Creation and PGIM Real Estate have begun construction on a 600,000-square-foot logistics hub in Dallas. The development, named 635 Exchange, is being built on a 36-acre site that previously served as a City of Dallas landfill at 11535 Newberry Street. The project is scheduled for completion next fall.
The partnership between Dallas-based developer Creation and PGIM, the asset management arm of Prudential Financial, secured a $65.5 million construction loan for the venture. JLL Capital Markets facilitated the financing arrangement.
The new logistics center will consist of three buildings and is located near the intersection of Interstates 35 and 635 in northwest Dallas. Its location provides direct access to DFW International Airport.
At the groundbreaking event, Creation donated $25,000 to CLC Inc.’s YouthBuild project, which supports education and job training for at-risk youth.
PGIM’s Soultana Reigle commented on the timing of the project: “We expect it to benefit from structural tailwinds in supply-chain optimization and e-commerce demand.”
Dallas-Fort Worth’s industrial real estate market remains strong despite a recent increase in vacancy rates. The region has experienced positive absorption of industrial space for 60 consecutive quarters, according to CBRE data. In the third quarter, less than three percent of new deliveries were pre-leased, contributing to a rise in vacancy rates by 20 basis points to nine percent. However, this rate may decline as pre-leased products under development increased from 18.4 percent to 40 percent by quarter’s end.
Manufacturing activity accounted for most leasing demand during the period. South Dallas and Northwest Fort Worth are currently among the most sought-after submarkets for industrial space in the area.
