Why Is Arlington a Strategic Location for Industrial Real Estate Investment?
Arlington, Texas occupies one of the most strategically valuable positions for industrial real estate in the entire Dallas-Fort Worth Metroplex. Situated at the crossroads of Interstate 30 and Interstate 20, with State Highway 360 providing north-south connectivity to the DFW International Airport corridor, Arlington gives industrial tenants access to the full Metroplex distribution network while maintaining land costs that are meaningfully lower than the warehouse districts of Dallas, southern Fort Worth, or the I-35E corridor.
The city's industrial heritage is anchored by the General Motors Arlington Assembly Plant, one of GM's most productive manufacturing facilities in North America, employing roughly 4,500 workers producing full-size SUVs including the Chevrolet Tahoe, Suburban, and GMC Yukon. The GM plant and its network of Tier 1 and Tier 2 automotive suppliers create a manufacturing ecosystem that generates consistent demand for industrial space across the southeastern part of the city.
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The DFW industrial market encompasses over 1 billion square feet of space, making it one of the largest industrial markets in the United States. While the broader DFW industrial vacancy has risen to approximately 8.8% as significant new supply has been absorbed, Arlington's industrial corridor benefits from a more diversified tenant base that includes manufacturing, distribution, automotive supply chain, and small to mid-size warehouse users. Average industrial rents across the DFW market sit at around $8.12 per square foot, with Arlington properties generally ranging from approximately $4.50 per square foot for distribution space to $10.00 per square foot for flex and manufacturing space.
Texas's lack of a state income tax, combined with Arlington's central DFW location and Tarrant County's business-friendly regulatory environment, makes the city an attractive base for industrial operators serving regional and national distribution needs.
What Industrial Loan Programs Are Available in Arlington?
Arlington industrial borrowers have access to a comprehensive range of financing options, reflecting the DFW Metroplex's deep capital markets and strong lender activity in the industrial sector.
Conventional Bank Loans provide the most common financing for stabilized industrial properties in Arlington. Rates range from approximately 6.25% to 7.75% with 5 to 10 year terms and up to 75% LTV. Texas-based banks with DFW industrial expertise offer competitive terms for warehouse, distribution, and manufacturing properties with strong tenant profiles and long-term lease commitments.
SBA 504 Loans serve owner-occupants of industrial properties and provide up to 90% financing at fixed rates between roughly 5.75% and 6.75% for 20 to 25 year terms. This program is particularly valuable for manufacturers, distributors, and logistics companies in Arlington that want to purchase their facilities rather than lease. The SBA 504 program allows business owners to preserve working capital by minimizing the down payment to as little as 10%.
CMBS and Conduit Loans provide non-recourse financing for larger industrial assets, typically above $2 million. Rates range from approximately 5.88% to 7.49% with 5 to 10 year terms. These loans work well for single-tenant NNN-leased industrial buildings and multi-tenant warehouse parks with strong occupancy.
Bridge Loans finance the acquisition and repositioning of industrial properties that require renovation, tenant improvements, or lease-up. Rates range from around 8.0% to 11.0% with 12 to 36 month terms. Arlington's older industrial buildings along the I-20 corridor present bridge loan opportunities for investors seeking to modernize and re-lease properties at higher rents.
DSCR Loans allow industrial investors to qualify based on property cash flow without personal income documentation. Rates range from roughly 7.0% to 9.0% with 30-year terms. This program works well for investors acquiring smaller industrial properties or warehouse condominiums in Arlington.
Construction Loans finance ground-up industrial development and significant renovations. Rates range from approximately 7.5% to 10.0% with 18 to 36 month terms. Arlington's available land along the southern I-20 corridor and near SH-360 supports new industrial construction for build-to-suit and speculative development.
Which Arlington Industrial Corridors Attract the Strongest Lender Interest?
Arlington's industrial market is concentrated along several key corridors, each with distinct characteristics that affect financing terms and lender appetite.
The I-20 Corridor (South Arlington) represents the city's primary industrial submarket, stretching from the Mansfield Highway interchange east to the Grand Prairie border. This corridor houses the GM Assembly Plant and a concentration of automotive suppliers, distribution centers, and manufacturing operations. Properties along I-20 benefit from direct highway access to the entire DFW Metroplex and attract competitive financing terms from lenders who recognize the corridor's established industrial fundamentals.
