Dallas-Fort Worth’s industrial market posted a resilient leasing performance in Q4 2025, supported by stabilizing vacancy around 9.1% and a strong rebound in tenant activity. Leasing volume is on track to reach roughly 70 million SF for the year, driven largely by new leases and pent-up demand that returned after 2024’s election-related slowdown. Sublease space remains elevated at an annual average near 10.5%, offering discounted options that continue to attract users and influence overall pricing. Rent growth has decelerated to 4.3%, its twelfth quarter of slowing, but still outperforms most major U.S. markets. With supply pressures easing and absorption improving, landlords anticipate firmer pricing in early 2026, though sustained demand remains the key variable.
Key Findings
- Demand rebounded in Q4 2025, absorbing 4.9 million SF as vacancy held near 8.9%. Leasing was driven by pent-up demand, sublease activity, and limited new deliveries.
- Construction remains elevated with 39.2M SF underway, though developers are more selective. Just 3M SF delivered, helping vacancies stabilize despite lingering oversupply in select submarkets.
- Asking rents averaged $10.12/SF with 4.4% annual growth, outperforming peers amid moderating momentum. Sales totaled $34.8M, pricing reached $141/SF, and cap rates averaged 6.2%.
DFW Demographics
Source: CoStar Group, Inc.
- Unemployment Rate: 3.9%
- Current Population: 8,537,509
- Households: 3,106,565
- Median Household Income: $91,830
Population, Labor, and Income Growth
Source: CoStar Group, Inc.
Dallas–Fort Worth entered Q4 2025 as one of the nation’s most resilient major economies, powered by strong business fundamentals, diverse industries, and sustained population growth. The region’s 8.3 million residents reflect long-term expansion, which continue to attract families with strong schools and relative affordability. DFW remains the national leader in domestic in-migration and a top destination for corporate relocations, supporting a deep employment base across energy, logistics, healthcare, and finance. With 24 Fortune 500 headquarters, expanding financial campuses, and world-class infrastructure anchored by DFW International Airport, the metro maintains strong job creation and broad economic stability despite slower national momentum.
DFW Industrial Supply & Demand Dynamics
Source: CoStar Group, Inc.
DFW Industrial Construction
Dallas-Fort Worth’s industrial construction market in Q4 2025 reflects a shift toward a more measured pipeline after years of aggressive expansion. Despite expectations of moderation, groundbreakings picked up in mid-2025, contributing to a still-elevated 35.6 million SF pipeline with less than half pre-leased. Since 2020, the region has added 239 million SF, nearly a quarter still vacant, fueling persistently high vacancies. Developers initially moved toward smaller projects, but 2025 saw a return to larger 250,000-SF logistics starts, especially near DFW Airport, where oversupply remains acute. Performance varies sharply by submarket, with areas like Alliance seeing strong absorption while Southeast Dallas continues to struggle with slow lease-up.
SF Construction Starts
Source: CoStar Group, Inc.
SF Under Construction
Source: CoStar Group, Inc.
DFW Industrial Sales
Market sentiment around Dallas-Fort Worth’s industrial sector remains constructive, with participants viewing 2025 as a return to a more normalized expansion cycle. Early vacancy improvements, particularly in North Tarrant/Alliance, reinforced confidence despite midyear hesitation tied to trade policy uncertainty. Investor activity strengthened in Q3 2025, producing one of the strongest sales quarters in five years and keeping annual volume near historical norms at $2.6 billion. Inventory turnover has recovered to its long-term average, signaling healthy market liquidity. Buyers remain active but selective, favoring high-quality logistics assets. Institutional capital has reasserted leadership, and while higher vacancies in investment-grade properties may drive near-term sales, softer rent growth continues to challenge deal underwriting.
DFW Industrial Sales Volume
Source: CoStar Group, Inc.
By the Numbers
Source: CoStar Group, Inc.
- Sales Volume: $34.8M
- Price Per SF: $141
- Cap Rate: 6.2%
- Vacancy Rate: 8.9%
- Rent Growth: 4.4%
- Asking Rent Per SF: $10.12
- SF Under Construction: 39.2M
- SF Delivered: 3M
- SF Absorbed: 4.9M
