The Real Supply Story Is the Cranes That Aren't There

For two years, the story on Texas industrial has been supply. Too much of it, delivered too fast, and a worry that it would take a while to fill. That story wasn't wrong. But it's backward-looking, and the market is still telling it while the more important number has quietly flipped. New construction starts have fallen off a cliff. The wave delivering right now is the last of the boom. Behind it, the tap is closing.

What's Landing Now Is the Last of the Boom

Look at what's actually landing first, because it's real. Dallas-Fort Worth had 31.2 million square feet of industrial space under construction as of the second quarter of 2026, its largest pipeline since late 2023, with year-to-date deliveries running about 41% ahead of last year, according to JLL. Houston climbed to roughly 21.5 million square feet under construction, a 63% jump, per CommercialSearch. So yes, a lot of space is still coming. That's what feeds the oversupply headlines.

Watch Starts, Not Deliveries

But here's the thing about buildings under construction: they were financed and started one to two years ago, in a different world. They tell you about the past. To see the future, watch starts, because today's groundbreakings are the deliveries of 2027 and 2028. And starts have collapsed. According to Yardi Matrix, national industrial construction starts in February 2026 were down 62% year over year. April was nearly 59% below the prior April. Four of the first five months of 2026 posted double-digit annual declines. This isn't a soft patch. It's a sector that has stopped breaking ground.

Steady Demand, Thinning Supply

Put the two facts together and the picture gets interesting. The current wave of well-located product clears through 2026 and into early 2027. In DFW, JLL notes that much of the remaining speculative space delivers in the first half of 2027, with preleasing rising every quarter, so less of it hits the market empty than the raw number suggests. And behind that wave, very little is coming, because almost nobody is starting anything new at today's rates and costs. Demand, meanwhile, keeps compounding. Manufacturing, logistics, and the data center buildout keep pulling space off the market across Texas. Steady demand meeting a thinning supply of new product is not an oversupply story. It's a tightening one, just on a delay.

Why We Buy the Existing Box

This is why we buy for where the market is going, not where it just was. The oversupply narrative describes a pipeline that's already emptying. The starts collapse describes the runway ahead, and the runway is tighter. That gap between what the headlines say and what the construction data implies is exactly the kind of thing local operators get to act on before it's priced in.

It also reinforces something we already believed about existing assets. When new supply is drying up, owning the good, well-located building you can buy today is a stronger position than trying to add to a pipeline that no longer pencils. The replacement cost of that building keeps climbing while the competition to build it disappears. You don't have to bet on construction economics that don't work right now. You just have to own the right box in the right submarket before the supply behind it thins out.

Stay disciplined about which box, though, because the tightening won't be uniform. A well-located infill building in a growth corridor is positioned very differently from a big speculative box in an oversupplied outer ring that's still competing with the tail of the delivery wave. The starts data tells you the direction of the whole market. It doesn't tell you which specific asset wins. That read is still local, still block by block, and still the work we'd rather do than anyone else.

The Cranes That Aren't There

The cranes you see today were financed in a different market. The ones that aren't there tell you what 2027 and 2028 look like. We're buying well-located existing product now, while the oversupply story keeps sentiment cautious and pricing reasonable, because the supply tap is closing behind this last wave. Steady Texas demand is about to meet a lot less new space, and the owners who positioned early are the ones who benefit when it does.