Dallas, October 9, 2025
News Summary
The Dallas commercial real estate market is experiencing a significant increase in leasing activity, primarily driven by heightened demand from financial firms. Leasing by these organizations has surged by 75.7% compared to the previous year. Positive net absorption has been recorded for the third consecutively quarter, totaling 1.6 million square feet year-to-date. Despite elevated vacancy rates, average asking rents have reached an all-time high, signaling a strong recovery period for the sector. The slowdown in new construction suggests further stabilization and potential rent increases in the market.
Dallas — The Dallas commercial real estate market recorded a sharp uptick in leasing activity in the third quarter of 2025, driven largely by financial-sector demand and steady tenant absorption. Leasing by financial firms in Dallas is up 75.7% from the previous year, while net absorption in the Dallas/Fort Worth commercial real estate market has turned positive for the third consecutive quarter, with year-to-date absorption totaling positive 1.6 million square feet. These developments have pushed the market toward its strongest absorption pace since 2019.
Key market indicators
Marketwide leasing momentum continued through the year. New leasing activity reached 11 million square feet year-to-date, reflecting the strongest pace since 2022, and new leasing by financial activities firms accounts for 2.3 million square feet year-to-date. Vacancy edged lower at the end of the quarter, with vacancy rates declined 0.1% quarter-over-quarter, reaching 24.7%. Several core submarkets showed notable improvements in vacancy, including Uptown/Turtle Creek (-7.8% year-over-year) and Preston Center (-6.1% year-over-year).
Rents, construction and supply trends
Despite elevated vacancies in parts of the market, asking rents moved higher. Asking rents for office spaces have reached a new all-time high of $33.66 per square foot, reflecting a 3.0% increase year-over-year despite higher vacancy rates. High-end trophy buildings outperformed the broader market, with rents for trophy properties outperformed the general market, growing 4.7% year-over-year to reach $75.20 per square foot.
On the development front, new construction has slowed substantially. Office construction activity has decreased to 1.7 million square feet, marking its lowest level since 2013, following the delivery of 23Springs. Analysts expect that a decline in new property deliveries is expected to persist for several years, which could reshape supply dynamics and support further rent recovery in tight submarkets.
Drivers and market context
The recent leasing rebound has been attributed to a mix of renewed corporate activity and concentrated demand from financial firms. Market observers have linked the recovery in part to the so-called “Y’all Street” phenomenon as a driver of the rebound in leasing activity. These shifts have contributed to an environment where absorption has turned positive for the third straight quarter and year-to-date leasing volumes are at multi-year highs.
The information above was compiled and shared publicly by market research sources during the quarter. Andrew Senior, Research Manager at Cushman & Wakefield, reported these insights through a LinkedIn post, adding context to the hard metrics that show stronger leasing, rising rents, and lower construction activity.
What this means for tenants, owners and investors
For tenants, increasing rent pressure in prime and trophy space suggests that occupiers seeking prestige locations may face higher costs and greater competition. For building owners and investors, the combination of slowing deliveries and improving absorption offers an opportunity to stabilize occupancy and push rents, particularly in top-tier properties. Submarkets that have seen steeper vacancy declines may attract additional leasing and repositioning activity as tenants search for quality space in improving pockets of the market.
Outlook
Overall, the Dallas/Fort Worth office market is showing signs of recovery driven by concentrated leasing from the financial sector and improving absorption metrics. While vacancy remains elevated relative to historical norms, the decline in construction activity and continued leasing momentum could contribute to tighter conditions over the next several years if current trends persist.
FAQ
How much has leasing by financial firms increased?
Leasing by financial firms in Dallas is up 75.7% from the previous year.
Has net absorption changed recently?
Net absorption in the Dallas/Fort Worth commercial real estate market has turned positive for the third consecutive quarter, with year-to-date absorption totaling positive 1.6 million square feet.
What is the level of new leasing activity year-to-date?
New leasing activity reached 11 million square feet year-to-date, reflecting the strongest pace since 2022.
How much of the new leasing is from financial activities firms?
New leasing by financial activities firms accounts for 2.3 million square feet year-to-date.
What are current vacancy rates?
Vacancy rates declined 0.1% quarter-over-quarter, reaching 24.7%.
Which submarkets recorded notable vacancy declines?
Notable declines in vacancy rates were observed in Uptown/Turtle Creek (-7.8% year-over-year) and Preston Center (-6.1% year-over-year).
What is the status of office construction activity?
Office construction activity has decreased to 1.7 million square feet, marking its lowest level since 2013, following the delivery of 23Springs.
Are new property deliveries expected to change soon?
A decline in new property deliveries is expected to persist for several years.
What are current asking rents?
Asking rents for office spaces have reached a new all-time high of $33.66 per square foot, reflecting a 3.0% increase year-over-year despite higher vacancy rates.
How did trophy properties perform on rent?
Rents for trophy properties outperformed the general market, growing 4.7% year-over-year to reach $75.20 per square foot.
Who reported these insights?
Andrew Senior, Research Manager at Cushman & Wakefield, reported these insights through a LinkedIn post.
What is credited with driving the rebound in leasing activity?
The “Y’all Street” phenomenon is credited with driving the rebound in leasing activity.
Market snapshot (key figures)
| Metric | Value | Visual |
|---|---|---|
| Leasing increase by financial firms | 75.7% |
|
| Year-to-date absorption | Positive 1.6 million sq ft |
|
| New leasing YTD | 11 million sq ft |
|
| Financial activities leasing YTD | 2.3 million sq ft |
|
| Vacancy rate | 24.7% |
|
| Asking rent (avg) | $33.66 / sq ft |
|
| Trophy rent | $75.20 / sq ft |
|
| Office construction activity | 1.7 million sq ft |
|
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Additional Resources
- D Magazine: Michele Wheeler and Brian O’Boyle Named 2026 NTCAR Hall of Fame Inductees
- Wikipedia: Dallas
- Dallas Innovates: The Last Word: Cushman & Wakefield Researcher on Why Dallas Office Market is Having Its Best Year Since 2019
- Google Search: Dallas Office Market 2025
- PR Newswire: Kennedy Funding Closes $2.05 Million Land Loan for South Dallas Real Estate Developer
- Google Scholar: Dallas Commercial Real Estate
- D Magazine: Preston Center Redevelopment to Bring Class AA Office, Multifamily, and Retail by 2028
- Encyclopedia Britannica: Dallas Real Estate
- CBRE: Dallas-Fort Worth Ranked as Top Target for Commercial Real Estate Investment in 2025
- Google News: Dallas Commercial Real Estate Investment 2025
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