Allen-McKinney Texas Industrial Market Report February 2026
Allen/McKinney Industrial Real Estate Trends, Leasing, Rents, Construction, and Investment Outlook
Allen-McKinney Texas Industrial Submarket Overview and Positioning
The Allen/McKinney industrial submarket continues to emerge as one of North Texas’s most dynamic growth corridors. With approximately 24.6 million square feet of industrial inventory, the market has nearly doubled in size since 2020, driven by rapid population growth both within and surrounding the submarket boundaries.
Unlike traditional logistics-heavy submarkets, Allen/McKinney attracts a diverse tenant mix skewed toward technology, advanced manufacturing, aerospace, and specialized industrial users. Major corporate occupiers include RTX (formerly Raytheon Technologies) with over 1.6 million square feet, Prysmian Group with 4.4 million square feet, and a growing roster of semiconductor-related tenants tied to the regional technology ecosystem.
Industrial assets cluster primarily along US-75, State Highway 121, and FM 546 corridors, with newer development concentrating near McKinney National Airport and along the eastern growth frontier toward Anna and Melissa.
Key positioning takeaway: Allen/McKinney functions as a hybrid industrial market serving specialized manufacturing, technology production, and selective logistics users requiring proximity to North Texas’s skilled labor pool and affluent consumer base.
Allen-McKinney Industrial Vacancy and Leasing Activity Trends
The Allen/McKinney industrial market maintains below-market vacancy despite aggressive construction activity.
- Vacancy rate: approximately 8.8%, below the Dallas-Fort Worth average of 8.84%
- 12-month net absorption: approximately 356,000 SF (negative 87,182 SF year-to-date)
- Availability rate: 14.5%
Leasing activity moderated through late 2024 and early 2025 following several years of exceptional growth. Recent notable move-ins include:
- Modular Power Systems: 304,000 SF in McKinney
- Maverick Power: 166,000 SF near McKinney National Airport
- Critical Process Systems Group: 186,000 SF full-building lease
The submarket exhibits strong tenant retention, with logistics vacancy at 12.0%, specialized industrial at just 1.5%, and flex space at 5.8%. Owner-occupied facilities represent a significant portion of inventory, providing stability during economic cycles.
Critical distinction: Most leasing activity occurs in small to mid-bay buildings under 200,000 SF, not bulk distribution facilities, reflecting the submarket’s specialized industrial character.
Allen-McKinney Texas Industrial Rental Rate Trends and Pricing Dynamics
Allen/McKinney maintains premium rental rates relative to the broader Dallas-Fort Worth market.
- Average asking rent: approximately $14.37/SF
- Annual rent growth: approximately 3.8%
- Specialized industrial rents: $18.66/SF
- Logistics rents: $12.02/SF
- Flex rents: $19.42/SF
Rental rate growth has decelerated from pandemic-era peaks but remains near pre-2020 historical averages of 3.5-4.5% annually. The submarket commands a persistent premium over Dallas-Fort Worth averages due to:
- High land values and replacement costs
- Limited available development sites
- Superior labor access and demographics
- Tenant willingness to pay for location and specialized building features
Even sublease space in Allen/McKinney typically trades at or above broader market asking rates, reflecting a structural rent floor that demonstrates pricing durability.
Industrial Construction and Development Activity in Allen-McKinney Texas
Development activity remains robust with nearly 2.0 million square feet under construction.
- Under construction: 1,963,927 SF
- Proposed pipeline: 2,473,269 SF
- 12-month deliveries: 1,008,224 SF
Notable projects currently under construction include:
Core5 Business Park Buildings D and E
- Building D: 159,735 SF (delivery March 2026)
- Building E: 492,368 SF (delivery March 2026)
- Combined park size exceeds 1.3 million SF upon completion
CyrusOne Data Center Phase 2 (Allen)
- Size: 976,000 SF expansion
- Existing Phase 1: 346,000 SF
- Anticipated completion: Mid-2026
McKinney National Business Park Phase 2
- Multiple buildings totaling over 500,000 SF
- Strong preleasing activity mirrors Phase 1 success
- Completion: Late 2025/Early 2026
Rockefeller Group Redbud Boulevard Development
- Building A: 75,436 SF (delivered December 2025)
- Building B: 175,946 SF (delivery March 2026)
- Building C: 67,965 SF (delivery March 2026)
Ground-up speculative development remains economically viable due to strong absorption fundamentals and limited land supply, particularly sites offering proximity to highways, fiber infrastructure, and available power capacity.
