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Wednesday, April 29, 2015

Dallas Leads Nation in Industrial Real Estate Construction

By: Greg Langston (Dallas)

Dallas’ nation-leading industrial real estate construction numbers point to a sustained period of growth for the market segment.

According to a report by The Dallas Morning News, DFW’s industrial real estate market is growing faster than anywhere else in the country. There are over 16 million sq-ft of industrial real estate currently under construction in North Dallas--the highest number the region has seen in over a decade. Though analysts expect construction number to remain strong, many expect this construction boom to reach its ceiling over the next several years.

These impressive numbers can be attributed to a variety of factors. First, this construction boom is in large part a response to pent-up demand from the recent economic recession: to contrast, there was only half-a-million sq-ft of industrial space under construction in 2010. Similarly, one must also credit strong overall economic fundamentals in DFW for this marked growth.

However, the rise of e-commerce is playing a significant role as well. According to BisNow, half of all retail purchases are expected to be made online by 2020, which means that large corporations have already begun the shift to e-commerce based businesses. As a result, we’re seeing a lot more large industrial real estate deals for e-commerce use. When this trend is combined with Dallas’ growing status as a major tech hub, it’s easy to see how e-commerce growth could fuel the Dallas industrial market for years to come.

Ultimately, Dallas’ impressive industrial real estate construction figures are the result of many different factors, from pent-up demand, to strong economic fundamentals, to increased interest from major corporations. Regardless, we can expect e-commerce to be the market’s main driving trend in the years to come.

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