The DFW Office Market Navigates Uncertainty
Key Takeaways:
- For two consecutive quarters, Dallas-Fort Worth has undergone negative absorption surpassing one million square feet.
- The overall vacancy rate, at 20.6%, has not gone over 20% since the early 1990s, and the Class A rate of 23.9% also marks its highest point since that period.
- Rental rates remain over $30 per square foot standing at $30.40, but for the first time in four years, the rates did not increase when compared to the previous quarter.
- Overall sublease space in the market surpassed ten million square feet for the second straight quarter.
The economic uncertainty that resurfaced in Dallas-Fort Worth during the first quarter has temporarily dampened the optimism that prevailed in 2022, as tenants returned over one million square feet of space for the second consecutive quarter. High vacancy rates, coupled with an excess of ten million square feet of sublease space, present challenges for landlords. However, these conditions are also paving the way for a robust recovery for tenants once the economy stabilizes and the business community regains confidence in consistent growth. As history has demonstrated during national downturns, DFW tends to be the last to endure the negative impacts and the first to bounce back, showcasing the region’s resilience and adaptability.
Click here to download the full report as a PDF.