Industrial Warehouse Rent Determinants in the Dallas/Fort Worth Area

Abstract

This paper presents the first empirical analysis of the determinants of pooled variation in industrial warehouse rents. It examines industrial warehouse rents using data for seventeen quarterly periods in the Dallas/Fort Worth metroplex. M/PF Research Inc. provided the data. A random effects model is used to estimate the relationship between market rents for industrial properties and various independent variables. Rent per square foot is positively related to the number of grade high doors, and the annual change in net employment. Rent per square foot is negatively effected by ceiling height, percentage of office space, building age, and the presence of a sprinkler system. The results indicate that rents are significantly impacted by physical characteristics, location, and general market conditions. Additionally, there is evidence to suggest that the relationship between physical characteristics and rents is nonlinear.