300,000 SF or more in the marketplace. This represents
approximately 5.3 million SF of potential leasing activity. A
few of those included are:
DFW Airport
GSW
South Dallas
Continuing the strong momentum it gained throughout in
2013, the DFW industrial market continued to prove it is
one of the strongest markets in the country. The industrial
market started off the first quarter of 2014 with an overall
vacancy rate of 7.6% compared to the 8.9% rate at the
beginning of 2013. The DFW vacancy rate has decreased
or remained steady each quarter since quarter three of
2010, which provided a rate of 12.2%. The metroplex
produced another strong quarter of positive net absorption
amounting to a first quarter total of 4,595,729 SF. Leasing
activity in DFW provided a 7,088,524 SF number in the
first quarter.
Construction activity continued its strong pace through the
end of 2013 and into the beginning of 2014. Currently,
there is over 14 million SF under construction, powered by
both build to suits and speculative development in South
Dallas and DFW Airport. Nearly 5 million SF was delivered
in the first quarter throughout the market. Expect more
construction to take place as the DFW market continues
to tighten.
The bulk warehouse sector outperformed the flex and
shallow bay sectors with a positive absorption number
totaling over 4.5 million SF. The flex and shallow bay markets
both produced positive absorption numbers as well, but not
at the pace of the bulk warehouse market. Both the shallow
bay and flex sectors showed a decrease in vacancy rates,
but, due to the heavy amount of construction deliveries,
the bulk warehouse sector showed a minimal increase in
vacancy.
Market Highlights
Absorption
4,595,729
Vacancy
7.6%
Leasing Act.
7,088,524
U/C SF
14,077,540
Delivered SF
4,985,195
vs. Prev. Qtr
7,316,633
vs. Prev. Qtr
7.4%
vs. Prev. Qtr
7,028,841
vs. Prev. Qtr
7,364,301
vs. Prev. Qtr
2,883,254
vs. 12 Mths Ago
1,052,185
vs. 12 Mths Ago
8.9%
vs. 12 Mths Ago
6,154,415
vs. 12 Mths Ago
3,102,239
vs. 12 Mths Ago
380,641
Source: CoStar 2014 1Q Industrial Report
5055 Keller Springs, Suite 300 • Addison, Texas 75001 • 972.241.8300 • holtlunsford.com
First Quarter 2014
Facts & Figures
Vacancy - Overall DFW
Construction - Overall DFW
16,000,000
14,000,000
12,000,000
10,000,000
8,000,000
11.6%
11.4%
7.6%
7.5%
0.3%
2014
0.1%
2014
Source: CoStar 2014 1Q Industrial Report
Source: CoStar 2014 1Q Industrial Report
Absorption - Overall DFW
Overview - Overall DFW
12,000,000
7,000,000
6,000,000
5,000,000
8,000,000
3,000,000
1,000,000
2014
2014
Source: CoStar 2014 1Q Industrial Report
Source: CoStar 2014 1Q Industrial Report
Existing Inv.
Market
# Bldgs. Total RBA
Direct SF
Vacancy
Total SF
YTD Net
YTD
Under Leasing
Vac. % Absorption Deliveries Const. SF Activity
DFW Airport
551
64,088,835
4,570,811
4,743,892
7.4%
197,977
643,154
2,094,702 874,523
East Dallas
567
39,040,026
3,022,666
3,022,666
7.7%
(13,759)
0
0
Great SW/Arlington 1,006
87,846,381
5,787,444
5,862,114
6.7%
1,451,426
1,098,502 1,944,401 1,835,080
North Fort Worth
495
67,423,981
3,299,773
3,299,773
4.9%
1,393,176
0
4,542,894 43,872
Northeast Dallas
1,359
96,537,750
9,190,698
9,477,556
9.8%
690,078
117,261
187,540
Northwest Dallas
1,252
94,231,895
7,397,463
7,613,948
8.1%
1.003,496
529,155
2,836,632 620,947
South Dallas
595
66,654,935
3,586,523
3,787,523
5.7%
1,963,142
2,441,926 2,223,371 500,673
South Fort Worth
1,240
70,183,407
2,717,813
2,717,813
3.9%
110,811
50,000
South Stemmons
2,076
112,712,017
12,484,671 12,515,327
11.1%
(2,200,618) 105,161
Totals
9,141
698,719,227
52,057,862 53,040,621
7.6%
4,595,729
82,931
978,009
0
1,091,042
248,000
1,061,447
4,985,195 14,077,540 7,088,524
Source: CoStar 2014 1Q Industrial Report
5055 Keller Springs, Suite 300 • Addison, Texas 75001 • 972.241.8300 • holtlunsford.com
First Quarter 2014
Submarket intelligence - Great Southwest/Arlington
Provided by Canon Shoults, Market Director
Market Highlights
Absorption
1,451,426
Vacancy
6.7%
Leasing Act.
