Key Takeaways
In the first half of 2024, the DFW office market saw positive absorption of 175,290 square feet, driven by contributions from all classes. Class A and B vacancy rates are currently at their highest levels in a decade and were unchanged from the previous quarter. For the first time in several quarters, rents for Class A and B properties declined slightly. Over 10 million square feet of sublease space continues to have a significant impact on the market.
Dallas-Forth Worth Office Market Highlights
As we approach the start of 2024, the Dallas-Fort Worth office market faces contrasting economic signs, but continues to shine despite significant obstacles. Vacancy rates have risen to 20.6%, a 20-year high, and are showing signs of plateauing, but more than 10 million square feet, or about 2.3% of total office space, are available for sublease. Rents, which had been consistently rising in the past, have fallen slightly for the first time in several years. Still, DFW continues to attract new companies, providing entrants with economically attractive and diverse office options. The influx of companies relocating to DFW is a bright spot in the market, confirming its reputation as a resilient and cost-effective business environment. Despite high vacancy rates and flattening rents, the region offers strong options for companies looking to establish or expand their presence. The current situation of high vacancy rates and available sublease space could work in favor of tenants seeking favorable lease terms, allowing DFW to turn these challenges into opportunities for revitalization and growth as the year progresses.
Over the past decade, the market has seen 47 million square feet of supply and 21.9 million square feet of absorption, with over 88% of the absorbed space being in Class A buildings, revealing a marked preference for quality.