DFW Industrial Market Climbs to No. 3 Nationally

Dallas-Fort Worth’s industrial sector continues to separate itself from many major US markets.

Bisnow reports that Marcus & Millichap ranked DFW No. 3 on its 2026 National Industrial Index, citing a combination of stronger leasing momentum, sustained population growth, and a slowing wave of new supply.

The ranking comes as investor activity gains momentum across the metro. According to Marcus & Millichap, industrial transaction volume rose about 40% year over year through the first quarter, fueled by a nearly 50% increase in deals ranging from $1M to $10M. The brokerage expects the region’s employment base and expanding population to continue supporting warehouse demand.

Supply Pressures Ease

DFW’s industrial market spent much of the past several years absorbing an unprecedented wave of new development. While that supply surge pushed vacancy higher, the market is now entering a different phase as construction activity slows and demand remains resilient.

According to Marcus & Millichap’s 2026 Industrial Investment Midyear Outlook, the region’s development pipeline has contracted significantly, reducing the risk of oversupply that weighed on many Sun Belt markets in recent years. The brokerage highlighted DFW’s diversified economy, transportation infrastructure, and sustained in-migration as factors supporting long-term industrial demand.

Those fundamentals have helped DFW weather recent market volatility better than some coastal peers. Marcus & Millichap Senior Managing Director of Investments Adam Abushagur told Bisnow that the metro’s employment growth and economic diversity continue to attract both tenants and investors despite broader uncertainty across commercial real estate.

The Details

Marcus & Millichap projects DFW will add approximately 40,000 net new jobs in 2026, creating demand across multiple property sectors. For industrial real estate, that translates directly into additional warehouse, logistics, and distribution requirements.

The market’s vacancy rate fell to 8.9% during the first quarter, its lowest level in three years, as new deliveries slowed. Completions are projected to reach their lowest annual total since 2013, further tightening available space.

Leasing demand is coming from both large occupiers and smaller businesses. While major logistics users continue to absorb big-box facilities, growing numbers of small businesses are leasing shallow-bay industrial space throughout the metro. Together, those trends have helped maintain occupancy levels even as substantial amounts of new product have entered the market over the past several years.

Institutional Capital Returns

Investor preferences are also evolving. According to Trey McGhin, principal at Dosch Marshall Real Estate, institutional capital has reentered the industrial development market over the past year after a period of caution.

Earlier in the cycle, investors gravitated toward smaller infill properties because they required less equity and carried lower development risk. As fundamentals improved and capital markets stabilized, larger projects became more attractive again.

That shift is directing investment toward higher-growth submarkets with greater land availability. McGhin identified Denton, South Dallas, Rockwall, Royse City, Terrell, Forney, and Waxahachie as areas benefiting from renewed interest in developments ranging from 500K SF to 1M SF. Investors increasingly view these locations as opportunities to build scale while capturing future population and distribution growth across North Texas.

Why It Matters

Many industrial markets spent the past several years digesting record levels of development. DFW was among the most active, consistently delivering tens of millions of square feet annually. As construction slows, the market is beginning to benefit from a healthier balance between supply and demand.

The return of institutional capital reinforces that trend. Larger investors typically seek markets with durable population growth, diverse employment bases, and strong infrastructure networks. DFW checks all three boxes. The metro remains one of the nation’s largest logistics hubs, supported by extensive highway connectivity, rail infrastructure, and access to major consumer populations.

The ranking also suggests investors increasingly view DFW as a lower-risk growth market relative to some gateway cities. While Los Angeles and New York ranked outside the top 20 in Marcus & Millichap’s index, several Sun Belt and Midwest markets dominated the upper tier due to stronger supply-demand dynamics and lower vacancy risk.

What’s Next

Investors are expected to remain focused on DFW’s emerging growth corridors through the remainder of 2026. McKinney remains one of the metro’s most closely watched industrial markets, driven by expansion around McKinney National Airport and some of the highest industrial rents in the region.

However, available opportunities in McKinney are becoming harder to find as land gets absorbed and development activity accelerates. According to market participants, attention is already shifting farther east and north, including toward Melissa and other developing submarkets.

Marcus & Millichap also expects the Fort Worth logistics corridor, Northeast Dallas, and the South Stemmons area to continue attracting capital. With vacancy trending lower, construction slowing, and institutional equity returning, DFW appears positioned to remain one of the country’s most closely watched industrial investment markets through the rest of the year.