Dallas-Fort Worth office market report

Q4 2022

Dallas Fort-Worth’s economy continues to gain strength. Jobs have expanded consistently, fully rebounding from the initial losses in early 2020. Total employment hit another new peak at over 4.1 million, up 6.3% from its late 2019 watermark. Office jobs have risen 154,000 since that point, translating into 14.5% growth, driven in part by ongoing organic business expansions and relocations. Major office metrics look to be slowly stabilizing, although uncertainty remains a concern.

Overall, we expect it will require several quarters to show meaningful recovery in vacancy, sublet availability, and return to the office. The move towards quality, however, will continue and pressure lesser buildings as tenants seek better space at the optimum location for their workforce.
966,000

Inventory

Modest office deliveries characterized DFW in 2022, although construction activity is steady.  Major ground breakings totaling 6.1 msf are planned to anticipate potential market demand in 2023 and beyond.  
1.1 msf

Net absorption

Modest office deliveries characterized DFW in 2022, although construction activity is steady.  Major ground breakings totaling 6.1 msf are planned to anticipate potential market demand in 2023 and beyond.  .
25.3%

Vacancy

Despite DFW’s strong office employment growth that was up 172,500 and set a new peak, average vacancy inched higher and is at its highest since the 1980s —sublet vacancy is the highest since the 2000’s tech downturn. Newer Class A is in high demand, beating these averages by 10+ percentage points
66 msf

Availabilities

Total availability inched up slightly during 2022 to 29.3%, driven by both direct and sublet increases.  As of year-end, almost 66 msf was available, with sublet accounting for 9.3 msf of that total.
$30.08

Direct asking rent

Direct asking rent continues to move higher. Since early 2019, full-service rents have increased 3.4% annually. Concessions, while slightly higher, are reportedly remaining modest, as landlords, especially for better assets in the better submarkets, remain bullish on DFW’s economic future.
$4.3 billion

Investment sales

Through 3Q DFW saw strong 2022 office investment. DFW continues as one of the US’s most active investment markets due to its diverse economy, pro-business environment, strong economic outlook, and attractive investment values —where dollars go further.  
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Get in-depth office market reports and insights from commercial real estate experts in the Greater Dallas-Fort Worth (DFW) area. Avison Young advisors look at DFW commercial real estate activities and the latest DFW statistics to provide you expert market research on the area’s office properties.

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