Too Many Tenants? Why Dallas and Houston Are Still Seeing Heavy Industrial Development

In 2025, Dallas and Houston, Texas, together delivered about 62 million square feet of industrial space, bringing development back to normal cycle levels.

What drove construction activity?

 Tenant demand remained strong, allowing developers to continue breaking ground and restore typical development pace.

Dallas–Fort Worth

The DFW market typically delivers around 32 million square feet annually in a normal cycle.

 In 2025, total volume aligned with that baseline, while development mix shifted.

 Speculative projects still dominated, but build-to-suit and owner-occupied facilities increased, especially in bulk logistics.

Examples include Amazon’s 1.7-million-square-foot facility in Cleburne (started November 2024).

 Construction activity moved away from South Dallas toward Northeast Tarrant County, the Alliance area, and sites near DFW Airport, where financing remains more reliable.

As of early 2026, large logistics projects under construction show about 65% availability, with Alliance Westport 24 (1.1 million sq ft) delivering in Q1 2026.

Houston

Houston’s industrial starts reached a three-year high in 2025, with over 29 million square feet breaking ground—about 50% above 2024.

 Roughly 27 million square feet is currently under construction, 75% available, primarily big-box logistics.

Over the past five years, Houston’s logistics inventory over 100,000 sq ft has grown more than 30%.

Construction is concentrated in Southeast Houston near the Port of Houston, where the East–Southeast Far submarket has nearly 6 million sq ft underway.

 Key projects include DC 10 in Baytown (421,000 sq ft) and Baywood Logistics in Pasadena (375,000 sq ft).

The Port of Houston and Beltway 8 continue to define Houston’s industrial development pattern, concentrating new supply along major trade and transportation corridors.