Industrial Last-Mile Premium Index

4 Star Industrial Distribution

Introduction

Industrial real estate has entered a new phase where last-mile logistics facilities in infill submarkets command significant rent premiums and record-low vacancies. This article examines the Industrial Last-Mile Premium Index for two powerhouse distribution markets – Dallas–Fort Worth (DFW) and Northern New Jersey (NJ) – using a submarket “leaderboard” format. We compare rent premiums, vacancy rates, and absorption across key submarkets in each metro, presenting data-driven insights in an accessible yet analytical tone. By aligning with trends reported in brokerage research and 3PL publications, we aim to highlight how infill warehousing hubs near consumers (the “last mile”) are outperforming broader markets on critical metrics. Below, we break down the top submarkets in DFW and Northern NJ for rent, vacancy, and absorption, complete with tables and expert commentary for context.

Rent Premiums in Infill Submarkets

Location drives rent: Well-located infill submarkets near population centers and transport nodes are achieving outsized rent levels compared to broader market averages. In Dallas–Fort Worth, average industrial asking rents are around $9–$10 per sq. ft. annually, but infill areas command significantly higher rates. For example, submarkets like DFW Airport and the Stemmons Corridor (near central Dallas) see asking rents above $12 per sq. ft., roughly a 25% premium over the metro average. Similarly in Northern New Jersey, overall industrial rents have hovered in the mid-teens per sq. ft., with recent averages around $13.80–$14.00 NNN. Yet premier “last-mile” submarkets like the Meadowlands (near New York City) and Port Newark/Elizabeth routinely exceed $17 per sq. ft., roughly 20–25% higher than the regional average. This rent premium reflects intense demand for proximity to consumers and limited land supply in these infill locations.

To illustrate the rent premium gap, below is a leaderboard of top submarket asking rents in each metro (Q3 2025 data):

Top DFW Submarkets (High Rent)	Asking Rent (NNN)	Top N. NJ Submarkets (High Rent)	Asking Rent (NNN)
DFW Airport (Metro Average: $9.63)	$12.17/SF	Meadowlands (Metro Avg: ~$14)	~$17.00/SF
South Stemmons (Dallas infill)	$12.01/SF	Port Newark/Elizabeth (Ports)	~$17.00/SF
Northwest Dallas (DFW NW Highway area)	$11.56/SF	NJ Turnpike Exit 8A (Central NJ hub)	~$16.50/SF

Table 1: Industrial asking rents in 2025 for top “last-mile” submarkets in Dallas–Fort Worth vs. Northern New Jersey. Infill locations near consumers/transport command a sizable rent premium over their metro’s average.

As shown above, DFW’s highest rents are around $12 NNN, found in centrally located submarkets (e.g. near DFW International Airport and urban Dallas). In contrast, Northern New Jersey’s top infill submarkets achieve mid-$16 to $17 NNN asking rents – notably higher in absolute terms. This reflects the high-barrier-to-entry nature of the New York/New Jersey metro. In fact, research by Prologis found that sites just 10 miles from Manhattan command rents that are 3.5× the New York metro average, up from 2.8× only a few years ago. While DFW’s more abundant land keeps a lid on extreme rent multiples, there is still a clear internal premium for urban-core logistics space. DFW’s outlying big-box markets (e.g. South Dallas) have asking rents as low as $6–$7/SF, whereas its infill and airport-proximate facilities fetch double those rates. Likewise, in New Jersey, landlords in constrained infill areas can maintain higher pricing, whereas more peripheral submarkets (e.g. exits 7A or 9 on the Turnpike) see somewhat lower rents. Notably, landlords in 2025 showed a willingness to prioritize occupancy over rent growth in both markets, given the recent supply expansion. Northern NJ’s average asking rent actually declined a few percent from its 2023 peak as some owners moderated pricing to fill space. Even so, the rent premium for last-mile locations remains firmly intact due to their strategic value.

