Amazon eyeing another big shipping hub south of Dallas
June 17, 2018
By Steve Brown
Dallas Morning News
Your Amazon orders are fueling an industrial building boom in D-FW and U.S.
Some of North Texas' biggest real estate deals have something in common. This week, online retailer VMInnovations rented more than 400,000-square-feet of distribution space south of Dallas in Hutchins for a new shipping hub and fulfillment center.
Next door in Wilmer, digital retail giant Amazon is finalizing a deal to lease more than 1 million square feet of space in two new warehouses for another distribution center. The planned fulfillment center on Interstate 45 would be the third major facility Amazon has in southern Dallas County.
The e-commerce boom is fueling demand for industrial space in Dallas-Fort Worth and across the country.
For every $1 billion of digital retail sales, shipping requirements gobble up more than 1.2 million square feet of warehouse space, CBRE's head of industrial research David Egan said.
Egan credits online retailing with fueling one of the biggest U.S. industrial building and leasing booms on record.
"We are seeing on average 50 million square feet of extra demand a year in the market than history says we should be seeing," Egan said. "This has been going on now for almost six years."
Just how much warehouse and shipping space the e-commerce firms have occupied is impossible to determine, Egan told members of the National Association of Real Estate Editors meeting last week.
"It's hard to really get to the bottom of what people are doing," he said. "No one tells us what is happening inside that building when we do the lease."
But Egan is sure that the digital retailing boom is responsible for the record high rents and record low vacancy in the country's industrial property market. "We are in rarified air here," he said.
More than 20 million square feet of industrial space is being built in the Dallas-Fort Worth area - one of the largest warehouse development pipelines in the country.
"In 2013 or so we started to see a lot more demand for logistics space in the market than GDP would call for," Egan said.
Egan predicts that e-commerce firms will continue to scramble for shipping and distribution space and may turn to non-traditional locations including vacant neighborhood big box stores to meet their needs.
"We are going to see more and more space to support those sales, even if the broader economy goes down," he said. "It can almost be counted on."