Texas Market Reports

By Ron Gilbreath, managing director of asset & property management, Westmount Realty Capital  It’s no trade secret that global lockdowns during the pandemic had a significant and lasting impact on supply chains worldwide. EY’s 2023 poll revealed that 72 percent of senior-level supply chain executives experienced negative impacts on their businesses due to the pandemic, resulting in the emergence of a concentrated focus on supply chain visibility. The crucial point to acknowledge during this continued disruption is that these impacts are closely tied to the just-in-time (JIT) inventory management system. As a result of these challenges, businesses are actively reassessing their distribution network strategies, leading to a surge in demand for industrial warehouse space. With the necessity to maintain greater inventory levels, companies are re-evaluating their warehouse space requirements and distribution setups to mitigate the risk of future supply shortages. The lockdowns disrupted two essential elements of JIT strategy: steady production and supplier reliability. Suppliers forced to comply with government lockdowns incurred major disruptions across various business lines due to the challenge of maintaining consistent production. This is a key component of JIT delivery that relies on having materials physically present during the production process. When these materials are unavailable, …

By Ben Wallace, SIOR, vice president, Colliers Over the past decade, “suburban industrial” buildings have become more critical than ever. A suburban industrial building can be defined as one that is located within the suburbs of a major metroplex and designed for small- to medium-size users with above-average allotments of office/showroom space to accommodate service and light distribution uses. The typical building and infrastructure designs naturally limit heavy truck traffic and achieve higher rental rates, deterring heavy distribution and manufacturing users from locating there.   With macro-level shifts in how people shop for and acquire goods and services, the need for suburban industrial buildings that are located near consumers has become increasingly important. Most cities have done an excellent job of regulating and altering development standards for these assets to meet this need while being careful to avoid creating rundown industrial areas in their communities. These cities have achieved this goal by elevating development standards to feature clean concrete exterior façades as well as the screening of dock loading areas and attractive glass entrances. The reason that many of these items are important is that the vast majority of these suburban industrial developments are not appropriately zoned when developers come to …

By Taylor Williams The current industrial development landscape in Texas is a true testament to the awesome power of demand — and of interest rate hikes. From El Paso to Houston, industrial users of all sizes and across all industries continue to demand new or expanded spaces to accommodate their ever-growing warehousing, distribution and manufacturing needs. E-commerce, nearshoring, COVID-19 — name your impetus — they’ve all contributed to a feverish pace of industrial development and absorption in recent years.  According to fourth-quarter 2022 data from CBRE, Dallas-Fort Worth (DFW) saw an annual supply gain of about 36.1 million square feet in 2022 while posting positive net absorption of 36.5 million square feet. Third-party logistics users drove much of the new leasing activity, which contributed to a 4.6 percent vacancy rate at the end of the year. The market has now posted consecutive years of sub-5-percent vacancy. Fittingly, there remains more than 75 million square feet of product under construction throughout the metroplex. In Houston, developers delivered approximately 18.8 million square feet of new industrial space in 2022, per CBRE. Yet the market posted more than 30 million square feet of positive absorption over the course of last year, and the …