Avison Young releases Third Quarter 2025 DFW Office Market Report

Dallas-Fort Worth, TX – Avison Young, a global real estate advisory firm, today released its Third Quarter 2025 Office Market Report for Dallas-Fort Worth (DFW). The DFW office market continued its upward trajectory in the third quarter of 2025, fueled by a persistent “flight to quality” trend and renewed investor confidence. The region is showing signs of a bifurcated but strengthening recovery.

Net absorption remained robust, with 725,000 square feet (sf) added in the third quarter, pushing the year-to-date total to 1.6 million sf (msf). This growth was largely driven by Class A assets, which accounted for 1.9 msf of absorption year-to-date, concentrated in high-demand submarkets such as Uptown, Preston Center, and Far North Dallas. This trend underscores tenants’ preference for high-quality, amenity-rich spaces that support talent attraction and retention.

“Flight to quality is no longer just a trend—it’s a strategic imperative,” said Greg Langston, Principal and Managing Director at Avison Young. “Companies are doubling down on premium office environments to support culture, collaboration, and talent retention, and the DFW market is responding with resilience.”

Leasing activity rebounded sharply, totaling 4 msf in the third quarter—surpassing the five-year post-pandemic average. Year-to-date leasing volume reached 11.4 msf, marking a 13.6% increase over the five-year average. Trophy and Class A properties captured 70% of all leasing activity, while Class B assets, despite generating 3.4 msf of leasing volume, experienced a net occupancy loss of 286,000 sf. Overall, the third quarter showed signs of stabilization in the Class B sector, with 147,000 sf absorbed.

Vacancy rates declined to 25.2%, the lowest level in 2.5 years, though still elevated compared to historical norms. Meanwhile, direct asking rents climbed to a record high of $36.01 per sf, led by trophy assets which saw an 8% year-over-year increase to $62.91 per sf. Class A and B rents rose more modestly, by 1.4% and 0.8%, respectively.

“The data reflects a market in transition,” said Ariel Guerrero, Manager of Market Intelligence for Avison Young’s Central Region. “While Trophy and Class A assets are leading the recovery, the stabilization in Class B leasing activity suggests broader momentum may be building heading into 2026.”

Investor sentiment also surged, with investment sales activity up 116% year-over-year, signaling that investors and owner-users are regaining confidence and capitalizing on discounted pricing.

New construction activity has slowed significantly, falling to its lowest level since 2012. Just over 2 msf is currently underway, with 69% preleased. Uptown and Preston Center dominate the pipeline, accounting for 79% of new development and 84% committed. The only third quarter delivery was 23Springs, a 642,000-sf project with tenant move-ins scheduled over the next year.

While market fundamentals are clearly improving, a full and sustained recovery will depend on continued office job growth and its translation into stronger leasing momentum heading into 2026.