1,835,080
U/C SF
1,944,401
Delivered SF
1,098,502
vs. Prev. Qtr
2,514,984
vs. Prev. Qtr
7.2%
vs. Prev. Qtr
2,018,617
vs. Prev. Qtr
1,866,604
vs. Prev. Qtr
858,000
Source: CoStar 2014 1Q Industrial Report
vs. 12 Mths Ago
45,120
vs. 12 Mths Ago
9.3%
12 Mths Ago
1,552,886
vs. 12 Mths Ago
858,000
vs. 12 Mths Ago
18,332
HLC Outlook
The Great Southwest industrial submarket continues to be
one of the top performing submarkets in the DFW Metroplex.
Leasing activity and velocity remains strong. The occupancy
rate has reached a near historic high of 93.3%. Additionally,
GSW ranked second among the nine submarkets for yearto-date absorption, posting a strong 1,451,426 SF of positive
net absorption. As 2014 continues, landlords should expect
rental rates to continue to rise as supply decreases and
tenant demand continues to increase in the current economic
climate. Additionally, rental concessions will continue to
decrease. On the development front, GSW is the second
most active submarket for projects under construction.
Exeter Property Group, Weeks Robinson, Crow Holdings,
JP Morgan and Oakmont Industrial Group are all actively
building development projects.
Top Lease Transactions
• Williams Sonoma signed an 821,502 SF lease at 4900
Sherry Lane in Arlington.
• Keller Warehousing signed a 156,200 SF lease at 1211
Avenue T in Grand Prairie.
• Valwood and Centerport Portfolio – A 996,218 SF
industrial portfolio located in the Northwest Dallas and
Great Southwest submarkets. A Class B asset at 92%
leased.
• GSW Gateway 1&2 – A 423,330 SF Industrial
Portfolio located in the Great Southwest submarket.
This is a Class A portfolio that is currently 100% leased.
New Developments
• Weeks Robinson Spec Project– Developing a 667,635
SF spec industrial building in Grand Prairie.
• Oakmont Industrial Group Spec Project – Developing a
520,326 SF spec industrial building in Grand Prairie.
• Crow Holdings – Developing a 419,521 SF Class A spec
industrial building in Grand Prairie.
• JP Morgan – Developing a 602,804 SF Class A spec
project in Grand Prairie.
Large Existing Vacancies
• 730 E Trinity Blvd – 588,364 SF
• 610 W Trinity Blvd – 423,700 SF
• 2401 W Marshall Drive – • 14900 Trinity Blvd – 330,000 SF
310,000 SF
Vital Stats
16.0%
1,500,000
• Advanced Integration Technology signed a 56,000 SF
lease at 901 Avenue S.
• Light Gauge Solutions signed a 55,632 SF lease at 1100
Eden Road in Arlington.
500,000
• LMT Rustic signed a 51,000 SF lease at 2920 N State
Highway 360.
Deals In The Market
• Dallas Core Industrial – 1,546,638 SF Industrial Portfolio
located in Great Southwest, DFW Airport, Northwest Dallas
and East Dallas submarkets. Class A asset at 97.8%
leased.
(500,000)
2014
Source: CoStar 2014 1Q Industrial Report
5055 Keller Springs, Suite 300 • Addison, Texas 75001 • 972.241.8300 • holtlunsford.com
(1,000,000)
First Quarter 2014
Submarket intelligence - DFW Airport
Provided by Jim Brice, Partner
Market Highlights
Absorption
197,977
Vacancy
7.4%
Leasing Act.