Vacancy Rates: Tight vs. Soft Submarkets

Vacancy rates paint a tale of two market dynamics: infill submarkets tend to have tight occupancy despite new supply, while emerging fringe submarkets grapple with higher vacancies. In Dallas–Fort Worth, the overall industrial vacancy is about 9.0% – a historically healthy level considering the 1.16 billion SF inventory and massive construction of recent years. Many DFW submarkets saw vacancy stabilize or even dip in late 2025 as strong absorption kept pace with deliveries. However, vacancy is uneven across the metro. Older, built-out submarkets near the city center often have below-average vacancy. For instance, Northeast Dallas and the South Stemmons corridor are in the 6–7% vacancy range, indicating tight conditions. By contrast, the South Dallas submarket – a hotspot of new mega-warehouse development – had a double-digit vacancy (~10–11%) as of Q3 2025. DFW Airport’s submarket also hovered around 11% vacant due to a wave of big spec projects delivering, even though it boasts top rents. In short, infill locations in DFW have lower vacancy relative to the sprawling fringe, but the metro’s rapid supply growth has kept even infill vacancy higher than coastal market norms.

Northern New Jersey, being a high-demand coastal market, historically had extremely tight vacancies – dipping to a record-low ~2% in 2022. As of 2025, vacancy has risen off those lows but remains moderate at ~6–7%. CBRE reported Northern/Central NJ’s industrial vacancy held around 7.2% in Q3 2025 after ten quarters of increase, finally stabilizing as absorption turned positive. That regional figure masks wide variation: some infill submarkets are still very tight (under 5% vacant), while areas that absorbed heavy new development (e.g. the Turnpike Exit 9/Brunswick area) saw vacancies approach 9–10%. The leaderboard below lists low-vacancy submarkets in each region:

Low Vacancy – DFW Submarket	Vacancy Rate	Low Vacancy – N. NJ Submarket	Vacancy Rate
Northeast Dallas (infill)	6.7%	Northern Bergen County (NYC border)	3.6%
South Stemmons (Dallas infill)	7.3%	Suburban Essex (Newark Area)	4.0%
North Fort Worth (Alliance hub)	7.9%	Route 46/23/3 Corridor (Passaic/Bergen)	4.9%

Table 2: Submarkets with some of the lowest industrial vacancy rates in DFW and Northern NJ (Q3 2025). Urban-proximate and supply-constrained areas show significantly tighter vacancy.

Northern New Jersey’s tightest pockets (e.g. Bergen County and Essex County submarkets) remain under 5% vacant, underscoring the persistent supply/demand imbalance in close-in locations. Even as the overall market vacancy climbed from historic lows, tenant demand from 3PLs and distribution users helped temper the rise in vacancy. In the words of one market report, “Demand from logistics and distribution firms and 3PL companies has helped to temper a spike in vacancy.” Landlords in core Northern NJ have a cushion of demand, allowing them to hold vacancies near frictional levels (3–5%) even in a softening cycle. On the other hand, previously ultra-tight submarkets along the Turnpike saw more slack by 2025. For example, the Exit 8A submarket’s vacancy jumped by 430 bps year-over-year by mid-2025 amid a wave of new construction and sublease space. Available sublease space in NJ ballooned to over 11 million sq. ft. as some occupiers shed space. Much of this sublease glut is in modern Class A warehouses offered at a 20% rent discount to direct space, which put some upward pressure on vacancy and downward pressure on asking rents.

Dallas–Fort Worth likewise has a notable sublease component: about 10.5% of available space in DFW is sublease offered at discounted rates. This has provided tenants with more options and kept effective rents competitive in oversupplied pockets. The highest vacancies in DFW (e.g. 13% in East Dallas and 10–11% in South Dallas) are largely a result of rapid construction overshooting demand in certain corridors. Encouragingly, by late 2025 there were signs that vacancies had peaked and begun to stabilize in both markets. DFW’s overall vacancy actually ticked down year-over-year from ~9.5% to ~9.1%, and Northern NJ held in the mid-6% range for multiple quarters. In short, last-mile submarkets in both metros continue to enjoy low vacancies relative to their broader markets, thanks to strong tenant demand and limited land for new construction.

“New Jersey’s industrial market remains resilient despite ongoing challenges,” said Felix Soto, senior research analyst at Cushman & Wakefield. “Submarkets such as Port South and the Meadowlands continue to see robust leasing activity, highlighting their strategic value and appeal for modern warehouse and distribution spaces.”

