Avison Young releases first quarter 2025 Dallas-Forth Worth office market report

Dallas-Fort Worth, TX – Today, Avison Young released its first quarter 2025 Dallas-Fort Worth (DFW) office market report. 

After significant availability space increases from 2019 through 2023, DFW’s office market looks to have stabilized and has begun to consistently improve. The first quarter saw availability for both direct and sublet space come down another 700,000 square feet (sf) from the end of 2024. This is a drop of 6.8 million sf since it peaked in late 2023. Likewise, vacancy declined to 26.0% in the first quarter, compared to its peak of 26.4% late last year. 

While still elevated, these consistent quarterly improvements are important because it is the first time in this cycle that “predictability” appears to have returned to the market.

Office space availability now totals 64 million sf. This is well below the 71 million sf peak hit in 2023, but still elevated compared to the 50 to 52 million sf quarterly average prior to this cycle. Net office absorption also continued its positive trend that began in the last half of 2023. The critical difference over this period is that we saw no meaningful quarter-to-quarter negatives, resulting in the first quarter of 2025 hitting 900.000 sf, on top of 2024’s 1.5 million sf total.

“Office space availability and absorption are consistently improving now. Although DFW is not back to its exceptional pre-2020 benchmarks, this positive trend suggests balance is gradually returning to the market. But, while deals are being done, leasing activity continues to be slower than normal,” noted Avison Young Senior Insight Analyst, Walter Bialas. 

In 2024, leasing activity totaled 17 million sf, short of DFW’s historic 20 million sf annual average. Leasing activity, however, slowed in the first quarter at 3 million sf.

“As I’ve noted the last few quarters, DFW’s office metrics are now consistently improving and our market is slowly climbing back to normal. Our first quarter stats showed improvement across the board. Availability has improved materially, coming down 2.8 percentage points since its late 2023 peak. Looking back over the last year and a half, absorption has been good news, holding steady in positive territory,” stated Greg Langston, Principal and Managing Director of the firm’s Dallas office. 

Langston added, “What is important to note is that this predictable demand stability will improve market sentiment as we move through 2025, which will benefit top-quality buildings in walkable locations. In addition, we expect leasing to move higher later in the year given an uptick in the return to office for small- to mid-size tenants, as well as potentially larger occupiers.”