The SH-360 Corridor runs north-south through Arlington, connecting the I-20 industrial base to the DFW Airport corridor. This corridor supports flex industrial, light manufacturing, and warehouse properties that serve tenants needing both industrial functionality and proximity to the airport and northern DFW employment centers. Properties along SH-360 command premium rents relative to the I-20 base due to their dual-access advantage.
The I-30 Corridor (East Arlington) provides industrial connectivity between Arlington and Dallas, with flex, warehouse, and light industrial properties serving the eastern portion of the city. While smaller in total square footage than the I-20 corridor, the I-30 industrial submarket benefits from proximity to the Entertainment District and the residential density of central Arlington, which supports last-mile distribution and service-oriented industrial uses.
Pioneer Parkway and Central Arlington contains older industrial buildings that present repositioning opportunities. Many of these properties date from the 1970s and 1980s and require modernization to meet current tenant requirements for clear height, truck court depth, and loading dock configuration. Bridge loan financing is the primary tool for investors targeting these repositioning plays.
What Are the Current Industrial Loan Rates and Terms in Arlington?
Industrial loan rates in Arlington reflect the sector's strong fundamentals and favorable lender sentiment toward warehouse and manufacturing properties in the DFW market.
Industrial cap rates in Arlington currently range from approximately 6.0% to 7.5%, depending on property quality, lease term, and tenant credit. Single-tenant NNN-leased industrial buildings with investment-grade tenants trade at the lower end, while multi-tenant warehouse parks and older manufacturing facilities trade at higher cap rates that offer yield-focused investors compelling returns.
Lenders evaluating Arlington industrial properties focus on lease structure, tenant creditworthiness, building functionality, and location relative to the highway network. Properties with long-term NNN leases to creditworthy tenants can access the most competitive financing terms, while multi-tenant properties with shorter lease terms may require higher interest rates to compensate for the additional leasing risk.
The DFW industrial market's elevated vacancy of around 8.8% has introduced some caution into lender underwriting, but this vacancy is concentrated in the largest new-construction distribution facilities rather than the smaller warehouse and manufacturing properties that characterize much of Arlington's industrial inventory. Lenders with experience in the Arlington industrial market recognize this distinction and continue to finance local industrial properties actively.
Use a commercial mortgage calculator to model your Arlington industrial property's financing scenarios before approaching lenders.
How Does the GM Assembly Plant Affect Arlington's Industrial Market?
The General Motors Arlington Assembly Plant is one of the most significant single-facility economic drivers in the DFW Metroplex, and its presence creates ripple effects throughout Arlington's industrial real estate market.
The GM plant directly employs approximately 4,500 workers, making it one of Arlington's largest single employers. These workers generate demand for housing, retail services, and commercial space throughout the city. The plant's production of full-size SUVs, including the Chevrolet Tahoe, Suburban, and GMC Yukon, positions it as a high-value manufacturing facility that GM has consistently invested in upgrading and modernizing.
The automotive supply chain extends the plant's industrial impact well beyond its own footprint. Tier 1 and Tier 2 suppliers located throughout Arlington and the surrounding area provide components, subassemblies, and services to the assembly plant, creating a network of industrial tenants that occupy warehouse, manufacturing, and flex space across the city's industrial corridors.
Lenders evaluating industrial properties near the GM plant recognize the demand stability that the automotive supply chain provides. Properties serving GM suppliers benefit from the predictable production schedules and long-term supplier relationships that characterize the automotive industry. However, lenders also evaluate concentration risk, noting that over-reliance on a single anchor employer creates vulnerability if production volumes change.
The GM plant's continued operation through multiple economic cycles, including major investments in retooling for next-generation vehicle production, provides lenders with confidence in the long-term viability of Arlington's automotive-adjacent industrial submarket.
What Value-Add Strategies Work for Arlington Industrial Properties?
Arlington's industrial market offers value-add opportunities for investors willing to modernize older properties and reposition them to meet current tenant requirements.
Clear Height Improvements address one of the most common deficiencies in older Arlington industrial buildings. Modern distribution and warehousing tenants require minimum clear heights of 24 to 32 feet, while many 1970s and 1980s-era buildings offer only 16 to 20 feet. Where structurally feasible, raising clear heights or marketing properties to tenants with lower height requirements can unlock significant value.
