The warehouse building boom continues but net leasing is beginning to slow.

The construction of industrial buildings in North Texas is not slowing down.

However, there are indications that the demand for warehouse space is declining.

Cushman & Wakefield, a commercial property firm, reported that almost 75 million square feet of warehouse and distribution space was under construction in Dallas-Fort Worth at the end of the first quarter.

The majority of the construction activity was in southern Dallas County (16.9 million square feet), the Alliance area north of Fort Worth (15 million square feet), and eastern Dallas County (7.8 million square feet).

More than 14 million square feet of warehouse projects were finished in the area in the first three months of 2023.

That was much more than the net leasing of 4.6 million square feet.

David Eseke, Cushman & Wakefield executive managing director, said in a statement that “Absorption in the first quarter was closer to those of first quarter 2019 than the record-setting figures in 2021 and 2022.”

He said that the demand for large-scale space of 300,000 square feet or more is slowing down. “We’d expect vacancy to ramp up,” he said.

Only about 5.5% of D-FW warehouse space was vacant at the end of March.

The biggest warehouse leases in the area in the first quarter were by DSV Global Transport and Logistics (1,003,000 square feet), Hayes Co. (904,495 square feet), and Blue Triton (603,378 square feet).

Southern Dallas County, with 2.3 million square feet of net leasing, and the Alliance area, with 1.8 million square feet, saw the most industrial demand so far in 2023.

Construction and development delays are adding to lead times for some warehouse tenants, Eseke said.

“A trend we continue to see is the lengthening of the occupancy process,” he said. “Delays in permitting and some critical construction items are preventing tenants from moving in as fast as they’d like to.”