Allen-McKinney Industrial Sales and Capital Markets Activity
Investment activity remained healthy with $60.6 million in confirmed sales volume over the past 12 months, exceeding the five-year average of $53.9 million.
- 12-month sales volume: $60.6 million
- Average sale price: $190/SF
- Average cap rate: 6.4%
- Number of transactions: 31 deals
Transaction activity in Allen-McKinney is dominated by:
- REIT acquisitions of stabilized, income-producing assets
- Owner-user purchases (particularly technology and manufacturing companies)
- Private equity targeting built-to-suit and single-tenant properties
- Strategic buyers seeking North Texas expansion platforms
Large institutional capital remains attracted to the submarket’s growth trajectory, tenant credit quality, and below-market vacancy fundamentals.
Supply and Demand Outlook for Allen-McKinney Industrial Real Estate
Forecast projections indicate continued inventory growth paired with steady absorption through 2029.
- Inventory growth: Expected to reach 31.2 million SF by 2030
- Vacancy forecast: Stabilizing between 6.8-8.0% through 2029
- Net absorption: Averaging 1.2-1.5 million SF annually
- Construction ratio: 1.5x (absorption to deliveries)
The submarket benefits from multiple demand drivers:
Population Growth: Allen, McKinney, Frisco, and surrounding communities continue adding residents at rates exceeding state and national averages
Employment Base: Expanding corporate presence including technology, aerospace, healthcare, and advanced manufacturing sectors
Infrastructure Investment: Ongoing highway improvements, utility capacity expansion, and fiber network buildout support continued development
Scarcity Value: Limited remaining developable industrial land creates long-term supply constraints
Unlike logistics-heavy submarkets facing potential oversupply, Allen/McKinney’s specialized tenant mix and land limitations provide downside protection. Vacancy is forecast to remain below Dallas-Fort Worth averages through the forecast period.
What This Means for Industrial Tenants in Allen-McKinney Texas
- Competition for quality space remains elevated, particularly for small-bay product under 50,000 SF
- Lease terms favor landlords with limited concession packages and strong escalation clauses
- Early planning (12-18 months before lease expiration) improves outcomes and site selection options
- Flexible site criteria (considering adjacent submarkets like Anna, Melissa, or Wylie) may provide cost savings
- Tenant representation is critical for navigating functional constraints, comparing effective rents, and negotiating favorable terms
- Build-to-suit options remain viable for creditworthy users requiring 75,000+ SF
- Renewal options and expansion rights should be negotiated proactively given limited relocation alternatives
What This Means for Industrial Property Owners and Investors
- Rent durability remains strong with minimal downward pricing pressure
- Obsolescence risk exceeds vacancy risk. Functional relevance matters more than age alone
- Repositioning opportunities exist for properties failing to meet modern tenant requirements (ceiling height, power capacity, dock ratios)
- Capital discipline matters more than timing alone. Well-located assets outperform regardless of entry point
- Exit strategies remain liquid with active REIT, private equity, and owner-user buyer pools
- Value-add opportunities include adaptive reuse (office-to-industrial conversions), redevelopment of legacy corporate campuses, and infill development
Allen-McKinney Texas Industrial Market Outlook
The Allen/McKinney industrial submarket is unlikely to experience meaningful oversupply through the current forecast period. Instead, the market will continue to reward well-located, functionally relevant assets while penalizing properties that fail to adapt to evolving tenant requirements.
About the Advisor
Brent Pennington, CCIM advises industrial tenants, business owners, and property owners across North Texas on real estate decisions where risk, infrastructure, timing, and long-term outcomes materially impact value.
For confidential discussions regarding Allen/McKinney industrial opportunities, contact Brent Pennington at 817-999-8266 or brent@metroportcommercial.com.
Market data provided by CoStar Group. All statistics current as of February 11, 2026. This report is for informational purposes only and does not constitute investment, legal, or tax advice. Readers should conduct independent due diligence and consult appropriate advisors before making real estate decisions.
Frequently Asked Questions About Allen-McKinney Texas Industrial Real Estate
What is the current vacancy rate for industrial space in Allen/McKinney Texas?
The Allen/McKinney industrial vacancy rate is approximately 8.8%, slightly below the Dallas-Fort Worth metro average of 8.84%. Vacancy varies significantly by property type, with specialized industrial at just 1.5%, flex space at 5.8%, and logistics at 12.0%. Recent vacancy increases are supply-driven rather than demand-driven, indicating continued market health as new construction delivers.