This expert observation underscores that even as vacancy has risen off historic lows, the core infill submarkets (like those around the Port and the Meadowlands in NJ) are sustaining healthy occupancy through robust leasing. A similar dynamic is evident in Dallas–Fort Worth: for instance, the Alliance/North Fort Worth area – with its intermodal hubs – continues to attract major tenants, keeping its vacancy below 8% despite millions of square feet of new supply.

Absorption Trends and Demand Drivers

Net absorption (the change in occupied space) is a key indicator of demand for industrial space. Both DFW and Northern NJ experienced a wave of positive absorption in 2025, following a more turbulent 2023–24 period. Dallas–Fort Worth in particular has seen exceptional absorption volumes. In Q3 2025 alone, DFW tenants absorbed over 4.1 to 4.9 million sq. ft. of space, and about 3.2 million sq. ft. of that was in new occupancy gains during the quarter. Year-to-date through Q3, DFW notched roughly 19–19.3 million sq. ft. of net absorption – one of the highest totals in the nation. This reflects pent-up demand returning and large move-ins, even as construction deliveries remain high. Importantly, absorption in DFW has been concentrated in a few high-growth submarkets. Southern Dallas County (the “South Dallas” submarket) and the Alliance area in North Fort Worth have led the charge, each seeing over 5 million sq. ft. of occupancy growth through Q3 2025. Meanwhile, some central infill areas with less new supply (and even one older submarket like Northwest Dallas) saw flat or negative absorption as tenants migrated to newer facilities.

Northern New Jersey’s absorption story is more modest but improving. After nine consecutive quarters of overall occupancy losses (2023 into early 2025), the tide turned in Q3 2025 with a positive absorption of ~1.3 million sq. ft. in the quarter. This quarterly gain – driven by a burst of leasing in H2 2025 – helped bring YTD net absorption to roughly +1.4 million sq. ft. by the end of Q3. Essentially, New Jersey’s demand finally outpaced move-outs in late 2025 as tenants grew more confident despite economic headwinds. Like DFW, absorption in NJ was unevenly distributed. The Port-adjacent submarkets saw the lion’s share of new occupancy. Cushman & Wakefield reported the Port South submarket (NJ Turnpike Exits 12/13) led the state with ~1.5 million sq. ft. of positive absorption YTD 2025 – a direct result of big-box logistics move-ins near the port. The Meadowlands submarket also showed resilience, recording about 0.94 million sq. ft. of occupancy gains by mid-year 2025 as new facilities leased up. In contrast, some outer submarkets (notably Exit 8A in central NJ) continued to lose occupied space due to new vacancies and sublease additions. The table below highlights the top submarkets for net absorption in each market:

Top Absorption – DFW (2025 YTD)	Net Absorption	Top Absorption – N. NJ (2025 YTD)	Net Absorption
South Dallas (Inland Port area)	+5.76 million SF	Port South (Exit 12/13 Turnpike)	+1.5 million SF
North Fort Worth (Alliance corridor)	+5.24 million SF	Meadowlands (NYC Metro infill)	+0.94 million SF

Table 3: Leading submarkets for net absorption (space occupied) in 2025. DFW’s top logistics hubs saw outsized absorption, while Northern NJ’s gains were concentrated in port-proximate areas.

The disparity in absolute numbers (DFW’s top submarkets each absorbing ~5+ million SF vs. NJ’s ~1 million SF) reflects the difference in scale and development pipeline between the two markets. Dallas–Fort Worth, with its ample land and robust construction, can accommodate huge occupancy growth in a single year. Its “last-mile” premium index often comes from sheer volume – e.g. South Dallas saw 13 million SF of new supply since 2020 and still filled a large portion of it. Northern New Jersey, on the other hand, is far more constrained; absorption gains are harder-won and primarily come from redevelopments or build-to-suits in the few areas where land is available. Nonetheless, both regions are benefiting from similar demand drivers: third-party logistics (3PL) firms, e-commerce distribution, and retailers are active in leasing new space. In H1 2025, 3PLs dominated U.S. big-box leasing, accounting for 38 of the top 100 industrial leases. This trend is evident locally – for example, four of the five largest new leases in NJ in mid-2025 were by 3PL/logistics companies, a sign that supply chain firms are betting on these locations for distribution. In DFW, major deals in 2025 included large leases by e-commerce and retail logistics operators (e.g. 1.0 MSF lease by Owens Corning in Southeast Dallas and multiple ~700K SF DHL leases in Fort Worth). Such commitments by logistics players are fueling occupancy gains and validating the infill submarkets’ importance.

