DFW Industrial Landlords Just Flipped From Price Takers to Price Makers

For the better part of two years, every DFW industrial update has led with the same headline: vacancy keeps falling, rents keep climbing, construction keeps breaking records. That trend hasn't reversed. But buried in the latest quarterly numbers from Cushman & Wakefield is a more specific story, and it's the one that actually changes how a negotiation goes once you sit down across from a landlord's broker.

Twenty-eight tenants leasing 500,000 square feet or more signed for a combined 23 million square feet of DFW industrial space over the trailing twelve months. That's nearly a third of everything newly leased in the entire metro. A market where one in three new leases comes from a tenant that size behaves differently than a market with a broader spread of deal sizes, because landlords with big blocks of space know exactly who's shopping and how few of them there are. When your pool of prospective tenants for a 600,000 square foot building is measured in dozens rather than hundreds, you negotiate like it.

The broader numbers back up why landlords are feeling that confidence. Vacancy sat at 8.1 percent at the end of the second quarter, down 20 basis points from the prior quarter and 110 basis points from a year earlier. Net absorption hit 9.0 million square feet for the quarter and 13.6 million year to date, on the back of 40.3 million square feet leased in the first half, the strongest first-half leasing total the metro has ever posted. Average asking rent climbed to $9.19 per square foot net, up 4 percent from the prior quarter and better than 13 percent year over year, a new high for the market.

What's different about this update compared to the construction and vacancy stories we've covered already is where that absorption actually landed. Alliance kept its usual pace at the top with 3.9 million square feet absorbed year to date. East Dallas suburbs posted 2.4 million. South Dallas added 2.0 million, with named users like DHL, Logistics Plus, and T1 Energy specifically called out as the demand driving vacancy down in that corridor. South Fort Worth rounded out the leaders at 1.8 million. Four different submarkets, four different tenant profiles, all pulling in the same direction at once.

That's the part worth sitting with if you're a mid-size tenant rather than a big-box user. You're not competing against the 500,000 square foot crowd directly, since most of them need purpose-built or large-format space you probably don't. But you are competing for the same shrinking pool of available buildings, and when landlords see a third of their leasing volume locked up by tenants who rarely walk away from a signed term sheet, they stop feeling pressure to sweeten terms for everybody else down the size chart too. Free rent periods have gotten shorter. TI allowances haven't kept pace with construction cost increases. Renewal options that used to lock in a fixed bump are increasingly quoted at prevailing market rate instead.

Construction hasn't stopped responding to this, it's just gotten more selective about where it lands. Roughly 29.8 million square feet is currently under construction, about 2.9 percent of total existing stock, with site work underway on another 16.9 million square feet beyond that. That's still a sizable pipeline by national standards, but developers have gotten more disciplined about building on spec versus building to a signed tenant, which is part of why a chunk of that new supply gets absorbed before it ever shows up as available space on a listing site.

Cushman & Wakefield's own projection has year-end 2026 absorption landing around 33.7 million square feet, with vacancy dropping to 7.9 percent or lower by December. If that holds, 2026 will mark the third straight year the metro has tightened rather than loosened, even with construction activity that would be the envy of almost any other industrial market in the country.

For a tenant planning a move in the next six to twelve months, the practical read is this. If your space need falls anywhere near that 500,000 square foot threshold, expect landlords to treat your tour like a competitive process from day one, because at that size you genuinely are competing with a short list of other large users for a short list of qualifying buildings. If you're smaller, the pressure is less direct but still real, since the landlords you're negotiating with are pricing their whole portfolio off what the big-box tenants down the street just paid. Either way, the days of touring five buildings over three months and letting the market come to you are mostly gone for now.

None of this means there's no room to negotiate. Submarkets still vary meaningfully, and a building that's been sitting because of a lease-up issue or an ownership transition will still move on price and terms even in a tight overall market. But the broad trend is unmistakable. Landlords who spent 2020 through 2023 competing hard for tenants have, over the last two years, built enough leverage back that they can afford to wait for the right deal instead of chasing yours. Knowing that going into a negotiation changes what you ask for, and more importantly, changes how fast you need to move once you find a building that actually works.