DFW’s industrial vacancy is much tighter than the averages suggest

DFW’s industrial vacancy rate peaked last year at 11.3%, which is well above the region’s historic average of 8.5%. The media often portrays DFW’s run-up and high level of “average” vacancy as a sign of market imbalance. However, the reason behind the elevated rate is more complex than it appears.

Existing properties are actually operating well below both the current and long-term averages. Across all building vintages, vacancy remains significantly lower than the average—ranging from 6.3% for 2021 product to just 4.8% for properties built before the 1970s.

The disconnect in vacancy rates began in 2022, largely due to a surge of new product entering the market that is still in the initial lease-up phase. Vacancy for 2022 deliveries stands at 15.0%, while 2023 product has a much higher vacancy rate of 34.9%.

Despite these figures, demand has remained solid, as evidenced by consistent positive leasing activity in these new developments. The sheer volume of recent deliveries has skewed the overall vacancy average upward, primarily because most of these projects were speculative and naturally take time to lease.

In 2023 alone, deliveries exceeded 68 million square feet—more than double the 25–30 million square feet delivered annually between 2015 and 2020.