INDUSTRIAL MARKET REPORT Dallas-Fort Worth 1st Quarter 2016
Table of Contents/ Methodology of Tracked Set Xceligent is a leading provider of verified commercial real estate information which assists real estate professionals, appraisers, owners, investors and developers that make strategic decisions to lease, sell, buy and develop commercial properties. Table of Contents and Methodology/Map 2-3 Market Overview 4-5 Statistics by Market 6 Vacancy Rates & Asking Rates 7-8 Leasing & Absorption 9 New Construction 10 Industrial Advisory Board Members 11 Xceligent Team 12 The Dallas-Fort Worth tracked set consists of an inventory of buildings considered to be competitive by the brokerage community. All buildings within the competitive tracked set have been reviewed and verified by members of the Advisory Boards for the market area. Tracked Inventory (Industrial) The total square feet of all single and multi-tenant buildings greater than 20,000 sf, including owner occupied facilities. Large manufacturing facilities, data centers, airplane hangar space, truck terminals/courts and obsolete/remediation properties are excluded. Available SF All of the available leasable space within a building, whether it is occupied or vacant, for direct lease or sublease space. Space can be available but not vacant, for example, if the landlord, or his agent, is marketing space that will be coming available at a future date because a tenant is planning to move. Vacant SF The total of the direct vacant square footage in a building that is being marketed. Net Absorption Note The net change in occupied square feet from quarter to quarter, expressed in square feet. This report reflects Direct Vacancy and Absorption, Sublease space is excluded 2
Industrial Market Map 3
Dallas-Fort Worth Industrial Overview Overview The Dallas/Fort Worth Industrial market ended the first quarter of 2016 with a vacancy rate of 7.4%. The vacancy rate continues to drop every quarter and net absorption totaled over 4 million square feet in first quarter of 2016. The bulk of the absorption for the Dallas/Fort Worth Industrial market was in South Dallas which had just over 1 million square feet of net absorption. The Dallas/Fort Worth Industrial market has minimal space on the market, while clients are readily available and as a result this has driven rates up. The Industrial Market continues to grow and stay competitive with just over 14 million square feet of space under construction. Inventory (SF) Total Available (SF) Total Vacant (SF) Total Vacancy Rate (%) Total Quarterly Net Absorption (SF) YTD Total Net Absorption (SF) 87,343,598 11,677,014 8,789,874 10.1% 661,044 661,044 353,923,721 34,089,002 25,282,662 7.1% 1,366,487 1,366,487 165,488,548 15,196,977 10,916,026 6.6% 2,065,787 2,065,787 606,755,867 60,962,993 44,988,562 7.4% 4,093,318 4,093,318 Inventory (SF) Sum of Direct Available SF Direct Vacant (SF) Direct Vacancy Rate (%) Direct Quarterly Net Absorption (SF) YTD Direct Net Absorption (SF) 87,343,598 11,032,905 8,592,595 9.8% 685,510 685,510 353,923,721 33,032,410 25,031,943 7.1% 