874,523
U/C SF
2,094,702
Delivered SF
643,154
vs. Prev. Qtr
1,812,783
vs. Prev. Qtr
6.8%
vs. Prev. Qtr
1,530,541
vs. Prev. Qtr
2,259,724
vs. Prev. Qtr
500,524
vs. 12 Mths Ago
(25,189)
vs. 12 Mths Ago
9.7%
vs. 12 Mths Ago
1,135,232
vs. 12 Mths Ago
1,514,615
vs. 12 Mths Ago
0
New Developments
HLC
• Coppell Trade Center – 279,330 SF Class A industrial
building located in Coppell. This building is owned by
LaSalle Investment Management and will be leased
by Holt Lunsford Commercial.
• Perot Development is developing a 1,052,380 SF
Class A industrial building on Bethel Road.
• IIT is developing a 300,800 SF Class A Industrial
building on Northpoint Drive in Coppell. This space is
preleased to American Building Supply.
Source: CoStar 2014 1Q Industrial Report
• Prologis is developing a 144,270 SF Class A Industrial
building on Gateway Blvd in Coppell.
HLC Outlook
• Thackery/Bandera is developing two Class A Industrial
buildings measuring 143,320 SF and 120,070 SF on
Mustang Drive.
The DFW Airport market has continued to show growth
throughout the beginning of 2014. With a net absorption of
3,306,094 SF in 2013, the market has carried this momentum
through the first quarter of 2014 posting a total net absorption
of 197,977 SF. The airport has also remained a hotbed of
construction delivering three buildings totaling 643,154 SF in
2014 and another 2,094,702 SF currently under construction.
Occupancy rates slipped slightly in the first quarter, but this
should be of no concern due to the sub 7.5% vacancy rate.
Rental rates have continued to hold strong in early 2014 with
increased land prices and construction costs; speculative
developments have been quoting $3.75 - $4.00 NNN for bulk
warehouses.
Top Lease Transactions
HLC
Deal • 4 Wheel Parts signed a 114,000 SF renewal in Coppell.
Large Existing Vacancies
• 2475 Esters Rd – 500,000 SF
• 1110 Northpoint Dr – 310,000 SF
• 1717 W Airfield Dr –
252,400 SF
• 400 Dividend Dr –
234,000 SF
• 601 S Royal Ln –
228,210 SF
Vital Stats
18.0%
16.0%
1,500,000
• Archway Marketing a 105,981 SF renewal in Coppell.
500,000
• Pilot Freight Services signed a 62,000 SF lease in Irving.
(500,000)
Deals In The Market
• Dallas Core Industrial – 1,546,638 SF Industrial Portfolio
located in GSW, DFW Airport, Northwest Dallas, and East
Dallas submarkets. Class A asset at 97.8% leased.
2014
Source: CoStar 2014 1Q Industrial Report
5055 Keller Springs, Suite 300 • Addison, Texas 75001 • 972.241.8300 • holtlunsford.com
(1,000,000)
First Quarter 2014
Submarket intelligence - Northeast Dallas
Provided by Joshua Barnes, Market Director
Market Highlights
Absorption
690,078
Vacancy
9.8%
Leasing Act.
978,009
U/C SF
187,540
Delivered SF
117,261
vs. Prev. Qtr
613,375
vs. Prev. Qtr
10.4%
vs. Prev. Qtr
796,664
vs. Prev. Qtr
135,261
vs. Prev. Qtr
-
Source: CoStar 2014 4Q Industrial Report
vs. 12 Mths Ago
(53,463)
vs. 12 Mths Ago
11.9%
vs. 12 Mths Ago
737,086
vs. 12 Mths Ago
66,000
vs. 12 Mths Ago
279,223
HLC Outlook
Northeast Dallas experienced its largest quarter of net
absorption since the first quarter of 2008. This is largely due to
the fact that tenant demand is on the rise and no speculative
development is under construction. All sectors (flex, shallow
bay and warehouse) reported positive absorption over 2013
which indicates that the tenant confidence is increasing over
many different business types. The shallow bay sector has
the lowest vacancy rate at 5.4% with the flex sector and
warehouse sectors reporting a 12.9% and 9.6% vacancy rate
respectively. Consequently, concessions continue to contract
and rates have seen slight improvement. We expect for these
trends to continue as there is no speculative development
underway and only a few sites left to develop.
