According to Newmark’s quarterly report on the Dallas office market, annual full-service asking rental rates have reached a historical high of $29.66/SF, representing a 1.3% increase year over year. However, occupancy has declined and overall vacancy rates have risen by 130 basis points to 24.5%. The under-construction pipeline remains steady with 2.9 million square feet in progress.
Leasing activity in the quarter totaled at 3.2 million square feet but was slowed down by smaller deals being done, resulting in an average deal size of only 4,197 SF per lease signed – a decrease of15% from last year.
Looking ahead to this year, it is expected that the Dallas office market will continue to experience limited growth due to elevated inflation and higher costs of debt which will also keep office investment activity low for the foreseeable future.
