Q&A WITH DAVID GUINN, DB2RE

What is the state of play within the DFW IOS market?

Everything is bigger in Texas — and the Dallas-Fort Worth industrial market is a perfect example of that. We’re fortunate to operate in what I believe is the best industrial market in the country. The amount of growth, capital, and tenant demand we’ve seen over the last several years is hard to replicate anywhere else.

You’ve got the highest population growth in the country, “Y’all Street” gaining real traction, and a massive pipeline of infrastructure and development projects, from the expansion at DFW Airport to billions of dollars being deployed across the Metroplex. That’s what is fueling the growth we’re seeing here. It’s constant, it’s real, and it’s happening at a scale most markets simply can’t match.

DFW has delivered an enormous amount of new industrial supply. Instead of breaking the market, it’s being absorbed. Vacancy has started to come down, leasing activity remains strong, and users continue to make real, long-term commitments to the market. At the same time, we’re building more data centers here than anywhere else in the country, which is creating an entirely new layer of demand from contractors, electrical companies, and supply groups that support that infrastructure.

IOS properties are a direct extension of that broader industrial ecosystem growth. When industrial and infrastructure scale like this, IOS demand follows.

From a DFW perspective, the last 12-18 months have really been a story of separation more than anything else.

We didn’t lose demand. We lost the margin for error.

There are still plenty of users out there (roofing supply, trucking, contractors, equipment rental), but they’re more selective, and capital is a lot more disciplined behind them. Investors are more in tune with the tenants’ specific needs and the buy boxes have adjusted accordingly.

Today, the difference between a good IOS site and an average one is obvious. Functional, high-quality sites in the right locations with real access and usable yard are smashing benchmarks on rate and time to occupancy. Everything else is taking longer to lease, getting pushed on pricing, or both.

At the end of the day, the reason DFW is such an incredible market to work in is the sheer size and scale of it. The Metroplex is larger than the state of Rhode Island, and our population here is larger than 39 states in the U.S.

Even after 11 years in this market, I still come across streets I’ve never seen before, and we’re uncovering new supply almost daily.

That’s why DFW works.

What trends are you noticing in your market over the last 12 months?

I’ve seen the goal post moved SIGNIFICANTLY on basis over last six months, particularly around the largest institutional investors’ acceptance of true replacement cost for high-quality mid-tier maintenance facilities. Example: Investor X buys an infill, vacant 20,000 SF building on 3 paved acres and leases it to United Rentals for $450,000 a year. Waits a year and a day and sells it for a 6.5% cap rate. Historically, investors would push back on that basis, asking, “Who will I sell it to next?” We’ve now seen multiple deals like this close since January.

It’s not groundbreaking new information that the supply (or, really, scarcity) of functional, high-quality, infill facilities like this is still the biggest constraint and driver of value in IOS right now. IOS isn’t hard because of capital interest. It’s hard because of zoning, entitlement friction, and cities not wanting it. That hasn’t changed, and it’s a big reason why good products continue to outperform and what credit tenants are flocking too.

It’s why you’re seeing cap rates on high-quality IOS leased to credit tenants, compressed to levels below just about any other asset class in DFW.

If you’re going to build new supply ground up, these projects are too small for GC’s compared to traditional class-A development. Not to mention, it takes a minimum of 18-24 months from start to finish to get through the process.  

But now the goalpost (acceptance of basis) has moved from an investor standpoint, and you’re starting to see something we really haven’t seen much of in the past — groups beginning to build IOS on a speculative basis. That’s already happening, and I think you’ll see more of it moving forward.

You keep referencing “quality sites” in relation to leasing. Help me understand the “WHY” behind what credit tenants are leasing here.

Let’s use equipment rental as an example. I recently spoke with a former Market Growth Officer from a large operator with 180+ locations, and the way they underwrite sites is very instructive.

They analyze major markets like DFW on a territory-by-territory basis, carving up the Metroplex so each sales rep has enough local density to hit their number while keeping hauling efficiency high. In Dallas, it’s not uncommon for a single location to support $40 million in original equipment cost (OEC) at roughly 70% utilization. That’s not an exact science, but it generally works out to about $10 million of OEC per acre — meaning these users are often looking for right around 4 acres of functional, paved yard. That same volume typically generates about $8 million in annual gross revenue. If they want to keep rent in the 5–5.5% range of gross revenue, that works out to roughly $33,500–37,000 per month in rent. That’s real “chunk rent,” and it explains why they’re willing to pay strong numbers for the right functional yard.

They look for buildings with at least four bays, 18-foot+ clear height (to service earthmoving equipment), and about 25% office. Highway frontage isn’t important - their customers don’t come to them. What matters most is solid ingress/egress and a smart site layout (building positioned front-to-middle with a loop so trucks can drive in one side and out the other).

They own only about 10% of their locations and lease the rest. Capital is better spent on fleet and people. They’ll take shorter three-year deals when needed, but they strongly prefer 10-year base terms with multiple extension options.

