Dallas’ Big Box market continues to show strong activity, with just under 4.2 million square feet of absorption in Q1 2017. The South Dallas submarket led the market with 1.35 million square feet of absorption, and DFW Airport absorbed 920,000 square feet.
Big Box vacancy was up 0.3% from Q4 2016, and increased 0.8% year-over-year. Vacancy has been highly volitile due to the prevalence of spec construction of 750,000+ square foot warehouses.
Net absorption kept pace with deliveries for the past several quarters. In Q1 2017, net absorption exceeded new supply by 800,000 square feet. For all of 2016, net absorption only lagged behind supply by 446,000 square feet. Developers will continue to build speculative product in response to this trend.
Asking rental rates increased from an average of $3.61 in Q4 2016 to $3.75 in Q1 2017. Expect rates to continue to increase, as developers cover rising construction costs for new product.
Dallas’ Big Box Market Continues to Show Strong Activity