DFW's Industrial Pipeline Just Crossed 31 Million Square Feet, and Most of It Isn't Leased Yet

Two numbers came out of the second quarter industrial data for Dallas-Fort Worth that don't seem like they belong in the same market. Vacancy fell for the seventh straight quarter, down to roughly 9.3%, continuing a slide from the 11.1% peak in late 2024. At the same time, the amount of industrial space under construction across the metro climbed past 31 million square feet, one of the largest active pipelines of any market in the country. Tightening vacancy and a massive construction wave are supposed to work against each other. Here, for now, they're happening at once.

The number that actually explains it is preleasing. Of that 31-plus million square feet under construction, brokerage data puts the preleasing rate at under 38%. Do the math and that leaves somewhere around 19 to 20 million square feet of space actively being built right now with no tenant attached to it. That's not unusual for DFW, which has run heavy on speculative construction for years, but it's worth sitting with the scale of it. Nearly two-thirds of everything currently rising out of the ground in this metro is a bet, not a done deal.

Absorption has been strong enough to make that bet look reasonable so far. Tenants soaked up close to 18 million square feet on a net basis through the first half of the year, among the best totals of any industrial market in the country, and available space actually shrank by roughly 19% over the past twelve months. Asking rents are running close to $9 a square foot on average and developers who broke ground eighteen months ago, back when demand looked shakier, are now delivering into a market that's tightened considerably since they poured the first slab. That's a good position to be in if you're a developer. It's a more complicated one to read if you're a tenant trying to figure out whether to wait for that new supply or lock something down now.

Not all of that pipeline sits in the same place, and that matters more than the metro-wide number suggests. A large share of it is concentrated in the corridors with the room to support it, mainly Alliance in North Fort Worth and the southern Dallas submarkets around the Inland Port, where developers still have big contiguous tracts left to build on. Infill submarkets closer to the core, the kind with vacancy already sitting in the low single digits because there's simply nowhere left to put a new building, aren't adding much new supply at all. That split means a tenant searching in Alliance and a tenant searching along Stemmons or near the airport are looking at two very different supply pictures, even though they're technically shopping in the same metro.

For a tenant who needs space on a twelve to eighteen month horizon and has some flexibility on submarket, that unleased pipeline is worth paying attention to. A developer sitting on a half-built spec building with no tenant six months from a certificate of occupancy has real incentive to get a lease signed, even in a market where vacancy is trending down overall. Free rent, TI dollars, and rate flexibility tend to show up first on the buildings landlords are most nervous about carrying empty, not on the buildings that are already 80% preleased. If your size and spec needs line up with what's coming out of the ground in Alliance or South Dallas over the next year, there's a real argument for touring the pipeline directly instead of only looking at what's already built and available today.

That argument gets weaker fast if your requirements point you toward one of the tighter, more built-out submarkets. There isn't much new supply coming to bail out a tenant who needs 60,000 square feet somewhere along the DFW Airport corridor or in Great Southwest, because there isn't much land left there to build it on. In those pockets, waiting for the pipeline to loosen things up isn't a real strategy, because the pipeline mostly isn't pointed there. If your search is genuinely tied to one of those tighter locations, the smarter move is starting early on whatever inventory already exists rather than banking on relief that isn't coming.

This is also where it pays to ask your broker for building-level detail instead of relying on the metro headline. A specific project's preleasing status, its expected delivery date, and who else is touring it tell you far more than a metro-wide vacancy rate ever will. A 400,000 square foot spec building in Alliance that's already 60% preleased is a very different negotiation than one sitting at zero six weeks before completion. Both count toward the same regional pipeline number, but they put you in completely different spots at the table.

There's a risk worth naming on the other side of this too. Not every building in that unleased pipeline is going to lease up smoothly just because absorption has been strong lately. If demand cools even a little, or if a few of these large spec projects deliver into the same size range and submarket at roughly the same time, some landlords could end up competing harder against each other than the metro-wide vacancy number would suggest. That's more of a risk for ownership than for tenants, but it's exactly the kind of dynamic that produces good deals for whoever's touring at the right moment. Worth keeping an eye on which submarkets are stacking up multiple large deliveries close together, because that's usually where landlord competition shows up first.

The headline vacancy and rent numbers tell you where DFW industrial sits today. The preleasing rate on that 31 million square feet under construction tells you something more useful: where the leverage is likely to sit six to twelve months from now, and it isn't the same answer in every submarket. If you've got a decision coming up, whether that's a renewal, an expansion, or a first industrial lease for a growing operation, it's worth asking specifically what's under construction near your target locations and how much of it still needs a tenant, rather than assuming the metro-wide story applies evenly everywhere you might look.