Industrial

El Paso’s industrial market is growing and maturing, as evidenced by a surge in investment demand from institutional capital sources over the last 18 to 24 months. Whereas in past cycles, institutional capital found its way to El Paso by developing here, new players have been ready to buy existing portfolios, but we have seen very little new spec development. Stonelake Capital Partners, LINK Industrial Properties and Equity Industrial Partners/Raith Capital Partners are examples of new investors actively buying into the El Paso industrial market. Several factors have contributed to El Paso’s rise on the radars of institutional investors, but the heart of this trend is simple rent growth. The average asking rent for Class A and B industrial properties increased by a stunning 15.8 percent between 2018 and 2019. Rent growth in the East El Paso submarket increased by an even greater margin of 24.3 percent. As those numbers suggest, demand for industrial space in El Paso, which is largely driven by manufacturing activity in the sister city of Ciudad Juarez, Mexico, is quite strong. Demand for space comes from a diverse set of industries, namely automotive, consumer goods and electronics. El Paso has also seen new industrial demand …

The growth of large distribution facilities for e-commerce users and third-party logistics providers (3PLs) symbolizes the evolution of Houston’s industrial market. Consequently, developers are leaping into action to secure well-located infill sites that are squarely in the pathways of natural population growth, the rise of new industries and infrastructural upgrades. According to data from office and industrial brokerage firm Lee & Associates, there was roughly 18 million square feet of distribution space under construction throughout the Houston area at the end of 2019. This figure represents a 20 percent increase above the previous high of 15 million square feet in 2015, the approximate time at which the price of oil — the longtime foundation of Houston’s economy — began to tumble. The sheer size and number of these projects has catapulted Houston into the No. 3 spot nationally for industrial product under construction behind Dallas-Fort Worth (DFW) and California’s Inland Empire, according to the latest data from CoStar Group. CoStar notes that there is roughly 27 million square feet of industrial space across all sub-types of industrial product under construction throughout Houston. The market also took the bronze medal for new deliveries in 2019. Older, smaller industrial properties that were …

Dallas-Fort Worth (DFW) has been among the top metros for industrial development and investment alike, with net absorption and leasing rates holding strong for the past several years. With the bulk of industrial development in DFW being big box product over 100,000 square feet, there’s been minimal development of smaller assets. So far in 2020, roughly 4.3 million industrial square feet has gone under construction in the metroplex. Approximately 10 percent (362,000 square feet) of that total centers on industrial projects under 100,000 square feet — the result of higher construction costs for smaller assets that don’t justify market rents. Current market rents do not satisfy yield requirements for developers to construct smaller assets. However, the general investment outlook for existing smaller industrial product is much more secure due to minimal new competing properties. Roughly 15 million square feet, or 40 percent of North Texas’s industrial pipeline, sits within five miles of DFW International Airport or Fort Worth Alliance Airport, according to CoStar. Approximately 3.3 million square feet of new product is expected to come on line by the second quarter in the DFW Airport region. Over half of the 30.9 million square feet of product under construction in DFW …

The Dallas-Fort Worth (DFW) real estate market is remarkable. In a recent meeting with a broker from another market, he made the observation: “You guys in Texas are like a country unto yourself. It’s not that you don’t know there are 49 other states, you just don’t care!” While that was a bit of an exaggeration, the point was well taken. Certainly DFW is not immune to national affairs and recessions, but the market appears to have enough momentum to carry through 2020, though the uncertainty of the presidential election could cause a few users and buyers to pause before making decisions. In 2016, as Global President for the Society of Industrial and Office Realtors (SIOR), I travelled throughout North America and Europe. Continually meeting with SIOR brokers in other markets gave me unique perspective on how DFW really does compare to the rest. The leasing and absorption activity far outweigh most other markets, making it an enviable location. Texas will always be a magnet for businesses as long as it retains a pro-business state of mind: Texas is a central part of the country and a right-to-work state with no state income tax, among other attractive incentives. Oftentimes, as …

When real estate professionals contemplate the nation’s top industrial markets, Austin is not the first market to come to mind. Bigger and more established markets like Dallas, California’s Inland Empire, Chicago and Houston are often the newsmakers with tens of millions of square feet  of industrial product under construction and tenants routinely signing deals for million square foot-plus deals. Austin has been mostly known and admired for its office market and tech-forward economy, gaining notoriety circa 2000 with the tech boom and exploding in growth over the last five years with expansions and commitments from Apple, Google, Facebook, Indeed, Amazon, Oracle, Charles Schwab and Expedia. However, Austin’s emergence as one of the nation’s best cities to live in with ample opportunities for high-paying employment has resulted in astounding population growth — one of the biggest drivers for industrial real estate. As the population expands so does demand for goods and materials that are stored in warehouse buildings, and the Austin industrial market will certainly benefit from this trend for the foreseeable future. Per the Texas Demographic Center, the Austin metro population stood at roughly 1.25 million people in 2000. It is anticipated that the metro area will be home to …