1,372,185 1,372,185 165,488,548 13,418,198 10,852,400 6.6% 2,065,787 2,065,787 606,755,867 57,483,513 44,476,938 7.3% 4,123,482 4,123,482 Inventory (SF) Available Sublease (SF) Sublease Vacant (SF) Sublease Vacancy Rate (%) Sublease Quarterly Absorption (SF) YTD Sublease Net Absoprtion (SF) 87,343,598 644,109 197,279 0.2% (24,466) (24,466) 353,923,721 1,056,592 250,719 0.1% (5,698) (5,698) 165,488,548 1,778,779 63,626 0.0% - - 606,755,867 3,479,480 511,624 0.1% (30,164) (30,164) 4
Dallas-Fort Worth Industrial Overview Historical Vacancy Rate & Net Absorption 8,000,000 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000-2015 Q1 2015 Q2 2015 Q3 2015 Q4 2016 Q1 8.5% 8.0% 7.5% 7.0% 6.5% 6.0% 5.5% 5.0% 14.0% 13.0% 12.0% 11.0% 10.0% 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% Historical Vacancy Rates by Use 2015 Q1 2015 Q2 2015 Q3 2015 Q4 2016 Q1 Flex/R&D Warehouse - Distribution Bulk Warehouse 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 - (1,000,000) Historical Net Absorption by Use 2015 Q1 2015 Q2 2015 Q3 2015 Q4 2016 Q1 Flex/R&D Warehouse - Distribution Bulk Warehouse 5
Statistics by Market Sublease Vacant Vacancy Rate # of Bldgs Inventory (SF) Total Vacant (SF) (SF) (%) Total Quarterly Absorption (SF) YTD Total Net Absorption (SF) South Dallas 402 53,056,951 5,458,359-10.3% 1,020,203 1,020,203 Flex/R&D 46 2,405,637 223,103-9.3% -29,567-29,567 Warehouse - Distribution 297 29,054,450 3,326,920-11.5% 226,947 226,947 Bulk Warehouse 59 21,596,864 1,908,336-8.8% 822,823 822,823 Great Southwest 1,328 118,302,402 8,482,019 178,212 7.2% 469,664 469,664 Flex/R&D 184 8,318,663 947,464 30,191 11.4% -114,789-114,789 Warehouse - Distribution 1,064 82,300,323 6,664,973 84,395 8.1% 813,853 813,853 Bulk Warehouse 80 27,683,416 869,582 63,626 3.1% -229,400-229,400 South Fort Worth 377 24,625,304 895,413-3.6% 62,804 62,804 Flex/R&D 54 2,330,242 102,423-4.4% 66,504 66,504 Warehouse - Distribution 319 21,090,836 792,990-3.8% -3,700-3,700 Bulk Warehouse 4 1,204,226 - - 0.0% - - East Dallas 820 69,277,307 4,765,323-6.9% 302,654 302,654 Flex/R&D 158 7,353,597 573,473-7.8% 66,133 66,133 Warehouse - Distribution 629 50,862,259 3,510,954-6.9% 297,456 297,456 Bulk Warehouse 33 11,061,451 680,896-6.2% -60,935-60,935 Lonestar Turnpike 185 20,994,650 582,506-2.8% 759,493 759,493 Flex/R&D 17 1,203,107 268,598-22.3% 10,000 10,000 Warehouse - Distribution 139 8,995,959 119,387-1.3% 75,493 75,493 Bulk Warehouse 29 10,795,584 194,521-1.8% 674,000 674,000 West Fort Worth 84 4,291,512 139,177-3.2% -43,044-43,044 Flex/R&D 3 190,099 - - 0.0% - - Warehouse - Distribution 81 4,101,413 139,177-3.4% -43,044-43,044 North Fort Worth 442 63,566,800 7,871,736 41,526 12.4% 456,382 456,382 Flex/R&D 50 5,570,794 1,366,957 33,126 24.5% - - Warehouse - Distribution 305 25,919,751 2,878,314 8,400 11.1% -82,815-82,815 Bulk Warehouse 87 32,076,255 3,626,465-11.3% 539,197 539,197 South Stemmons 1,232 64,351,694 2,587,509-4.0% -97,552-97,552 Flex/R&D 198 8,922,567 707,558-7.9% 67,321 67,321 Warehouse - Distribution 1,004 48,218,413 1,712,863-3.6% -137,731-137,731 Bulk