Part E-Commerce, Part Expertise: How Dallas Became An Industrial Powerhouse

Shiny office buildings and a slew of new corporate headquarters have dominated recent real estate headlines in Dallas. But despite all its glitz, office development is no longer the region's largest source of growth. That distinction now belongs to the industrial sector.

The DFW Metroplex has ballooned into the nation’s fourth-largest industrial market. It offers an ideal mixture of available land, a business-friendly environment and consumer demographics. Thanks to the rise of e-commerce, demand for industrial space in DFW has reached unprecedented levels. The challenge has become delivering warehouse space as fast as possible. Yet none of this has caught Dallas off guard — this is the culmination of almost a century of work.

“Dallas has always been a pioneer in industrial development,” said Greg Gordon, the founder and president of Gordon Highlander, a Dallas design-build and tenant construction firm. "The magic of Dallas is that we have a world-class community of architects, developers, contractors and subcontractors."

In the late 1940s, Trammell Crow pioneered the development of speculative warehouses in DFW. He grew to become one of the largest multi-sector developers in the nation. Gordon's father worked for Trammell Crow; having grown up in the industrial business, Gordon leveraged his father’s project management experience when he founded his own firm in 2007. A generation has passed, but a tight-knit group of builders lives on, Gordon said.

Along with this community, DFW offers large tracts for development and little in the way of bureaucratic red tape. Zoning regulations and property taxes are minimal compared to other major cities.

“There’s very little bureaucracy in the DFW area,” Gordon said. “Pro-business taxes and incentives make the region attractive. Many companies from California and other parts of the West Coast have migrated to DFW just looking for greener pastures."

But one trend has forever changed the face of industrial real estate in DFW, Gordon said.

"The boom right now is a confluence of factors — our history, our expertise, the local environment, the business migration to Dallas, but most of all e-commerce."

As online sales and the demand for rapid delivery have grown, companies have moved distribution warehouses closer to urban hubs. And now, as more consumers send back the products they buy, companies need not only a distribution center but also a reverse logistics center to take care of stacks of returns.

The result is that developers are building warehouse space in the DFW area on spec at record-breaking rates, hoping to capture a tenant that needs to move as soon as possible.

"Developers are building mega-warehouses without ever having had a conversation with a potential tenant,” Gordon said. “When a developer secures a tenant, they come to us and say ‘we need to move in yesterday.’ So what we pride ourselves on is working diligently to build out those spaces as soon as possible, for whatever they need.”

As the sophistication of the industrial sector grows, so do the speed bumps. Gordon said there are more stakeholders than ever before in any industrial project. If handled improperly, the coordination efforts can slow a project down to a crawl.

“Everyone used to just have one representative at the table — now there are dozens of stakeholders on every team,” Gordon said. “We’re dealing with subcontractors, IT people, HR people, health and safety people. The more people you have around the table, the harder it is to avoid delays.”

Avoiding delays requires smart team building, clever planning and agile project management. Gordon said he has learned and studied the DFW industrial environment to build the right team for every kind of project. Gordon Highlander has invested heavily in communication technology to speed the build-out process and ensure that all parties remain on the same page.

“Having a hot market like Dallas’ means you need contractors that are responsive, agile and adaptive,” Gordon said. “But I’d say that our city has found a formula that works. Companies moving to DFW are just blown away by how fast things get done here.”

This feature was produced in collaboration between Bisnow Branded Content and Gordon Highlander. Bisnow news staff was not involved in the production of this content.