DFW Navigates Uncertainty
Key Takeaways
- The vacancy rate of 20.6% didn’t change from last quarter. This is first time in five quarters that the rate did not increase.
- Rental rates increased this quarter across all classes setting a new overall high mark of $30.74. The Class A rate of $34.71 is being driven up by the Uptown and Preston Center submarkets which are quickly approaching the $50.00 threshold.
- Absorption was slightly positive this quarter marking a stark contrast to the previous two quarters, which saw a combined negative absorption of 1.8 million square feet.
The Dallas-Fort Worth market is showing encouraging signs of positive transformation this quarter, despite the challenges faced in previous quarters with numerous move outs. The almost no overall absorption during the quarter is a welcomed change, symbolizing stabilization. Businesses are recognizing that adapting to the current market conditions is not just a choice but a necessity for survival. This understanding is visibly manifesting as a shift towards quality is underway. Absorption levels reflect this trend, with Class A spaces showing a positive uptake of 157,000 square feet, while Class B spaces lagged at negative 114,000 square feet. Though these numbers might not be massively impressive at a glance, they signal a vital realization among companies. To encourage employees to return to the office, the workspace must be inviting, and Class A spaces provide the desired amenities and environment to achieve that.
Office Market Statistics
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