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Avison Young releases Fourth Quarter 2023 DFW Office Market Report
January 9, 2024
Dallas-Fort Worth, TX – Today Avison Young released its Fourth Quarter 2023 Office Market Report for Dallas-Fort Worth (DFW).
As of fourth quarter 2023, DFW’s total job base hit another new peak, rising by more than 450,000 jobs, or almost 12% since the pandemic recovery. In comparison, office jobs increased by 22% or 238,000 net new jobs over the period. Year-on-year job gains have also showed solid strength. In the last 12 months, office jobs moved higher and increased by 51,000, translating into a 4.1% growth.
Even with strong office job gains, the market saw availability for both direct and sublet space increase to record levels due to the continued acceptance of remote and hybrid work. While absorption came in slightly positive in Q4, it was not sufficient to erase Q1’s large negative.
“Deals are being done, although 2023 leasing activity continued to be 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 11.9 million sf through Q4. On a square footage basis, this is on par with slower economic periods in DFW, although it is an all-time low as a share of inventory, which underscores the continued disruption in the office sector. In terms of absorption, market averages were flat for all classes for the year.
“While the 2023’s market was generally flat, trophy and higher-quality space in walkable and high-amenity locations remain in demand by tenants,” stated Greg Langston, Principal and Managing Director of the firm’s Dallas office. “Even though many companies are still weighing their space needs, middle market tenants with leases coming due continue to seek quality space as they return to the office more actively than many larger companies.“
The DFW market saw vacancy increase overall to 25.5%, the highest level since the late 1980’s real estate recession.
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For more information
Walter Bialas, Senior Insight Analyst: +1.214.974.9749