Dallas-Fort Worth Ranks #1 for Industrial Building Construction Market

February 7, 2020
Dallas-Fort Worth Ranks #1 for Industrial Building Construction Market

According to a new report, North America's industrial outlook has a very promising future; supply levels are expected to reach 573.4 million square feet (MSF) from 2020 to 2021.

The 2020 North American Industrial Outlook report released by Cushman & Wakefield also detailed the Dallas-Fort Worth, Texas area as the top market for industrial building construction with an estimated 45.1 MSF of absorption in the region alone. The report also indicated the area ranked as the top market for supply with 46.3 MSF of new space opening for deliveries in the next two years. 

California, Georgia, Illinois, and Pennsylvania follow Texas in the report's rankings. 

"Over the next couple years, we expect the North American industrial market to remain one of the leading product types to watch," the report notes. "Cyclical demand is further bolstered by structural forces that continue to increase logistics needs: the sustained growth of e-commerce and the competition to deliver goods to end-users at an accelerated pace. For the entire region, e-commerce spending will continue to increase at multiple times the rate of overall spending: Statista’s Digital Market Outlook calls for nearly 30% growth in North American online sales from 2019 to 2021."

The report goes on to further detail the future impact of e-commerce on industrial markets:

  • Industrial rents are expected to rise 6.8%, reaching a new high of $6.95 per square foot (PSF) by the end of 2021—up from $6.51 PSF in 2019.
  • For the first time in years, new supply outpaced demand, registering 336.3 MSF compared to 262.1 MSF, respectively.
  • For a seventh consecutive year, net absorption in the U.S. will exceed 200 MSF in 2020; this streak will likely extend through 2021.

The report also warns that trade policy remains one of the most fluid factors in future industry outlooks, but the passing of the USMCA and phase-one agreements between the U.S. and China hold promise for future developments.