Q4 2023: Dallas Office Market Report

Dallas-Fort Worth’s office market continues to have challenges related to demand and elevated availability. At the close of 2023, 88.8 million square-feet was available for lease, equating to an historically high 20.5 percent availability rate. Approximately 10.5 million square-feet of the available space is sublease, which has incrementally declined since the start of 2023. The result of all these movements is a 17.8 percent vacancy rate, a 20-year high.

Leasing activity totaled approximately 18.0 million square-feet at the end of 2023. This is a 19 percent drop from 22.1 million square feet recorded in 2022, and just slightly above totals reported in 2020. This trend can be partially attributed to companies increasingly reassessing their space needs and leasing smaller spaces due to the elevated cost of capital or decreasing real estate expenditures by bringing vacant space to market as sublets.

Bifurcated between urban and suburban submarkets, demand for space continues to be contingent on location, quality, configuration, and access to amenities. New high-end buildings push the threshold for asking rents in premier office nodes. As 2023 closed-out, construction deliveries totaled 5.2 million square feet, a 31 percent increase from 2022.