Dallas-Fort Worth Office Market Maintains Stability in Q1 2025
The Dallas-Fort Worth (DFW) office market remained relatively stable in the first quarter of 2025, according to Partners Real Estate’s Q1 report. The total vacancy rate declined by 10 basis points to 25.1%, although it remains 30 basis points higher than the same period last year.
Leasing activity ticked up modestly, rising from 3.8 million square feet in the previous quarter to 4 million square feet. Among the notable transactions were Toyota Financial Services’ lease of 241,452 square feet at Southstone Yards and GEICO’s 165,107 square foot lease at Galatyn Commons.
The quarter also marked a return to positive net absorption, totaling 751,040 square feet. Class A office properties stood out with 1.5 million square feet of positive demand. However, ongoing softness in the Class B segment tempered overall performance.
New construction activity slowed considerably. Only 36,193 square feet were delivered in Q1, reflecting a broader contraction in the development pipeline. Currently, 2.8 million square feet are under development—down 50% year-over-year.
Rental rates continued their upward trajectory, increasing to $31.34 per square foot from $30.85 in the previous quarter, reflecting both quarterly and annual growth.
Overall, while the DFW office sector still faces headwinds—particularly in non-premium segments—the fundamentals show signs of stabilization driven by strong demand for high-quality office space.
