Small-Bay Flex Is the Most Undersupplied Product in Northeast Tarrant County

Industry Insight | Southlake, Keller, Grapevine, Alliance

DFW's industrial headline looks soft. Across the Q1 2026 brokerage reports, overall DFW industrial vacancy landed between roughly 8.3% and 9.0%. Look one level down and it's a different market. By property type, flex sat at 7.0%, manufacturing at 3.9% and warehouse/distribution at 9.8%.

The gap comes from what's being built. Most of DFW's 31 to 33 million SF construction pipeline is big-box and build-to-suit, with very little new small-bay product. Demand is moving the other way. In Q3 2025, bulk demand for buildings of 300,000 SF and up fell to a seven-year low, while small-bay hit a seven-year high at 23% of transaction volume.

Why it matters here

Northeast Tarrant is where that gap shows up first. The region's industrial growth has followed Alliance, so new supply has come in as distribution, and the infill cities of Southlake, Grapevine, Keller and Colleyville have very little land zoned or priced for multi-tenant flex. The users who need 1,500 to 5,000 SF keep growing with the rooftops: contractors, trades, showroom operators, e-commerce, specialty service businesses. They want to be close to their customers and their crews, and the product they need is the hardest thing to find.

What we're seeing on the ground

This year Field CRE closed two leases totaling 8,500 SF at Urban Garages Northlake in the Alliance corridor, and represented the seller on a flex showroom condo on SH 121 in Lewisville. The pattern on both was the same. Qualified users showed up early, and they'd already been through what else was available. On ownership deals, SBA-backed buyers are treating a flex condo the way a medical user treats an office condo: as a long-term home for the business, not a line item.

Who this affects

Owner-users. If you're leasing flex in Northeast Tarrant and plan to stay five years or more, ownership is worth pricing out now. There isn't much new product coming to compete for your business.

Investors. This is a separate product from owner-user, with different financing and different math. Small-bay multi-tenant assets are getting more attention as bulk softens. One caution: in Fort Worth, vacancy has been rising for small-bay multi-tenant assets with spaces of 3,000 SF or less as newer buildings deliver. Location and bay depth matter more than the label.

Landowners and developers. Infill sites that pencil for small-bay flex are the scarce piece. If you hold land near SH 114, SH 26 or the 1709 corridor that's zoned or can be rezoned for light industrial, that land has an audience most owners don't know about.

Where this goes

Bulk will keep driving DFW's headlines. Over the next few years, the better story in Northeast Tarrant will be the small operator who needs 2,500 SF with a door, close to home, and can't find it.