Warehouse 30 7,210,714 167,088-2.3% -27,142-27,142 DFW Airport 437 58,143,522 5,975,109 21,000 10.3% 7,243 7,243 Flex/R&D 162 10,264,534 884,130-8.6% 103,235 103,235 Warehouse - Distribution 197 22,554,191 3,295,095 21,000 14.6% -69,396-69,396 Bulk Warehouse 78 25,324,797 1,795,884-7.1% -26,596-26,596 North Stemmons 803 61,112,045 3,255,655 170,886 5.3% 789,704 789,704 Flex/R&D 294 14,937,621 1,305,714 33,962 8.7% 352,271 352,271 Warehouse - Distribution 464 34,720,455 1,660,903 136,924 4.8% 63,593 63,593 Bulk Warehouse 45 11,453,969 289,038-2.5% 373,840 373,840 Northeast Dallas 562 39,641,515 2,880,421 100,000 7.3% 323,056 323,056 Flex/R&D 353 21,422,303 2,029,614 100,000 9.5% 61,627 61,627 Warehouse - Distribution 195 14,330,239 561,161-3.9% 261,429 261,429 Bulk Warehouse 14 3,888,973 289,646-7.4% - - Denton/Lewisville 266 29,392,165 2,095,335-7.1% 42,711 42,711 Flex/R&D 71 4,424,434 380,840-8.6% 78,309 78,309 Warehouse - Distribution 162 11,775,432 619,925-5.3% -35,598-35,598 Bulk Warehouse 33 13,192,299 1,094,570-8.3% - - Grand Total 6,938 606,755,867 44,988,562 511,624 7.4% 4,093,318 4,093,318 6
Vacancy Rates & Asking Rates Vacancy Rate % Average Weighted Direct Asking Rate 2015 Q1 2015 Q2 2015 Q3 2015 Q4 2016 Q1 2015 Q1 2015 Q2 2015 Q3 2015 Q4 2016 Q1 South Dallas 10.3% 8.3% 8.3% 9.5% 10.3% $3.50 $3.35 $3.34 $3.34 $3.35 Great Southwest 7.7% 7.7% 7.8% 6.8% 7.2% $4.28 $3.96 $4.02 $4.08 $4.27 South Fort Worth 4.5% 4.2% 4.0% 3.9% 3.6% $3.38 $3.40 $3.35 $3.38 $3.72 East Dallas 7.0% 8.1% 9.0% 7.3% 6.9% $3.99 $4.11 $3.88 $3.72 $3.73 Lonestar Turnpike 7.1% 6.7% 5.6% 5.2% 2.8% $3.44 $3.39 $3.25 $3.30 $3.30 North Fort Worth 11.3% 11.7% 12.9% 11.9% 12.4% $3.78 $3.77 $4.96 $5.03 $5.08 South Stemmons 4.9% 4.1% 3.8% 3.9% 4.0% $5.44 $5.21 $5.53 $6.08 $5.76 DFW Airport 9.8% 10.3% 9.4% 9.7% 10.3% $6.88 $6.32 $6.20 $6.03 $5.99 North Stemmons 7.0% 6.1% 6.4% 6.2% 5.3% $4.77 $4.95 $4.92 $5.17 $5.24 Northeast Dallas 8.4% 8.1% 7.7% 7.7% 7.3% $7.19 $6.98 $9.51 $9.66 $9.57 Denton/Lewisville 9.9% 9.9% 8.9% 7.1% 7.1% $5.80 $5.72 $5.57 $6.27 $6.17 Grand Total 8.1% 7.9% 7.9% 7.4% 7.4% $4.80 $4.65 $4.92 $5.03 $5.27 7
Vacancy Rates & Asking Rates Vacancy Rate by Market 10.3% 12.4% 10.3% 7.2% 3.6% 6.9% 2.8% 3.2% 4.0% 5.3% 7.3% 7.1% Average Weighted Asking Rates by Market $10.07 $3.40 $4.51 $3.72 $3.72 $2.99 $5.57 $5.73 $5.95 $5.27 $7.01 $18.00 $16.00 $14.00 $12.00 $10.00 $8.00 $6.00 $4.00 $2.00 $- Asking Lease Rate Range by Type (NNN) $15.50 $12.00 $8.52 $7.70 $4.18 $4.36 $2.91 $2.25 $2.65 Flex/R&D Warehouse - Distribution Bulk Warehouse 8
Leasing & Absorption Largest Lease Transactions Property Name Mountain Creek Bldg 1 - Crow Holdings SF Occupied or Vacated Tenant Name Market Specific Use 630,000 Niagra Bottling Great Southwest Warehouse - Distribution Turnpike Distribution Center 29 594,000 OHL Lonestar Turnpike Bulk Warehouse Northport 35 Business Center Bldg A 309,357 Westco Aircraft Parts North Fort Worth Bulk Warehouse Trammell Crow @ 35-Eagle Bldg D 391,389 Exel North Fort Worth Bulk Warehouse Point West Industrial VI 263,625 Quaker Sales and Distribution