Lower Deal Volume and Shifting Buyer Profiles Suggest Off-Market Deals Driving Activity
The industrial real estate market in Dallas-Fort Worth (DFW) saw a notable slowdown in 2024, with property turnover declining significantly. This trend has brought changes to the way investors navigate the market, as fewer deals and shifting buyer profiles suggest off-market activity is playing a bigger role than ever before.
Periods of low transaction activity in industrial properties often create a foggy picture for capital markets. It’s as if only small windows allow glimpses of what’s happening behind the scenes. For investors in DFW—or any major market in a non-disclosure state—this opacity is a familiar challenge. To adapt, they’ve turned to creative ways to benchmark market activity.
Tracking Turnover to Gauge Market Health
When direct pricing data is hard to come by, analyzing inventory turnover becomes a reliable alternative. Measuring how much industrial space is changing hands provides a way to determine whether deals have truly dried up or if they’re simply happening out of public view.
By smoothing out the data, we can filter out the noise caused by quarterly fluctuations, such as peaks from large portfolio sales. A 12-month average reveals that industrial property turnover in DFW hit its high point in mid-2022, with 2.5% of the market’s inventory being transacted. This peak coincided with a surge in transaction values as deals flourished across North Texas.
Fast forward to 2024, and the landscape looks very different. Transaction volumes and values have dropped significantly, and turnover has followed suit, falling to just 1.2%. This figure is less than half of the 2022 peak and well below the pre-pandemic historic norm of around 2%.
What’s Behind the Decline?
The drop in visible market activity can be attributed to several factors. For one, higher borrowing costs have created headwinds for deals, particularly for institutional players who previously dominated the market. In their place, private capital—including private equity fund managers, individual investors, and family offices—has stepped in to fill the gap.
These more agile, liquidity-rich buyers are well-positioned to negotiate favorable pricing and close deals that might otherwise stall. Many of these transactions are happening off-market, further obscuring the true level of market activity. For example, sale-leaseback agreements have become an increasingly popular strategy as companies look for creative ways to unlock liquidity while retaining operational control of their properties.
A Look Ahead
The decline in industrial property turnover in DFW reflects broader market adjustments, but it’s not a signal of inactivity—rather, it’s a shift in how deals are being made. Off-market activity, driven by private capital and alternative financing strategies, is reshaping the market landscape.
As the market adapts to these new dynamics, investors who stay attuned to these changes will be better equipped to uncover opportunities and navigate the challenges ahead. While the fog may make it harder to see what’s on the horizon, one thing is clear: the DFW industrial market is still very much alive, just evolving in ways that reward creativity and resourcefulness.
