Fundamentals are looking solid for office in Dallas/ Fort Worth as the market faces its lowest construction in more than a decade.
For one, net absorption of 130,000 square feet came in strong during the three months through September, according to a report from CBRE. Most of the demand is coming from Class A office, which, for the fourth straight quarter, witnessed positive demand. Meanwhile, Class B assets have brought 1.4 million square feet of negative absorption to the market over the last year, according to CBRE.
"Most of the net absorption in Q3 2025 stemmed from tenants moving into prime office space in the Uptown district, following suit with Uptown/Turtle Creek’s desirability throughout the year, posting more than 400,000 sq. ft. year-to-date, the highest of any DFW office submarket," the brokerage said.
Overall leasing reached 2.6 million square feet, which the report noted as a "marked" rise from the June quarter. The submarkets that saw the highest activity included Dallas CBD, Far North Dallas and Las Colinas. PennyMac signed the largest lease with its 304,473 square foot deal in Far North. The next two largest were Integrity Marketing Group and Energy Transfer, taking 185,233 and 120,923 square feet, respectively.
Higher quality assets also helped carry asking rents, which rose "marginally" quarter-over-quarter to $25.39 per square foot, CBRE noted. Class A properties have enjoyed 3.5 percent year-over-year growth in the third quarter and 11.1 percent in the last three years.
The strong results come as only two million square feet of office product was under construction at the end of September — the lowest levels seen since 2013 in DFW. Moreover, nothing new broke the ground in the third quarter. Additionally — there's the tariff impact — especially on China, Canada and Mexico imports — which could further mute activity.
"Recently imposed tariffs could have a notable impact on commercial real estate construction costs, particularly steel and aluminum materials," CBRE warned.
"While some property types will be more affected than others, this could lead to future supply shortages for prime office space, a more secondary effect of tariff-induced deceleration."
Overall, CRE is keeping a bullish lens. Assuming an economic downturn is avoided, both momentum for fight to quality and return to office mandate trends should spur leasing activity in DFW's office sector, the firm forecasts.
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