Dallas, TX Warehousing Industry

Bustling Dallas, TX in the Nighttime

2018 has been kind to the distribution industry, and Dallas-Fort Worth especially, when it comes to the warehousing sector. For those established in the area, the growth is a positive point of emphasis for future business ventures, and for those seeking a new place to call home, a move to the Lone Star state couldn’t come at a better time.

A CBRE report documenting warehouse growth and modern facilities found Dallas-Fort Worth to be a top target for industrial and logistics activity. CBRE’s analysis of the largest leases, in terms of space occupied are predominantly coming from companies that work in e-commerce and handle distribution for goods purchased online. That means the rising popularity of online shopping and electronic marketing translates directly to larger scale operations, including warehouse spaces, leases, and jobs. Dallas-Fort Worth has long been a location touted for its prime location in the center of all national operations. Retail, corporate, or tech companies have flocked to the Texas city in record numbers for a decade, and with the tides changing in terms of who is opening up new spaces and big-time industry, the warehouse market finds itself a safe haven of security and profit in Dallas-Fort Worth.

So far in 2018, companies here have moved into more than 17 million square feet of additional warehouse space in the United States. Warehouse relocations aren’t cheap, and they happen to come at a time where companies feel confident in their ability to grow and expand their operations. With great investments come great growth, and with the space Dallas-Fort Worth has to offer in expansive facilities with high ceiling heights and, in many cases, modern specifications for automation and rapid movement of massive inventories, companies considering a move or expansion have favored Dallas-Fort Worth heavily so far this year. The area is expected to exceed over 20 million square feet in net occupancy gains for the fourth year in a row with no signs of slowing down.

Due to significant growth in residential development in the Dallas Fort-Worth area, e-commerce and last-mile distribution users are increasingly demanding space in these areas. Consequently, these submarkets are no longer considered just a home for technology-based tenants. Several new projects, either under construction or proposed, are focusing on mid-size to large users, meaning big spaces and operations are required to keep things running smoothly. Therefore, the boom in the warehouse market derives much from a diversification of companies looking to head to the state of Texas, which is healthy for the overall economy and growth of Dallas Fort-Worth as the northern part of the state’s prime spot for professional and distribution development.

The CBRE report specifically noted that the largest leases being signed in 2018 were completed by manufacturers (14 leases), food and beverage providers (11), retailers (seven), technology companies (four) and an “other” catch-all category (eight). This spreads across the spectrum, and in fact proves that as physical space demands rise, location and square footage become more and more crucial; two things that Dallas-Fort Worth can offer unlike any other major city.

The Dallas-Fort Worth airport is a major draw across the country for travel, but also plays a large role in the expansion of the warehouse market. Just this year, an affiliate of industrial developer and investor Prologis Inc. began plans to develop a 401,280-square-foot warehouse and a 429,720 square-foot building on land leased from the airport. They join a number of companies that look at the airport; DFW Airport is currently seeing an development boom with more than two dozen buildings in the works with about 15 million square feet of space alone. With empty warehouse space just under 7% in the Dallas-Fort Worth area, companies looking for space still have plenty of opportunity to reap the rewards of the city’s major expansion into the warehouse market.

With a supply chain arms race well underway and more competitive than ever, the distribution industry finds strength in creating new ways to expand their networks, and the location and momentum of the Dallas-Fort Worth area make it a highly desirable place to set-up, expand, and grow into 2019 and beyond. With more than 19 million square feet of warehouse space being built in the area this past quarter, equivalent of about a dozen downtown Dallas skyscrapers, and much more room to expand, Dallas Fort-Worth looks to continue to lead an impressive boom in the warehouse market.

As the warehousing industry continues to boom, Costa Solutions remains dedicated to helping warehouse managers control for profitability and reduce HR burdens through dedicated managed labor services. If your company is planning on expansion in DFW, we’d love to discuss the role our teams have played in the supply chains major corporations for the last three decades.