A Decade of Evolution: Driving Forces of Industrial Real Estate Demand in the DFW Metroplex
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2025-05-19
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This study investigates the primary factors driving industrial real estate development intensity across submarkets in the Dallas-Fort Worth (DFW) Metroplex from 2010 to 2024. As one of the fastest-growing industrial markets in the United States, DFW presents a unique opportunity to analyze how market dynamics, spatial variables, and demographic trends influence where developers choose to build. Using a pooled panel regression model, this study evaluates the impact of six independent variables - population change, vacancy rate, absorption rates, rental rate growth, and proximity to both Dallas and Fort Worth - on a normalized dependent variable defined as development intensity (completions as a percentage of existing supply).
The findings reveal that vacancy rate, absorption, and proximity to Dallas are statistically significant predictors of development intensity. Notably, the positive relationship between vacancy and development suggests the presence of speculative or pipeline-driven building activity, especially in rapidly growing submarkets. While rental rate growth approached significance, population change and proximity to Fort Worth did not demonstrate a strong influence on new construction. These results highlight the complexity of industrial development behavior, particularly in large, logistics-driven markets, and suggest that short-term demand signals and spatial accessibility may be more influential than broader demographic trends. This thesis contributes to the growing body of research on industrial real estate by offering a replicable model and raising new questions around how geography, timing, and market expectations shape development decisions in high-growth regions.
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Finance