Texas Cities Top Hottest New Industrial Real Estate Markets for Warehousing

Commercial real estate firm JLL just announced the top ten markets for warehouses. Released in late June, the firm linked both industrial real estate and population growth to determine which markets are expected to boom in coming years.

For the last three years, Houston, Dallas, Inland Empire, outside Los Angeles, and Atlanta have grown their industrial market size by 10%. These are areas where there is still buildable land available for warehouse development. By population growth alone, Houston is expected to outpace all of the top ten markets: The city is projected to grow its population by 11% by 2022.Gillam Campbell, JLL research manager, said the growth possibilities in Texas alone are significant.

“Houston and Dallas are already huge population centers…with so much more growth projected there,” she said. “This makes for great opportunities for new investing. The trend of population migration in the U.S. to Sunbelt areas is really apparent [in Texas].”

The second cluster of markets where warehousing opportunities are ripe are Los Angeles, New Jersey, Seattle, and South Florida, due to their coastal access. However, these areas face challenges — high rents, lack of readily available buildable land — which has slowed inventory growth in recent years. In these areas, developers are expected to get creative by building new multistory warehouses to accommodate demand.

Finally, Chicago and Pennsylvania round out the list where both population and industrial market growth are rising.

Besides Houston, population growth projections for 2022 include: Dallas at 8%; Atlanta at 5.8%; Seattle at 5.2%, Los Angeles at 4.7%, Inland Empire at 4.3%, New Jersey at 4%; South Florida at 3.6%; Eastern and Central Pennsylvania at 3.4%; and Chicago at 2.9%.

What continues to make these markets viable is that they represent, or are near, large population hubs. That’s key as the demand for same- or next-day delivery continues to increase. These industrial real estate markets will continue to valuable, but the challenges developers will face is how to design new warehouses in either repurposed or dense spaces.

How have your warehousing needs changed in recent years? Do you expect to expand your facilities in new markets? Please let us know in the comments below!

Recent Blog

Table of Contents