Top Lease Transactions
• NFI renewed their 261,984 SF lease at 2600 McCree
Road in Garland.
• Sub Assembly Group expanded by 57,286 SF at 802
Nicholson Road in Garland.
• McFadden Transport renewed their 51,276 SF lease at
2745 Market Street in Garland.
Deals in the Market
• North Dallas Light Industrial – A 462,618 SF industrial
portfolio located in the Northwest and Northeast Dallas.
Class B asset at 86% leased.
• Plano Business Park – A 213,481 SF industrial portfolio
located in the Northeast Dallas submarket. This is a
Class A portfolio that is currently 100% leased.
• Glenville Business Center – A 135,556 SF flex portfolio
located in the Northeast Dallas submarket. This is a
Class B portolio that is currently 20% leased.
New Developments
• 2800 Telecom Parkway – One Class B industrial
building totaling 169,540 SF under construction in
Richardson. Build to Suit for Advocare International.
• 10601 Clarence Drive – Build to Suit for Cornerstone
Automation Systems in Frisco.
Large Existing Vacancies
• 3000 N Redbud Blvd –
888,096 SF
• 2722 S. Jupiter Road –
419,961 SF
• 2600 McCree Road –
408,463 SF
• 3101 W Miller Road –
293,231 SF
• 1036 S International Dr. –
260,000 SF
Vital Stats
500,000
14.0%
400,000
12.0%
300,000
10.0%
200,000
100,000
8.0%
• Dallas Core Industrial – A 1,546,638 SF industrial portfolio
located in the Northwest Dallas, DFW Airport, Great South
west and East Dallas submarkets. Class A portfolio at 97.8%
leased.
6.0%
• 1201 Big Town Blvd. – A 508,500 SF Class A bulk
industrial facility that is 100% leased.
0.0%
(100,000)
(200,000)
4.0%
(300,000)
2.0%
Source: CoStar 2014 1Q Industrial Report
5055 Keller Springs, Suite 300 • Addison, Texas 75001 • 972.241.8300 • holtlunsford.com
(400,000)
2014
(500,000)
First Quarter 2014
Submarket intelligence - South Dallas
Provided by John Gorman, Principal
Market Highlights
Absorption
1,979,150
Vacancy
6.6%
Leasing Act
861,467
U/C SF
2,223,371
Delivered SF
2,441,962
vs. Prev. Qtr
1,875,714
vs. Prev. Qtr
6.3%
vs. Prev. Qtr
1,542,637
vs. Prev. Qtr
3,265,333
vs. Prev. Qtr
513,975
vs. 12 Mths Ago
843,590
vs. 12 Mths Ago
7.3%
vs. 12 Mths Ago
800,596
vs. 12 Mths Ago
1,158,939
vs. 12 Mths Ago
603,729
Source: CoStar
South Dallas Performance
At the end of the First Quarter 2014, the overall South Dallas
Industrial submarket reported a vacancy rate of 6.6% which is
a 0.6% increase from the 6.0% previously reported at the end
of Third Quarter 2013. There is a new listing being reported
in the First Quarter 2014 which is an anomaly and adversely
affects the baseline of previous reports. The single tenant
property at 9314 W. Jefferson Boulevard currently houses
and supports the manufacturing activities of Vought Aircraft
Industries, Inc. Reportedly 4,777,974 rentable square feet,
the 315-acre parcel contains approximately 171 primary
buildings consisting mainly of industrial steel-frame construction. This complex is nontypical industrial product which
skews the current and historical reporting effort and must be
omitted in our ongoing analysis of South Dallas. Subject to
time of reporting, and apart from this anomaly, South Dallas finished the First Quarter 2014 with negative absorption
of (19,971) SF. Prior to this First Quarter 2014, South Dallas has experienced positive annual absorption for the past
four consecutive years while adding 3.7 million square feet to
the market. The submarket continues to have approximately
2.223 million square feet under construction with a 1.4 million
square foot build to suit for Proctor & Gamble and a speculative development from Prudential/Trammell Crow of 823,371
SF on I-20. In addition, USAA/Seefried has announced intentions to go vertical with a 1,126,320 square foot speculative development on their 157 acres south of Interstate 20 on
Old Hickory. In addition, Hillwood has agreed to terms with
Georgia Pacific for a 1.5 million square foot build to suit on
82 acres east of Interstate 45 south of Interstate 20. Large
build to suits have been and should continue to account for
the majority of the submarkets activity.