Truck Court and Loading Dock Upgrades modernize the logistics functionality of older buildings. Adding or reconfiguring loading docks, expanding truck turning radii, and improving trailer parking capacity allow older properties to compete with newer construction for distribution tenants.
HVAC and Climate Control Additions expand the tenant base for older warehouse buildings. Adding heating, ventilation, and climate control to cold-shell warehouse space opens the property to food distribution, pharmaceutical storage, and climate-sensitive manufacturing tenants who command higher rents.
Office Build-Out Improvements create flex-industrial functionality within traditional warehouse buildings. Many small to mid-size industrial tenants in Arlington require a combination of warehouse and office space, and converting a portion of warehouse area to finished office space can increase overall rent per square foot.
Bridge loans are the primary financing tool for industrial value-add strategies in Arlington. Lenders evaluate the projected as-stabilized value and income to determine loan sizing, making a detailed improvement plan and realistic rent projection essential components of the application. Successful value-add borrowers typically plan for a 12 to 18 month improvement period followed by permanent financing once the property achieves stabilized occupancy.
How Does Arlington's Highway Access Affect Industrial Property Values?
Arlington's position at the intersection of three major highway systems creates a logistics advantage that directly affects industrial property values and financing terms.
Interstate 30 connects Arlington directly to both Dallas (approximately 20 minutes east) and Fort Worth (approximately 20 minutes west), providing industrial tenants with access to the two largest employment and consumption centers in North Texas. Trucks originating from Arlington can reach either city's downtown within 30 minutes during normal traffic conditions.
Interstate 20 runs east-west through southern Arlington, connecting to the I-35E and I-35W corridors that serve as the primary north-south freight arteries through Texas. This connection gives Arlington industrial tenants access to the NAFTA trade corridor linking Mexico, Texas, and the Midwest without requiring passage through Dallas or Fort Worth city centers.
State Highway 360 provides north-south connectivity between the I-20 industrial corridor and the DFW International Airport, one of the world's busiest cargo airports. Industrial tenants requiring both warehouse space and air freight access benefit from SH-360's direct connection to the airport logistics cluster in Irving and the Great Southwest Industrial District.
This triple-highway advantage makes Arlington industrial properties more valuable to tenants serving multi-modal distribution networks, and lenders recognize the transportation infrastructure as a fundamental support for property values and tenant demand.
What Challenges Do Arlington Industrial Borrowers Face?
While Arlington's industrial market offers strong fundamentals, borrowers should be aware of specific challenges that affect financing availability and terms.
The DFW industrial market's elevated vacancy of approximately 8.8% reflects significant new construction that has added millions of square feet of modern, large-format distribution space to the market. While this new supply primarily competes in the large-box segment (100,000+ square feet), the overall vacancy increase has made lenders more conservative in their underwriting across all industrial segments.
Environmental considerations affect some Arlington industrial properties, particularly older manufacturing sites along the I-20 corridor. Phase I and Phase II environmental assessments are standard requirements for industrial property financing, and properties with identified environmental issues may require remediation before permanent financing can be secured. Bridge loans with environmental reserves can address this timing gap.
Property tax assessments in Tarrant County can be aggressive for industrial properties, particularly those that have been recently improved or repositioned. Industrial investors should budget for property tax protests and potential assessment increases when modeling cash flows.
Competition from newer industrial parks in southern Dallas County, Midlothian, and the Alliance corridor in northern Fort Worth presents a challenge for older Arlington industrial properties seeking tenants. However, Arlington's central DFW location and established infrastructure provide a counterbalance that newer, more peripheral industrial parks cannot match.
How Should Arlington Industrial Borrowers Structure Their Loan Applications?
A well-prepared loan application significantly improves approval odds and financing terms for Arlington industrial deals.
Start with a detailed tenant analysis. For multi-tenant properties, provide current lease abstracts, tenant financial information where available, and a leasing plan for any vacant space. For single-tenant properties, document the tenant's creditworthiness, industry position, and lease commitment. Lenders evaluate industrial properties primarily through the lens of tenant quality and lease durability.