Company DFW Airport Bulk Warehouse Texas Crossing 226,224 Smith System Manufacturing Co Northeast Dallas Warehouse - Distribution Sales Property Name Approximate Sale Price SF Sold Buyer Seller Market Specific Use Lakeview Center II $23,535,000 150,000 TCRG Opportunity II LLC Coppell Associates DFW Airport Flex/ R&D 401 NE 38th St, Fort Worth 4630 Alpha Rd, Farmers Branch 5535 Airport Fw $1,687,500 25,460 $4,187,500 132,000 KW Martin Lumber Co BH Holt 38 LLC North Fort Worth $2,750,000 38,810 E3 MGMT LLC Stone Done Real Estate LLC North Stemmons Qualbe Marketing Group Richard D Knowles & RDK LLC Family Limited Great Southwest Warehouse - Distribution Warehouse - Distribution Warehouse - Distribution 9
New Construction Current New Construction by Submarket 7,000,000 6,000,000 5,776,646 5,000,000 4,000,000 3,628,398 3,000,000 2,000,000 1,670,673 1,000,000 746,763 1,099,873 1,065,623-230,622 42,000 10
Industrial Advisory Board Members Dallas Fort Worth CBRE Steve Berger CBRE Bob Scully Steve Trese John Brewer David Easterling Bradford Nick Talley Colliers Allen Gump Michael Spain Matt Thompson Jim Ferris Duke Realty Randy Wood Cushman & Wakefield Blake Anderson Holt Lunsford Josh Barnes E Smith Realty Partners Jim Hazard Lee & Associates George Tanghongs Holt Lunsford Canon Shoults Nathan Denton Matt Carthey Brett Lewis Donnie Rohde Lincoln Property Michael Peinado Lee & Associates Mark Graybill Mark V Mike McCartan Jones Lang LaSalle Jamie Galati NAI Robert Lynn Rick Medinis George Curry David Peterson NAI Roberty Lynn Michael Stanzel Craig Jones Patrick Embry Robert Blankenship Prologis Mitch Pruitt John Leinbaugh Stream Cannon Green Prologis Mitch Pruitt Transwestern Jeff Givens Cody Riles Stream Blake Kendrick Research Seth Koschack CBRE CBRE Research Hanes Chatham Jones Lang LaSalle Steve Triolet Jason Moser Walter Bialas Ryan Boozer Colliers Mike Otillio Transwestern John Fulton Swearingen Greg Bennett Brett Owens Henry S Miller Doug Prude Maverick Brad Lipton PM Realty Group Ariel Guerrero Mercer Jeremy Mercer Cushman & Wakefield Ryan Tharp Avison Young Matt Middendorf Jim Lake Company Conner Ivy Hudson Peters Michelle Hudson Younger Partners Carter Crow Whitehall Roy Greenberg Jessica Reinhardt 11
Xceligent Dallas-Fort Worth Team This information has been obtained from sources believed reliable. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to independently confirm its accuracy. For more information, please contact : Tonalea Rehmer Dirctor of Analytics (816) 559-5965 trehmer@xceligent.com Chris Summers VP of Sales (214) 735-2387 csummers@xceligent.com Kyle Brookmole Director of Client Services (214) 280-7067 kbrookmole@xceligent.com Tim Cover Director of Client Services (214) 597-7740 tcover@xceligent.com Devin Polley Director of Client Services (214) 674-7062 dpolley@xceligent.com Jonathan Dudley Director of Client Services (626) 529-6606 jdudley@xceligent.com Brenda Schzerba Director of Client Services (972) 632-9479 bsczerba@xceligent.com Nicole McCarty Director of Client Services (248) 778-7080 nmccarty@xceligent.com 12