South Dallas Outlook
Despite the Georgia Pacific build to suit announcement, the
First Quarter 2014 absorption for South Dallas was static.
Demand in the existing product however remains relatively
strong with depth & size diversity. The slow-but-positive
growth has created single digit vacancy and a friendly environment for rental rates with limited new construction. Rental rates are commonly being secured with annual increases
of 1.5% to 2.5%. South Dallas will continue to produce new
opportunities with land positions along I-20 with proximity to
I-35 and I-45 but, existing infrastructure and amenities will
remain keys to success.
Equity sources remain fortified and show interest in speculative development but, leveraged positions remain in check
at 50% to 60% loan to cost for developers seeking institutional partners. Businesses continue to properly size their
operations with strategic planning, and efficiencies initiated
by the previous economic downturn. As a result, tenants are
addressing needs from this slow-but-positive turnaround.
Top Lease Transactions
• 1000 E Cleveland Road 1,500,000 SF BTS to Georgia
Pacific with Hillwood
•1650 US-67 Hwy 433,000 SF renewal with JC Penny.
Under Construction
• 1500 S Millers Ferry Road 1,400,000 SF for Proctor &
Gamble (1st Q 2014).
• 39324 Interstate – 20,823,371 SF spec with Trammell
Crow/Prudential.
• 501 W Danieldale Road 1,126,320 SF of spec with
USAA/Seefried (Announced).
Large Existing Vacancies
• 201 S Interstate 45 –
• 39324 Interstate 20 –
• 1901 Danieldale Road –
758,922 SF
823,371 SF
653,582 SF
Vital Stats
1,500,000
500,000
(500,000)
2014
Source: CoStar
5055 Keller Springs, Suite 300 • Addison, Texas 75001 • 972.241.8300 • holtlunsford.com
(1.000,000)
First Quarter 2014
Submarket intelligence - Northwest Dallas
Provided by J.Scott Moore, Market Director
Market Highlights
Absorption
1,003,496
Vacancy
8.1%
Leasing Act.
620,947
U/C SF
2,836,632
Delivered SF
529,155
vs. Prev. Qtr
196,983
vs. Prev. Qtr
8.6%
vs. Prev. Qtr
1,236,818
vs. Prev. Qtr
2,624,187
vs. Prev. Qtr
462,779
vs. 12 Mths Ago
1,024,068
vs. 12 Mths Ago
9.3%
vs. 12 Mths Ago
1,229,144
vs. 12 Mths Ago
1,464,343
vs. 12 Mths Ago
-
New Developments
HLC • Crosby Trade Center – Two, under construction,
Deal
Class A industrial buildings totaling 295,776 SFLocated in the Valwood Business Park off Crosby
Road.
• Majestic Airport Center DFW – One, under
construction, Class A industrial building totaling
1,022,146 SF in Lewisville, delivering in July 2014.
• Lakeside I & II – Two, under construction Class A
industrial buildings totaling 583,586 SF delivering in
March 2014 in Flower Mound.
• 1900 Lakeside Parkway – Two, Class A industrial
buildings totaling 554,900 SF delivering August 2014
in Flower Mound.
Source: CoStar 2014 1Q Industrial Report
HLC Outlook
• Lakeside Ridge – Two, Class A industrial buildings
totaling 453,300 SF delivering in October 2014 in
Flower Mound.
