DFW’s economy continues to be one of the most robust in the U.S. due to its low cost of doing business, economic diversity, and pro-business attitude. As of third quarter 2023, DFW’s total job base hit another new peak, rising by more than 400,000 jobs, or 10.4% since the pandemic recovery. In comparison, office jobs increased by 20.6% or 219,000 net new jobs over the period. Year-on-year job gains have also showed solid strength. In the last year, office jobs increased by 46,000, translating into a 3.8% growth.
Even with strong office job gains, the market saw availability for both direct and sublet space increase to record levels as a result of the continued movement toward remote and hybrid work. While absorption came in flat for Q2 and Q3, it remained negative for the year.
“Although year-to-date leasing activity was positive, it was sluggish and not sufficient to take down the increase in office space availability,” noted Avison Young Senior Insight Analyst, Walter Bialas.
The market saw leasing activity total 9.1 million square feet through Q3, which is on par with slower economic periods in DFW. In terms of absorption, trophy assets outperformed the market averages and saw positive absorption for the year.
“We continue to see quality spaces, both trophy and better-quality Class A, in high demand,” stated Greg Langston, Principal and Managing Director of the firm’s Dallas office. “We are also seeing significant interest by middle market tenants seeking space as they return to the office more actively than some larger companies.”
In Q3, the DFW office market vacancy increased to 25.6%, marking the highest level since the real estate recession in the late 1980s.
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