At the end of the day, it’s still a relationship business — but the decisions are very data-driven and investors are getting smarter on this and it’s why these types of sites always lease and lease quickly.

Have any new user types emerged in the DFW market?

• Data center / infrastructure construction companies / electrical-related users

  • The revenue of these companies has exploded in the last year and will continue to do so — their “chunk rent” acceptance has driven larger leases.

• More activity tied to fleet expansion and logistics support

• Continued demand from utilities and service-based businesses

The common theme is these are still operational businesses that require a yard. They are just becoming more specialized in how they use it.

Even after 15+ years in the space, we’re still coming across new IOS-driven users on a regular basis. That tells you more about the depth of demand than anything else.

Any notable transactions that you would like to share?

Going to keep this somewhat condensed and not give away too much information, but a few transactions really stand out and reflect where the market is today.

SALES

Project Delta IOS Portfolio Sale (DFW)

• 8 assets totaling ~44 acres

• ~100% leased

• Seller: CanTex Capital

• Buyer: Joey Dealz – Stockbridge

• Broker: Nick Murphy, Eastdil

Why it matters:
One of the first true IOS portfolio sales in DFW that helped establish real pricing benchmarks for scaled IOS. It created data points that others are already starting to follow.

4700 Singleton Blvd – Dallas, TX

• 46,800 SF on 4.7 paved acres

• NNN leased investment sale to Nucor Harris

• Buyer: Ambient Capital

• Seller: Four Corners Property

• Brokers: David Guinn & Philip Cherrick

10 Roads Express Portfolio – Nationwide across 10 states

• 12-site portfolio acquired directly from user

• Sites located throughout the U.S.

• Value-add lease-up strategy post-closing

• Buyer: Jadian IOS

• Broker – Chris Sipple and Wade Cox – IREP

• 2 sites in DFW – 4401 Deen Road and 1936 W Commerce Street are currently listed for lease with Davidson Bogel – contact David Guinn, Martin Grossman, or Philip Cherrick for more information.

Blue Dragon Portfolio – Texas

• 7-site IOS portfolio across Texas

• Buyer: Transport Properties

• Broker: Alex Wilson, Lee & Associates

1085 E Jarvis Rd – Saginaw, TX

• 15,000 SF on 60 paved acres

• NNN leased investment sale

• Buyer: Bricktop Capital

• Brokers: David Guinn, Austin Russell, Martin Grossman & Cameron Deptula – DB2RE

2320–2330 E Union Bower – Irving, TX

• Buyer: Ambient Capital

• Brokers: Kevin Santillaria & Chris Wong

2959 Irving Blvd & 9773 Harry Hines – Dallas, TX

• 2-asset portfolio sale

• 29,993 SF shop on 5.3 acres

• 17,400 SF building on 6.57 acres

• 100% leased

• Buyer: Dalfen Industrial

• Broker: Chris Wong, Partners

1301 E Wintergreen – Hutchins, TX

• 22,000 SF on 7.93 acres

• Long-term NNN lease in place

• Buyer: IOV

• Seller: Provident

• Broker: Elliot Dow, CBRE

LEASES

6800 S IH-45 – Wilmer, TX

• 103,000 SF on ~33 usable acres

• Single-tenant, 10-year lease to undisclosed infrastructure-related national credit user

• Landlord: Transport Properties

• Brokers: David Guinn & Martin Grossman

Why it matters:
Largest IOS lease completed in DFW history and a strong example of continued demand from infrastructure-related users for large-scale, functional IOS.

2909 E Abram Street – Arlington, TX

• 16.34 paved acres with 34,000 SF building

• National credit tenant

• Landlord: Alterra

520 E Oakdale Rd – Grand Prairie, TX

• 14,790 SF building on 10.71 acres

• National credit tenant

• Landlord: Triten

• Brokers: David Guinn, Martin Grossman, Chris Wong & Logan Weatherford

2414 Country Club Drive – Carrollton, TX

• 134,000 SF on 22 acres

• National credit tenant

• Landlord: Private

• Broker: Rich Young Jr. – Rich Young Companies

As we look ahead to the second half of 2026, what is your forecast for transaction volume and pricing?

We expect transaction volume to pick up modestly in the back half of 2026.

There’s still plenty of capital looking to get into IOS, but it’s more disciplined than it was a few years ago. Groups are focused on the right product and not forcing deals just to deploy capital. The highest-quality sites will continue to see cap rate compression, while overall transaction volume should remain steady.

From a pricing standpoint:

• Core, functional IOS should remain stable to slightly improving

• Fringe product will continue to adjust

The bigger picture is pretty simple: Demand isn’t the issue. Supply isn’t getting easier, and capital is getting smarter.

That combination should continue to favor well-located, functional IOS moving forward.

FOR SALE AND LEASE

9,600 SF Shop | 7.68 Acres Improved | Fronting IH Loop 12