The Northwest Dallas submarket was able to maintain
its positive momentum through the New Year into the first
quarter of 2014. Over the past year, Northwest Dallas has
proven to be one of the strongest submarkets in the state
of Texas. An impressive 1,003,496 SF of positive net
absorption in the first quarter alone has pressed the vacancy
rate to a 10-year low of 8.2%. Construction activity has
continued to increase as 2,836,632 SF of industrial space is
currently under construction. Deal flow remained strong for
transactions ranging from 30,000 to 50,000 SF, and has seen
an increase in deals between 50,000 and 300,000 SF. As
the market continues to tighten, expect rates to rise and rent
concessions to diminish. All indicators point to the market
continuing to remain strong and tighten throughout 2014.
• Mercer Business Park – One, Class A industrial
building totaling 340,000 SF delivering in October
2014 in Dallas.
Large Existing Vacancies
Top Lease Transactions
• TriPack signed a 61,300 SF deal at 1228 Crowley Circle.
• Regal hardwoods signed a 50,162 SF deal at 1735 W
Crosby Road.
Deals in the Market
• 1310 Electronics Drive –
828,067 SF
• 2555 S Valley Parkway –
529,155 SF
• 1700 Lakeside Parkway –
462,779 SF
• 1175 N Stemmons Freeway –
434,898 SF
• 2201 - 2221 Luna Road –
205,400 SF
Vital Stats
16.0%
• Dallas Core Industrial Portfolio – A 1,546,638 SF industrial
portfolio located in the Northwest Dallas, DFW Airport,
Great Southwest and East Dallas submarkets. This is a
Class A portfolio that is currently 97.8% leased.
1,500,000
500,000
• Valwood and Centerport Portfolio – A 996,218 SF industrial
portfolio located in the Northwest Dallas and Great
Southwest submarkets. A Class B asset at 92% leased.
• North Dallas Light Industrial Portfolio – A 462,618 SF light
industrial portfolio located in the Northwest and Northeast
Dallas submarkets. This is a Class B portfolio that is
currently 86% leased.
(500,000)
2014
Source: CoStar 2014 1Q Industrial Report
5055 Keller Springs, Suite 300 • Addison, Texas 75001 • 972.241.8300 • holtlunsford.com
(1,000,000)
First Quarter 2014
Submarket intelligence - North Forth Worth
Provided by Donnie Rohde, Market Director
Market Highlights
Absorption
1,393,179
Vacancy
4.9%
Leasing Act.
43,872
U/C SF
4,542,894
Delivered SF
-
vs. Prev. Qtr
(189,387)
vs. Prev. Qtr
7.0%
vs. Prev. Qtr
327,679
vs. Prev. Qtr
3,812,994
vs. Prev. Qtr
-
vs. 12 Mths Ago
(312,682)
vs. 12 Mths Ago
8.7%
vs. 12 Mths Ago
112,042
vs. 12 Mths Ago
1,100,000
vs. 12 Mths Ago
53,924
Source: CoStar 2014 1Q Industrial Report
HLC Outlook
The North Fort Worth Industrial submarket continues to be
one of the top performing submarkets in the DFW Metroplex.
Leasing activity was down considerably this past quarter.
However, overall absorption shows strong gains as tenants
who signed leases last quarter such as Cargill, Carolina
Beverage and Exel Logistics have now moved into their
space. Net absorption for the quarter was slightly under
1.4 million SF which dropped the North FTW vacancy rate
to 4.9% ranking it second among the nine DFW submarkets
with lowest vacancy.
Looking forward through 2014, landlords should expect
rental rates to continue rising while tenants have limited
options for relocation. However, between now and end of
the year there is another 3.5 million SF of product expected
to deliver making the bulk market more competitive in the
landlord arena.
• Hillwood plans to deliver Alliance Center North 2,
1,002,620 SF speculative warehouse 3rd quarter of
this year with Alliance Gateway 57, 310,000 SF
delivering later in the year.
• IDI in progress with 729,900 SF on Three Wide Drive,
just west of Texas Motor Speedway.
Deals in the Market
• 860 Westport Pkwy., Haslet, TX; located in the NE
Tarrant/Alliance submarket – 422,373 SF occupied by
Michaels Stores Distribution Center.
