DALLAS COMMERCIAL REAL ESTATE INDUSTRIAL MARKET REPORT | Q4 2025
February 3, 2026
Industrial Market Report: 2025 Dallas–Fort Worth Industrial Market Overview
The Industrial Market Report for 2025 outlines how the Dallas–Fort Worth (DFW) industrial sector adjusted after several years of accelerated expansion. Following a period marked by record-setting development and leasing activity, market conditions moderated over the course of the year. Tenant demand slowed from prior peaks, while new supply continued to deliver across the region. This shift resulted in more balanced conditions, characterized by higher vacancy levels, slower absorption, and increased competition among landlords.
This Industrial Market Report examines vacancy trends, absorption levels, construction activity, rental rates, and transaction volume across the DFW metroplex, providing a comprehensive snapshot of industrial real estate conditions at year-end 2025. The data reflects a market transitioning away from a highly landlord-favorable environment toward one where supply and demand are working to realign.
Vacancy and Absorption Trends
Total industrial inventory in Dallas–Fort Worth exceeded 1.08 billion square feet in 2025, excluding flex product, reinforcing the metroplex’s position as one of the largest industrial markets in the country. Net absorption remained positive throughout the year, totaling approximately 27 million square feet, though demand softened compared to the elevated levels recorded earlier in the cycle. Fourth-quarter absorption reached 7.6 million square feet, indicating continued tenant activity despite a slower pace.
Leasing demand was concentrated in Northwest Dallas, North Fort Worth/Alliance, South Dallas, and South Fort Worth. These submarkets accounted for a significant share of overall leasing activity, supported by logistics, distribution, and manufacturing users seeking modern industrial facilities. In contrast, several interior submarkets experienced reduced demand or modest contraction as tenants delayed expansion decisions amid higher borrowing costs and economic uncertainty.
Market-wide vacancy increased over the course of the year, ending 2025 at 9.4%, representing more than 100 million square feet of vacant industrial space. Elevated vacancy levels reflect the volume of new supply delivered during the year and limited pre-leasing activity on recently completed projects. Vacancy is expected to remain elevated in the near term as newly delivered buildings continue to lease up.
Development and New Supply
Dallas–Fort Worth continued to host the largest industrial construction pipeline in the United States, with approximately 33.8 million square feet under construction at year-end 2025. Development activity remained concentrated in North Fort Worth/Alliance, Northwest Dallas, and South Fort Worth, areas that have consistently attracted large-scale distribution and logistics users.
While construction levels remained elevated, rising financing costs and moderating tenant demand contributed to a slowdown in new construction starts during the second half of the year. Developers have taken a more measured approach, with increased focus on leasing progress and project timing. Continued deliveries throughout 2025 added to available inventory and intensified competition, particularly among newer bulk distribution facilities.
Rental Rates and Pricing
Average NNN asking rents across the metroplex ended 2025 at approximately $9.25 per square foot, remaining near historical highs. However, rent growth slowed compared to previous years, particularly in submarkets with elevated levels of new supply. Increased availability and competition have resulted in more stable pricing and, in some cases, greater lease concessions.
Infill and supply-constrained submarkets such as South Stemmons and the DFW Airport area continued to maintain premium pricing. These locations benefited from limited development opportunities, strong transportation access, and proximity to population centers, allowing rental rates to remain comparatively higher despite broader market adjustments.
Summary and Outlook
The 2025 Industrial Market Report shows the Dallas–Fort Worth industrial market transitioning toward more balanced conditions. Elevated supply levels, slower absorption, and higher vacancy reshaped market dynamics throughout the year, providing tenants with increased leverage while prompting landlords and developers to adjust expectations.
As supply and demand continue to realign, market performance is expected to vary by location and asset quality. Modern, well-located industrial facilities are likely to outperform, while submarkets with heavy concentrations of new supply may continue to face competitive leasing conditions in the near term.
Download: Industrial Market Report
Click here to download the 2025 Industrial Market Report.