Active smaller space users drive DFW’s first quarter office activity

Our Q1 office market report illustrated that total leasing volume came in at roughly 3 million square feet (msf). This pace continues to be slower than normal, at 60%–65% of DFW’s historic velocity.

While there are several ways to slice these numbers, the smaller space user is clearly driving the DFW market from a sheer volume perspective. During the first part of 2025, tenants requiring less than 5,000 square feet totaled almost 500 deals, comprising close to 76% of deal activity.

While these tenant demands created a sizable level of leasing transactions, they only generated demand for 873,000 square feet, or 29% of the 3.0 msf leased. In comparison, large tenants that commanded at least a full floor (25,000+ square feet) accounted for a similar level of total demand, with 905,000 square feet leased. These larger requirements, however, were “cherries on the cake” given they represented just 20 deals in Q1.

The challenge here is that while DFW’s vacancy and space availability have come down in recent quarters, more leasing activity—especially for larger transactions (10,000+ square feet)—is necessary to move these fundamentals back to the more balanced levels seen pre-2020.