June 23, 2020
In one of the nation’s largest and busiest industrial markets, the Dallas-Fort Worth metro area, it’s not quite business as usual given the uncertain economic outlook brought on COVID-19 and efforts to control the spread of the virus. Connect Media asked Joe Santaularia, first VP with Bradford Commercial Real Estate/CORFAC International, for an update.
Q: What are tenants/users looking for in the Dallas-Fort Worth industrial market?
A: We’re seeing industrial tenants with expiring leases react depending on their circumstance. Tenants who are uncertain on how COVID-19 will affect their business long-term are opting for short-term renewals, while tenants who are confident that their business will thrive are taking advantage of extended landlord concessions and are searching for longer-term renewals.
Tenants expanding their businesses due to shifts in consumer demand are using local broker expertise to understand the market. A slight supply uptick has shifted the market from a robust landlord-favored one back towards the middle, allowing tenants to find more economical transactions.
Q: What industrial trends are you seeing right now?
A: Climate-controlled warehouse space (cold storage) for perishable goods is picking up, and the demand for freezer cooler space continues to rise as consumers increasingly order food online or through food delivery apps.
On the other hand, retail took a hit in 2019, and is experiencing an even larger downturn in 2020. The industrial sector looks to benefit from this as some retail tenants shift inventory from showroom to storage/online sales.
Q: What is the post-COVID outlook for the industrial sector?
A: The outlook is cautiously optimistic, especially for the industrial sector. As demand has shifted across different sectors, it remains strong on the industrial side. Yet, there is still plenty of uncertainty for most businesses, as the pandemic has not ended and its effects on society are wide-ranging and the duration is unknown. Until that uncertainty is relieved, the economy will not be in full recovery mode.
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