The headline
DFW industrial vacancy crossed 10.2% in Q2 2026 — the highest the market has seen since 2014. That number alone doesn't tell the story. The composition of that vacancy matters, the speed of the move matters, and the landlord behavior underneath it matters more than any of it.
From mid-2021 through Q3 2024, this was the tightest industrial market in the country. Bulk space at 4.8% vacancy. Landlords doing one-shot lease terms with no concessions. Tenants taking buildings they didn't really want because the alternative was no building at all. Three years of that conditioned every operator in the metro to expect bad terms. Most of them haven't updated their assumptions yet — and that gap is the opportunity.
What the numbers actually say
| Submarket | Q2 2026 Vacancy | YoY Change | Avg. Concession (mo) |
|---|---|---|---|
| Alliance / North Fort Worth | 11.8% | +4.2 pp | 4–8 |
| South Dallas | 9.4% | +2.9 pp | 3–6 |
| DFW Airport | 8.1% | +1.6 pp | 2–5 |
| Lewisville / Coppell | 7.7% | +2.1 pp | 3–6 |
| Northeast Tarrant | 12.6% | +5.0 pp | 5–9 |
| South Stemmons | 9.1% | +2.4 pp | 3–5 |
The most important column is the rightmost one. Two years ago, concession packages in this market were 0–2 months free on five-year terms. Today, in Alliance and Northeast Tarrant, landlords are quietly underwriting 6–8 months. They aren't publishing it. Their LOIs still come out at 1–2 months. They expect you to ask. Most tenants don't.
Three things that changed simultaneously
1. Spec deliveries finally caught up
Developers approved a record pipeline in 2021–2022 when bulk space was leasing in 4 months. Most of that product delivered in late 2024 and through 2025. Roughly 38 million SF of bulk space hit the market in an 18-month window. That's the supply side.
2. E-commerce growth normalized
The pandemic-era assumption was that e-commerce penetration would keep growing at the 2020–2022 rate forever. It didn't. The big 3PLs and direct-to-consumer operators that drove the previous cycle's net absorption slowed their footprint additions in 2024 and contracted modestly in 2025. The demand side moved at the same time supply landed.
3. Higher rates pressured landlord economics
Most of this product was capitalized at 2021–2022 cap rates and refinanced (or scheduled to refinance) in 2025–2026 at materially higher debt costs. Landlords need occupancy. A vacant building doesn't service its debt. The discipline that produced minimal concessions in 2022 evaporates quickly when the refinancing window closes.
Where the leverage actually is
Vacancy isn't uniform across product types, and the leverage isn't either. The big shift is concentrated in three categories:
Class A bulk (250,000 SF and above). This is where the new supply landed. Landlord LOIs in Alliance are coming out at 5–10% below mid-2024 asking, and the concession packages are stackable in ways they weren't 18 months ago. Free rent, TI dollars, expansion rights, and termination options can all be negotiated in the same deal — not just one or the other.
Older mid-bay (50,000–150,000 SF) in proximity to Class A spec. When new Class A floods a submarket, landlords of 10–20-year-old mid-bay product lose tenants and have to compete on price. This category is where the deepest discounts are right now — sometimes 15% below ask plus 6+ months free.
Sublease. Sublease availability in DFW industrial doubled between Q4 2024 and Q2 2026. The 3PLs and e-commerce tenants that over-leased during the boom are now trying to recover sunk capital. Sublease deals are dilutive to landlord economics and they hate them — which means landlords are increasingly willing to offer their own concessions just to keep tenants from listing space they don't need.
What hasn't changed
It's worth being honest about what this report isn't saying. DFW industrial is not in distress. Net absorption is still positive on a trailing twelve-month basis. The labor draw, port access, and tax environment that made this market the best industrial market in the country for the last decade haven't changed. Rents are correcting, not collapsing. Concessions are returning to mid-cycle norms, not late-cycle desperation.
The leverage shift is also asymmetric across submarkets. Northeast Tarrant and Alliance are notably tenant-friendly right now. South Stemmons and DFW Airport are still relatively balanced. Lewisville-Coppell sits in between. A national tenant looking at the metro should not assume the leverage is the same everywhere — the discipline of comparing submarket-by-submarket is back.
The window
This part is the actionable piece. The leverage that exists today exists because of a specific supply-and-demand mismatch driven by a specific 18-month delivery window. That window is closing. New construction starts have collapsed — fewer than 8 million SF broke ground in the first half of 2026, compared to 28 million SF in the same period of 2022. The supply faucet is shutting.
When the next absorption cycle picks up — driven by reshoring, e-commerce recovery, or any of three other plausible drivers — vacancy will tighten again. Most analysts modeling DFW industrial expect submarket vacancies to begin contracting by Q4 2027 and to be back below 7% by 2029.
That's the window. If you have lease decisions in the next 18 months — renewals, relocations, expansions, or new market entries — the negotiating environment today will be materially better than the environment 24 months from now.
What to do this quarter
- Pull your lease expiration schedule and look 24 months out. Not 12. Any lease expiring before late 2028 should be in a negotiation conversation now.
- Don't negotiate from the landlord's LOI. The headline concessions in landlord-issued LOIs lag market by 60–90 days right now. Treat the LOI as the starting point, not a fair offer.
- Run multi-building competition explicitly. In a tenant-friendly market, the landlord knows other landlords are quoting aggressively. Make sure they know you know.
- Don't only negotiate rent. Free rent, TI dollars, op-ex caps, expansion rights, and termination options are all in play right now. A deal that looks even on rent can be deeply tenant-friendly on the rest of the package.
- Watch for landlord concession reversal signals. Cap rate compression, M&A activity in DFW landlord portfolios, and new construction restarts are all signals that the window is closing. Set up alerts.
Methodology and sources
Vacancy figures aggregate CoStar Q2 2026 submarket data, internal Craft Commercial broker quotes, and a cross-section of LOIs we've reviewed in the last 90 days. Concession ranges reflect what we are actually negotiating, not what landlords are publishing. Submarket boundaries follow the standard NAIOP DFW classification. This report is updated quarterly. Subscribe to the Tenant Brief on the Insights page to get the next one delivered.