Large Existing Vacancies
• 5555 N Beach St –
HVAC warehouse and production space
+/- 250,000 SF
• 300 Gateway Pkwy –
603,050 SF
• 15001 Heritage Pkwy, Building D –
548,495 SF
• 4601 Gold Spike Dr., Meacham Crossing – 502,320 SF
• 13700 Independence Pkwy, –
499,797 SF
• 501 Henrietta Creek Rd, –
450,000 SF
• 4801 Westport Pkwy, Alliance –
400,000 SF
• 776 Henrietta Creek Rd,–
360,000 SF
• 3400 Northern Cross Blvd – 102,500 SF
Top Lease Transactions
• A&R Transport leased 154,440 SF from Weeks Robinson in
the Railhead Industrial Park.
Vital Stats
14.0%
New Developments
12.0%
1,500,000
• Mercantile Partners plans to build 180,000 SF at the
corner of Beach St. and Northern Cross in Fort Worth.
• Trammell Crow is moving toward 4th quarter completion
of their two buildings located at the NW Corner of I-35W
and Eagle Parkway, plans include two speculative
industrial buildings, Building B comprising 1,041,879 SF
and Building D comprising 548,495 SF, totaling
1,590,374 SF.
500,000
(500,000)
2014
Source: CoStar 2014 1Q Industrial Report
5055 Keller Springs, Suite 300 • Addison, Texas 75001 • 972.241.8300 • holtlunsford.com
(1,000,000)
First Quarter 2014
Submarket intelligence - south Forth Worth
Provided by Donnie Rohde, Market Director
Market Highlights
Absorption
110,811
Vacancy
3.9%
Leasing Act.
1,091,042
U/C SF
Delivered SF
50,000
vs. Prev. Qtr
859,341
vs. Prev. Qtr
4.1%
vs. Prev. Qtr
277,644
vs. Prev. Qtr
50,000
vs. Prev. Qtr
-
vs. 12 Mths Ago
426,710
vs. 12 Mths Ago
5.8%
vs. 12 Mths Ago
324,938
vs. 12 Mths Ago
50,000
vs. 12 Mths Ago
-
Source: CoStar 2014 1Q Industrial Report
HLC Outlook
The South Fort Worth Industrial submarket continues to be
the leader among the nine submarkets with its 3.9% overall
industrial vacancy. Leasing activity was up considerable over
the last two quarters due to the Whirlpool deal for 725,709 SF
as well as strong demand from tenants 50,000 SF and under.
Net absorption looked very poor this past quarter and due to
the lack of inventory in the market, no substantial gains will
be expected in absorption for the remainder of 2014 after
Whirlpool’s deal is recorded.
For the remainder of 2014, no speculative construction is
scheduled to take place with only talk of new product coming
on line in Carter Business Park. Lack of any industrial product
in this market will keep this submarket on the bottom of the
list for leasing activity and absorption. Interest from local
tenants should only increase for South Fort Worth as the I35
expansion begins in North Fort Worth and the Chisolm Trail
Toll Road opens up, relieving traffic on I35 south.
Deals In The Market
• Carter Distribution Center – 615,005 SF bulk warehouse
building, 100% leased.
• Riverbend East – 408,966 SF, shallow bay buildings,
99% leased.
• 851-6909 Snowden Road – Two bulk warehouse
buildings totaling 281,200 SF, 100% leased.
Large Existing Vacancies
• 1101 Everman Pkwy – 725,709 SF
• 301 E Risinger Rd. –
353,643 SF
• 4720 Esco Dr –
196,256 SF
• 7301 Trinity Blvd –
• 701 N Hampton St –
188,841 SF
• 4601 Carey St –
• 1301 S Forum Way –
176,900 SF
178,342 SF
150,600 SF
Vital Stats
7.0%
1,500,000
5.0%
500,000
Top Lease Transactions
• Whirlpool signed a short term lease for 725,709 SF at 1101
Everman.
3.0%
• EcoLab leased 51,000 SF at 7433-7445 Pebble Drive.
• Rugby Architectural Products leased 39,640 SF at 7500
Baker Blvd.
(500,000)
1.0%
2014
Source: CoStar 2014 1Q Industrial Report
5055 Keller Springs, Suite 300 • Addison, Texas 75001 • 972.241.8300 • holtlunsford.com
(1,000,000)