Dallas + Fort Worth Office Market Report: Q4 2023

Quick Thougths: Tenants are showing a clear preference for highly amenitized assets. In Fort Worth, Class A buildings boast a lower vacancy rate of 13%, contrasting with the 20% vacancy in Class B spaces. It's clear that companies are prioritizing amenities to encourage their employees to return to the office. Reach out to Kirk or myself to discuss and you can read the full report below.

The Q4 2023 Dallas-Fort Worth office market reflects a transition period as companies adjust their footprints for remote/hybrid work. Despite challenges, net absorption rebounded to 1.6 million SF, driven by leasing and space withdrawals. Sublease space remains high at 11.2 million SF, contributing to a vacancy rate increase to 19.3%. Rent growth is positive at +4.4% YoY but softened due to decreased leasing activity. The outlook suggests further office vacancy increases in 2024, with DFW outperforming larger metros. Job growth and a 'flight to quality' differentiate Core (Class AA/A) and Non-Core (Class A-/B) assets. DFW's growth attracts capital for converting or demolishing obsolete inventory, removing 3.6 million SF to date, with more planned. This, coupled with job growth, is expected to drive occupancy rebound in the next cycle. Key trendlines include positive office-using job growth, increased total available space, and a notable sublease space uptick. Vacancy rates, asking rents, and construction activity also contribute to the market's dynamic landscape.