Provide a building condition assessment that addresses major systems including roof, HVAC, loading docks, fire suppression, and structural integrity. Industrial properties require specialized maintenance, and lenders want assurance that the building can continue to function for its intended use throughout the loan term.
Document the property's logistics advantages, including highway proximity, truck access routes, loading dock configuration, clear height, and column spacing. These functional characteristics directly affect the property's market rent potential and tenant demand, which are the primary drivers of industrial property value.
Include comparable lease and sale transactions that support your property's valuation. Arlington's industrial market has sufficient transaction volume to provide meaningful comparables, but these comparisons must be specific to the property's submarket and functional category.
Contact Clearhouse Lending to discuss your Arlington industrial financing needs and receive a customized rate quote for your warehouse or manufacturing property.
Frequently Asked Questions About Industrial Loans in Arlington
What is the minimum loan amount for an industrial property in Arlington?
Minimum industrial loan amounts in Arlington vary by program. Conventional bank loans start at approximately $500,000. SBA 504 loans can be used for amounts as low as $125,000 but are most efficient above $500,000. CMBS loans typically require minimums of $2 million to $3 million. DSCR loans are available for amounts as low as $150,000 for smaller warehouse and flex properties. The minimum that makes economic sense depends on the fixed costs of origination relative to the total loan amount.
Can I get SBA financing for an industrial property in Arlington?
Yes, SBA 504 loans are an excellent option for owner-occupied industrial properties in Arlington. The program provides up to 90% financing at fixed rates for 20 to 25 year terms, allowing manufacturers, distributors, and logistics companies to purchase their facilities with as little as 10% down. The business must occupy at least 51% of the building space. SBA 504 financing can also cover equipment purchases associated with the industrial operation.
How do lenders evaluate GM supplier tenants in Arlington industrial properties?
Lenders generally view GM supplier tenants positively because of the stable, predictable demand associated with automotive manufacturing production schedules. However, lenders also evaluate concentration risk and may require information about the supplier's contract terms with GM, the diversity of the supplier's customer base, and the supplier's financial stability independent of the GM relationship. Properties with multiple tenants serving different industries are typically viewed more favorably than single-tenant properties solely dependent on GM supply chain demand.
What environmental issues should I expect when financing an Arlington industrial property?
All industrial property loans in Arlington require Phase I Environmental Site Assessments. Properties with historical manufacturing or chemical storage use may require Phase II assessments involving soil and groundwater testing. The I-20 corridor's history of automotive manufacturing and industrial operations means that some properties carry environmental legacies requiring remediation. Bridge loans can include environmental reserves to fund remediation during the loan term, with permanent financing available after cleanup completion.
How does Arlington's industrial market compare to other DFW submarkets?
Arlington's industrial market occupies a middle position within the DFW Metroplex. It offers lower land and building costs than the Great Southwest Industrial District, southern Dallas County, or the Alliance corridor in northern Fort Worth, while providing superior highway access compared to more peripheral locations. Arlington's average industrial rents of roughly $4.50 to $10.00 per square foot are competitive within the DFW market, and the city's established infrastructure and workforce base provide advantages over newer, less developed industrial areas.
What is the typical closing timeline for an industrial loan in Arlington?
Closing timelines for Arlington industrial loans vary by program. Bridge loans close in 14 to 30 days. Conventional bank loans close in 45 to 60 days. SBA 504 loans require 60 to 90 days. CMBS loans close in 60 to 90 days. Environmental and building condition due diligence can extend timelines for older industrial properties. Working with a lender experienced in DFW industrial properties helps avoid delays.
Taking the Next Step With Arlington Industrial Financing
Arlington's industrial market offers investors and owner-occupants a strategically located, well-connected base for warehouse, manufacturing, and distribution operations within the DFW Metroplex. The GM Assembly Plant's anchor presence, combined with the city's triple-highway advantage along I-30, I-20, and SH-360, creates an industrial market supported by both institutional and entrepreneurial demand.
Whether you are acquiring a stabilized NNN-leased warehouse, repositioning an older manufacturing facility, or financing an owner-occupied industrial purchase through the SBA 504 program, Arlington provides the fundamentals that lenders require to offer competitive financing terms.
Contact Clearhouse Lending to discuss your Arlington industrial financing needs and connect with lenders who specialize in DFW Metroplex warehouse and manufacturing properties.