BISNOW Panel Re-Cap: E-Commerce Is Driving The DFW Industrial Market

The economy in Dallas returned to near pre-pandemic levels in the 3rd quarter of this year despite the ongoing struggles with supply chain issues and logistics. Record high demands for warehouse space across the metroplex pin DFW as the second largest industrial market, launching it forward to a full projected economic recovery. So, what is boosting an already booming market? The rise of e-commerce across the country. E-commerce is forecasted to increasingly account for more of our retails sales year after year as online shopping trends continue to soar.

In early November 2021, Trevor Heaney, Director of Business Development at ARCO/Murray, sat down with panelists Al Sorrels (Majestic Realty Co.), Sarah Lancarte (Lancarte Commercial), Greg Gordon (Gordon Highlander), and Bret Lauritsen (Olsson) to discuss how e-commerce has played a pivotal role in the growing Dallas-Fort Worth industrial market.

Here are some of the key pieces of insight they shared:

  1. Online spending trends are driving the need for industrial space.

Currently within e-commerce we are averaging just under 3 trillion dollars in annual sales with that projected to double in the next few years. For every significant rise of e-commerce dollars spent, there is an even more pressing need for industrial and logistical space. Right now, retail giant Amazon is the largest user of DFW industrial real estate with a substantial 16 million square feet across the metroplex. The baby boomer generation is enjoying the newfound sense of convenience and efficiency, with many failing to revert to their pre-pandemic shopping practices. Millennials and Gen Z continue to spearhead online purchasing, the projection for the market is extremely positive. Although it’s good to remain cautious in any market, the demand does not seem to be going anywhere.

2. Build appropriate features to attract higher-profile tenants.

Land parcels and available leases are going at a much faster pace than pre-pandemic levels. The question is no longer about whether a building will lease, but who will lease it. Developers that want to attract high profile tenants need to focus on their building supplying essential features such as access to intermodal transportation, generous clear heights, and flexible circulation patterns. Flexibility and market readiness considered, providing the base power for lighting, controls, and spec office requirements with the ability to quickly upsize to suit tenant needs is proving a successful tactic as well. Spaces will adapt or fluctuate so developers should avoid getting wrapped up in spending a lot of up-front cost on unnecessary add-ons.

3. Complex projects require creative solutions.

Early design considerations, the flexibility for late stage changes and the ability to adapt and implement them is critical at present. Where a project may have originated as a speculative warehouse, high demand for space has many projects transitioning to “spec-to-suit” opportunities. In these situations, the design, scope and project schedule are impacted by the coordination required to deliver the project successfully. Assembling an agile team with an experienced design-build partner that will engage with the end user to understand their business and associated requirements is critical to minimizing time and cost implications.

Right now, developers are primarily concerned with where they can build next, not whether the building will lease successfully. Selecting a proven design-build partner early in the process is important to overall project success and timeline management. As ENR’s #1 Contractor for Distribution and Warehouse space, ARCO/Murray is decreasing project durations and mitigating cost escalation risks through the mastery of the design-build methodology by utilizing in-house engineering and design expertise.

Interested in learning more about the industrial sector or want to discuss an upcoming opportunity? Contact us today.

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