Dallas-Fort Worth Industrial Market: Trends and Forecasts for 2025

The Dallas-Fort Worth (DFW) industrial real estate market has been a powerhouse of growth in recent years. However, 2024 marked a significant shift as the market cooled following a period of aggressive development and soaring demand. With rising vacancies, stabilizing rents, and a slowdown in new construction, what does the future hold for the region?

Current market snapshot

• 33.6 million square feet (SF) of new industrial space was delivered in the past 12 months.
• 21.8 million SF of net absorption, marking a slowdown compared to previous years.
• 9.4% vacancy rate, one of the highest among the top 20 U.S. industrial markets.
• 4.2% market asking rent growth, significantly lower than the peak of 10.9% in 2022.
• $1.2 billion in sales volume, a decline from pre-pandemic levels.

Key drivers and trends

The cooling market is primarily driven by two key factors: elevated move-outs and strong supply-side pressures. Companies such as Amazon and Walmart vacated large spaces, contributing to higher vacancies. At the same time, over 110 million SF of new inventory —equivalent to the entire industrial stock of Buffalo, New York — came online, creating an oversupply in some submarkets.

However, certain industries continue to fuel demand. The food and beverage sector has been the standout, with tenants like Ferrara, Mondelez, and Post Consumer Brands. Additionally, tech and data center expansions — led by companies like Google — are driving selective growth, particularly in Southwest Dallas.

Forecast: A market on the verge of rebalancing

While the vacancy rate will likely remain above 9% throughout 2025, an interesting shift is expected in the construction pipeline. With new projects slowing due to tighter borrowing conditions, industrial deliveries in 2025 are projected to hit a 10-year low. This slowdown in new supply, combined with steady population and employment growth in DFW, suggests that demand will soon outstrip new supply, helping vacancies decline gradually.

One compelling forecast emerges when examining population growth trends. The DFW metro added 152,000 new residents from mid-2022 to mid-2023. Given the historical average of 95 SF of industrial space per resident, this population growth could drive demand for an additional 14.4 million SF of industrial occupancy annually. This aligns closely with the anticipated slowdown in deliveries, potentially accelerating rent growth in late 2025 and beyond.

The takeaway

2025 presents a window of opportunity to negotiate better lease terms for tenants as vacancies remain high. For investors and developers, the key will be strategic positioning —focusing on infill submarkets where supply remains constrained. By mid-2025, rent growth is likely to reaccelerate, making early investments in high-demand areas a potential windfall.

As the DFW industrial market moves toward equilibrium, those who anticipate and act on these trends will be best positioned for success in the evolving landscape.