How much does industrial space cost to lease in Allen-McKinney Texas?
Industrial lease rates in Allen/McKinney average approximately $14.37 per square foot, representing a premium over Dallas-Fort Worth market averages. Specialized industrial space commands $18.66/SF, flex space averages $19.42/SF, and logistics space runs $12.02/SF. Annual rent growth runs approximately 3.8%, supported by high land values, limited development sites, and strong tenant demand for labor access and location.
Is new industrial construction happening in Allen-McKinney Texas?
Nearly 2.0 million square feet is currently under construction in Allen/McKinney, with an additional 2.5 million SF in the proposed pipeline. Major projects include the Core5 Business Park expansion (652,000 SF), CyrusOne Data Center Phase 2 (976,000 SF), and multiple Rockefeller Group developments totaling over 300,000 SF. Most new construction consists of speculative buildings under 200,000 SF and build-to-suit projects for owner-users.
What types of industrial tenants are leasing space in Allen-McKinney Texas?
Allen/McKinney attracts a diverse tenant mix including technology and semiconductor companies, aerospace and defense contractors (RTX, General Dynamics), medical and precision manufacturing users (Ulrich Medical USA), advanced industrial product companies (Prysmian Group, Critical Process Systems Group), and selective logistics operators. The submarket’s tenant base is weighted toward creditworthy, operationally sticky users requiring specialized building features and skilled labor access.
What are industrial properties selling for in Allen-McKinney Texas?
Industrial properties in Allen/McKinney are selling at approximately $190 per square foot on average, with cap rates around 6.4%. Recent significant transactions include EastGroup Properties’ $60.6 million acquisition of three buildings at the McKinney Airport Trade Center and Starwood Capital Group’s acquisition of three properties as part of a $685 million national portfolio. Transaction activity is dominated by REIT acquisitions, owner-user purchases, and private equity targeting stabilized assets.
Is Allen-McKinney Texas a good market for industrial investment?
Allen/McKinney functions as a defensive industrial asset class with downside protection driven by supply constraints, tenant quality, and population growth rather than pure logistics velocity. The market offers strong rent durability, below-average vacancy risk, and limited oversupply potential through 2029. However, obsolescence risk exceeds vacancy risk, making functional relevance and repositioning potential critical to long-term value preservation. The submarket rewards capital discipline over timing alone.
Where is industrial space located in Allen-McKinney Texas?
Industrial assets in Allen/McKinney concentrate along US-75, State Highway 121, and FM 546 corridors. Major concentrations include McKinney National Airport area, the Allen Technology Park, Core5 Business Park, and developing submarkets in Anna and Melissa. The submarket functions as a specialized industrial corridor rather than a traditional logistics zone, with properties clustered near highway access, fiber infrastructure, and population centers.
Should I buy or lease industrial space in Allen-McKinney Texas?
The decision depends on business lifecycle stage, capital structure, operational requirements, and growth trajectory. Owner-users dominate Allen/McKinney acquisitions due to limited available inventory, landlord-favorable lease terms, and long-term occupancy economics. For expanding companies with 5+ year time horizons and access to capital, ownership often proves advantageous. For companies requiring flexibility or facing uncertain growth, leasing provides optionality. Early planning, flexible site criteria, and experienced representation improve outcomes regardless of strategy.
What is driving industrial development in Allen-McKinney Texas?
Development activity is driven by sustained population growth in North Texas, expanding corporate employment base (technology, aerospace, manufacturing), limited available development sites creating scarcity value, strong tenant demand for modern product with superior specifications, and investor appetite for below-market vacancy and rent growth. Infrastructure improvements including highway expansion, utility capacity, and fiber network buildout support continued development through the forecast period.
How does Allen-McKinney compare to other Dallas-Fort Worth industrial submarkets?
Allen-McKinney maintains below-market vacancy (8.8% vs. 8.84% DFW average), commands premium rental rates ($14.37/SF vs. lower DFW averages), and attracts higher-quality tenants weighted toward technology, aerospace, and manufacturing rather than traditional logistics. The submarket experiences lower construction volatility, stronger rent durability, and greater owner-user activity compared to bulk distribution corridors. Limited land supply and specialized tenant mix provide defensive characteristics absent in logistics-heavy submarkets.