It’s worth noting that absorption has been aided by a slowdown in new deliveries in late 2024/2025. In DFW, only 2.6–3.0 million SF delivered in Q3 2025 (down sharply from earlier quarters), allowing demand to catch up and nudging vacancy down. In New Jersey, the development pipeline shrank to ~7 million SF – the lowest in years – which helped stem further vacancy increases. Both markets appear to be entering a more balanced phase where supply growth is moderating and steady demand can translate into absorption and eventually tighter vacancy.

Outlook and Key Takeaways

The data-driven comparison above reveals that last-mile industrial submarkets in DFW and Northern NJ outperform on rent and occupancy metrics, albeit under different conditions:

• Rent Premiums: Infill submarkets in both metros command 20%+ higher rents than their market averages, thanks to proximity to consumers and infrastructure. Northern NJ’s absolute rents (~$16–$17/SF) exceed DFW’s (~$10–$12/SF), reflecting the greater barriers to supply in the New York area. Investors targeting last-mile logistics real estate should factor in these rent premiums when underwriting infill acquisitions or developments.

• Vacancy & Demand: Vacancy rates in core submarkets remain low (3–7%), even as overall market vacancy stabilized around 6–9%. Both DFW and NJ saw vacancy plateau in late 2025, indicating that absorption trends are improving. Robust leasing by 3PLs and distribution users is keeping infill vacancies in check. However, outlying areas with a glut of new supply (e.g. South Dallas, central NJ) still have elevated vacancy, presenting opportunities for tenants to find deals.

• Absorption & Growth: DFW’s industrial market is absorbing space at a record clip (nearly 20 million SF in 2025), signaling confidence in its long-term growth and e-commerce-driven demand. Northern NJ’s absorption, while modest, has flipped positive, and strong port volumes plus 3PL activity should support continued occupancy gains. Going forward, last-mile facilities – close to consumers or transport hubs – are expected to lease up first, drive rent growth, and retain value, even if broader market conditions fluctuate.

Conclusion

In summary, the Industrial Last-Mile Premium Index for DFW and Northern NJ highlights the resiliency and upside of infill industrial submarkets. Dallas–Fort Worth offers room to grow at reasonable costs, yet its urban-core submarkets still achieve premium rents and high absorption, underscoring their desirability. Northern New Jersey, constrained by geography but enriched by dense consumption, commands top-tier rents and quickly finds tenants for well-located space. For brokers and CRE investors, the takeaway is clear: last-mile logistics real estate in key submarkets delivers superior performance on rents, occupancies, and absorption trends. As e-commerce and supply chain strategies evolve, these infill industrial submarkets will remain at the forefront – combining low vacancy, strong tenant demand, and premium rents that outshine their less-central counterparts. Staying attuned to the submarket leaderboards in each metro can help identify where opportunities – and outperforming assets – lie in the dynamic landscape of industrial real estate.

Sources:

• LoanAnalytics database

  • Industrial asking rents, rent premiums by submarket, vacancy rates, net absorption, sublease availability, construction pipeline (Dallas–Fort Worth and Northern New Jersey).

• CBRE Research - Industrial MarketView (DFW and New Jersey)

  • Market benchmarks for rents, vacancy, and absorption; commentary on infill vs. peripheral performance.

• Cushman & Wakefield Research - Northern & Central New Jersey Industrial Reports

  • Port and Meadowlands submarket dynamics, leasing and sublease trends, vacancy stabilization.

• JLL Research - U.S. Industrial Outlook / Regional Industrial Reports

  • 3PL leasing demand, big-box leasing trends, absorption drivers, supply normalization.

• U.S. Census Bureau - Quarterly Retail E-commerce Sales

  • Underlying e-commerce sales series referenced by IBISWorld (macro demand baseline).

• Prologis Research - Last-Mile Logistics / Urban Logistics Premium Studies

  • Evidence of rent multiples and pricing power tied to proximity-to-consumer and infill constraints.