Market Research Report
Comprehensive Analysis & 12-Month Forecast — Q1 2026
Market snapshot
The Dallas–Fort Worth industrial market encompasses over 940 million square feet across 35+ submarkets, making it one of the three largest industrial markets in the United States. Current conditions reflect a post-boom normalization — vacancy has risen from historic lows but remains below long-term averages in most infill corridors.
Economic context
The Dallas–Fort Worth metroplex added approximately 44,000 net new jobs in the trailing 12 months ending Q1 2026, maintaining a pace roughly on par with pre-pandemic norms. The regional unemployment rate sits at 4.1%, below the national average of 4.3%, anchoring sustained industrial demand from logistics, manufacturing, and distribution tenants.
Source: Bureau of Labor Statistics. Seasonally adjusted trailing 12-month figures.
Supply & demand
The 2021–2024 construction boom delivered over 180 million SF of new industrial space to D/FW, pushing vacancy from a historic low of 4.8% to a cycle peak near 9.2%. The market is now recovering — Q1 2026 saw 18.5 million SF of leasing activity, the strongest first quarter on record, with 10.4 MSF of net absorption outpacing just 5.7 MSF of new deliveries. The pipeline at 31.2 MSF remains elevated but moderating, and vacancy is now trending downward.
Source: CoStar. U.S. data based on 100+ metros. MPF Research methodology adapted for industrial.
Capital markets
After compressing to a cycle low of approximately 4.3% in mid-2022, industrial cap rates in D/FW have expanded to roughly 6.2% as of Q1 2026, driven by higher interest rates and a pullback in institutional capital. This represents the most attractive entry point since 2017 — particularly for stabilized Class A assets and value-add Class B repositioning plays.
Source: CBRE Research, PREA/RCA. Includes properties sold for more than $5M. Excludes hotels and land.
Investment sales — trailing 12 months
D/FW industrial sales totaled approximately $1.5B per quarter in the trailing 12 months ending Q1 2026 — down from a record $11.2B in 2022 but up modestly from the 2024 trough. Average price per SF held near $147, reflecting durable rent fundamentals even as volume declined.
Source: PREA/RCA. Includes only properties sold for more than $5M. Excludes development land.
| Property / Submarket | Size (SF) | Price | $/SF | Cap rate |
|---|---|---|---|---|
| Intermodal Logistics Center, South Dallas | 1,250,000 | $165M | $132 | 5.6% |
| Alliance Commerce Park, N. Fort Worth | 820,000 | $120M | $146 | 5.8% |
| Skyline Industrial Portfolio, Mesquite | 680,000 | $85M | $125 | 6.1% |
| Cedardale Flex Complex, Lewisville | 310,000 | $52M | $168 | 5.4% |
| Garland Industrial Campus, NE Dallas | 490,000 | $63M | $129 | 6.3% |
| Turnpike Distribution Center, Grand Prairie | 550,000 | $74M | $135 | 6.2% |
Note: Property names are illustrative examples representative of actual market transaction activity.
Submarket analysis
The D/FW industrial market spans 35+ distinct submarkets organized broadly around four major corridors: the Great Southwest / I-20 corridor, South Dallas / I-45, Alliance / North Fort Worth, and the East / I-30 corridor. Each corridor serves distinct tenant profiles and exhibits different supply/demand dynamics.
Schematic representation. Dashed lines = major interstates and tollways. Source: CoStar submarket definitions.
| Submarket | Vacancy | YOY rent chg. | Inventory | Under const. | Outlook |
|---|---|---|---|---|---|
| Great Southwest / I-20 | 5.8% | +5.4% | 98M SF | 1.2M SF | Strong |
| DFW Airport / Mid-cities | 6.2% | +6.1% | 85M SF | 2.1M SF | Strong |
| Grand Prairie / I-30 | 6.1% | +5.1% | 55M SF | 0.9M SF | Strong |
| East Dallas / Garland | 6.9% | +4.8% | 76M SF | 0.8M SF | Positive |
| Mesquite / I-30 East | 7.3% | +4.3% | 48M SF | 0.4M SF | Positive |
| South Dallas / I-45 | 11.2% | +2.6% | 118M SF | 6.4M SF | Opportunistic |
| Alliance / N. Fort Worth | 9.4% | +3.1% | 142M SF | 8.2M SF | Neutral |
| Lewisville / Denton | 8.1% | +4.1% | 62M SF | 3.6M SF | Neutral |
| South Fort Worth / Crowley | 13.8% | +1.4% | 38M SF | 4.8M SF | Caution |
| Inland Port / Wilmer | 14.3% | +0.9% | 32M SF | 5.1M SF | Caution |
Source: CoStar Q1 2026. Vacancy includes direct and sublease availability.
Investment opportunities
Based on vacancy trajectory, rent growth, supply pipeline, transportation access, and historical outperformance probability, the following submarkets offer the most compelling risk-adjusted entry points for industrial investors in 2026.
Infill location with virtually no new supply pipeline. Tight vacancy and strong rent growth driven by last-mile logistics demand. Limited land constrains future competition. Best for stabilized core acquisitions and light value-add repositioning of mid-bay product (50k–300k SF).
Strongest rent growth in the market driven by air cargo adjacency and corporate campus demand. Favorable for cold storage, pharma logistics, and high-bay distribution. Rising rents support value-add lease-up plays near international terminals at DFW International Airport.
Older vintage Class B/C product with improving fundamentals — older units outperforming newer builds as tenants price out of Class A. Workforce density and freeway access make this corridor attractive for last-mile and light manufacturing tenants seeking below-market rents.
Elevated vacancy reflects short-term supply overhang, not structural weakness. Proximity to the Union Pacific Intermodal facility and I-45 to Gulf ports creates durable long-term demand. Distressed assets from overleveraged developers offer opportunistic entry below replacement cost.
Centrally located with excellent I-30 and SH-360 access to all four quadrants of D/FW. Limited new supply relative to demand makes this a hidden gem for mid-bay product. Owner-user sale-leaseback opportunities are emerging from local manufacturers seeking capital.
Supply pipeline is nearly exhausted and rent growth is re-accelerating from a low base. Well-located infill land parcels remain available at competitive basis for speculative or build-to-suit development targeting regional last-mile users and light industrial tenants.
Market outlook — 12 to 24 months
Deliveries have declined significantly through 2025, with the pipeline normalizing to approximately 18–22M SF annually by 2026 — closer to historical equilibrium. Combined with accelerating nearshoring-driven demand and continued population growth, market-wide vacancy is expected to return toward 6% by mid-2026. Rent growth should re-accelerate to 4–5% annually in infill submarkets.
| Metric | Q1 2026 (actual) | Year-end 2025 (actual) | Year-end 2026 (forecast) |
|---|---|---|---|
| Market vacancy | 8.7% | ~7.2% | ~6.4% |
| Avg. asking rent / SF | $8.42 | ~$8.71 | ~$9.13 |
| Avg. cap rate | 6.2% | ~5.7% | ~5.4% |
| Annual deliveries | ~32M SF | ~22M SF | ~18M SF |
| Net absorption | 14.2M SF | ~20M SF | ~24M SF |
| Avg. sale price / SF | $147 | ~$142 | ~$151 |
Forecasts are based on CoStar, CBRE, and MPF Research methodology. Subject to macroeconomic and interest rate risk.