DFW Industrial Demand Is Outrunning New Supply, and the Tenant Leverage You Had in January Is Gone

Earlier this year, tenants in DFW could play landlords against each other and win. Free rent, fat TI packages, and a shrug when the owner wouldn't budge. That market has been fading all year, and the third-quarter numbers show how far it's gone.

Start with the setup. DFW industrial leasing hit a record pace through the first half of 2026, with tenants signing roughly 40 million square feet, the strongest half-year total this market has ever produced. Net absorption came in around 18 million square feet against about 13 million square feet of new deliveries, meaning occupiers were already soaking up space faster than developers could build it. Third-party logistics providers did a lot of the heavy lifting, including a roughly 1 million square foot commitment from DSV, alongside continued activity from Amazon, Google, and a growing wave of data-center-related users competing for large sites and power capacity.

The third quarter didn't slow that down, it sped it up. Cushman & Wakefield has DFW industrial vacancy at 7.3% for Q3, down 70 basis points from the prior quarter and the lowest reading since late 2023, the seventh straight quarterly decline. Lee & Associates has overall vacancy at 8.0%, versus 9.5% a year ago. Net absorption came in around 13.9 million square feet for the quarter and 28.6 million year to date, one of the strongest paces this market has ever posted.

Here's the part that matters most for anyone with a lease decision ahead. JLL has roughly 31 million square feet under construction, and Cushman is projecting about 33 million square feet of completions for the full year against absorption that could match or beat it. When demand keeps pace with deliveries, the cushion of empty new buildings stops growing, and that cushion is exactly what gave tenants their leverage over the past two years.

I'm not saying rents are about to spike overnight. Average asking rent is still sitting around $9 per square foot NNN, and plenty of landlords will still sharpen their pencils for good credit and a longer term. But the posture has shifted. The owner with a clean 100,000 square foot box in a good submarket has noticeably less reason to discount than he did six months ago.

So what do you do about it? If you have a lease expiring within 18 to 24 months, start now, not next spring. Tour what's actually available, get real comps, and find out which landlords still need to fill space. The tenants who wait until the last six months are the ones who end up taking a short-term extension at whatever number the landlord names. If you've got flexibility on term, locking in now protects you from another round of tightening before your next renewal comes up.

Vacancy numbers will keep bouncing around from report to report, and anyone selling you certainty on a single quarter is overselling. But the trend across two straight quarters, record H1 leasing followed by a Q3 vacancy drop and construction barely keeping pace, tells a consistent story. The balance is tilting back toward owners, submarket by submarket. Treat the next few months as the last good stretch to make a move on your terms rather than theirs.