Dallas Commercial Office Space for Rent
Q4 2025
DFW Market Report January 2026
Overview: Dallas-Fort Worth CRE Market (Q4 2025)
The DFW metroplex is consistently ranked as one of the most influential and resilient commercial real estate markets in the United States, cementing its status as a national economic powerhouse [12]. This dominance is underpinned by three core structural advantages: sustained massive in-migration [13], a business-friendly state environment, and a central geographic location that makes it a premier logistics hub [7]. The total inventory across all commercial sectors, particularly industrial, continues to expand, reflecting the sustained demand from large-scale corporate relocations, which DFW leads the nation in [4].
The market is currently characterized by a strategic growth phase, transitioning from a period of rapid boom. While Industrial and Retail sectors remain stellar performers due to unrelenting population and e-commerce-driven demand, the Office sector remains under severe pressure, though it shows distinct recovery in the newest, highest-quality assets (the "flight-to-quality" phenomenon) [6]. Investment sales activity, while generally slower than peak years due to high interest rates and tighter lending standards, is now hyper-focused on high-quality, stable, cash-flowing assets [15]. Cap Rates are generally expanding (rising) across most property types, especially in the Office sector, reflecting higher risk and debt costs [16]. DFW continues to lead the nation in attracting major corporate expansions and headquarters, which provides a long-term economic ballast against national volatility [12].
Key Metric DFW Trend (Q4 2025) National Context
Economic Driver Sustained job growth (Finance, Logistics, Tech), high in-migration (leading the U.S.) [13]. Outperforming the national average in job creation.
Corporate Relocations Very High (Top U.S. market for HQ announcements and expansions) [4]. Attracting businesses from high-cost markets (CA, IL, NY).
Overall Sentiment Optimistic, but highly selective by asset quality and submarket [15]. Investors are shifting to safer, better-quality assets.
Cap Rates Expanding (rising), especially for Office, reflecting higher risk and debt costs [16]. Lending is tighter across the board.
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Office Space Analysis
The DFW office market is the weakest link in the metroplex's CRE portfolio [8], reflecting national trends of hybrid work adoption and flight-to-quality. Despite these headwinds, the market saw positive net absorption in Q3 2025, which helped slightly lower the overall vacancy rate [1].
Metric DFW Performance (Q3 2025) Trend
Overall Vacancy Rate ~24.3% - 25.0% [4] High, but slightly stabilizing (down 20-30 bps QOQ) [1]
Average Asking Rent (FS) ~$31.95 - $32.06 per SF (Record High) [6] Increasing (Driven by Class A product) [6]
Sublease Space ~11.2 Million SF [4] Elevated
Tenant Search Deals (Last 365 days) ~12.3% of total searches [17] Proprietary Data [17]
Deep Dive: Flight to Quality and Tenant Demand Profile
The most dominant theme is the flight to quality [6]. Class AA/A properties, particularly in prime submarkets like Uptown/Turtle Creek, Legacy West (Plano), and Las Colinas (Irving), are capturing most of the leasing activity and commanding record-high rents [8]. Leasing activity increased significantly in Q3 2025 to 4.4 million square feet, and net absorption turned positive at over 1.4 million square feet [6]. Conversely, older, less-amenitized Class B and C properties are struggling severely [4]. The construction pipeline has notably shrunk to approximately 2.0 to 2.5 million square feet [1], the lowest level since 2013, suggesting future supply pressure on Class A space will ease.
The most common specific lease term searched for office space is Less than one year, making up 33.2% of all office deals [17], followed by 2-3 Years (26.3% of office deals) [17]. The average size requirement for office tenants seeking 5+ year leases is substantially larger, averaging 4,421 SF (lower bound) to 6,036 SF (upper bound) [17], compared to an overall average office search size of 1,416 SF to 2,616 SF [17]. Top submarkets searched over the last 365 days include Dallas (55.5% of office searches) [17], Frisco (24.9% of office searches) [17], and Plano (20.7% of office searches) [17].
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Warehouse/Industrial Space Analysis
DFW remains one of the top industrial/logistics hubs in the nation [7], supported by its central location, massive size (over 1.1 Billion SF of inventory), and excellent infrastructure (rail, air, highways). The market is transitioning from an overheated expansion to a more normalized but still healthy environment [5].
Metric DFW Performance (Q3 2025) Trend
Overall Vacancy Rate ~9.1% - 9.2% [7, 9] Tightening (Down 10-40 bps QOQ and YOY)
Average Asking Rent (Gross) ~$9.63 - $9.70 per SF [2] Moderating/Stabilizing (Down 1.8% YOY)
Net Absorption (YTD) ~18.6 Million SF [5] Solid, but Normalized
Under Construction ~34.5 Million SF [7] Robust (Still a national leader in development)
Tenant Search Deals (Last 365 days) ~24.8% of total searches [17] Proprietary Data [17]
Deep Dive: Balanced Conditions and Tenant Profile
Net absorption totaled 4.3 million square feet for the quarter [5], largely driven by warehouse/distribution and manufacturing properties, and is once again outpacing new supply, which has helped tighten the vacancy rate. This improved balance creates "neutral conditions" where neither landlord nor tenant has a massive advantage [2]. The high-demand areas continue to see massive activity, and tenants are increasingly focused on securing space early, as indicated by 38.9% of the under-construction pipeline being preleased [9].
Internal data reveals that Industrial/Warehouse searches are heavily focused on shorter terms [17], with 1-2 Years (31.9% of industrial deals) [17], 3-5 Years (31.6% of industrial deals) [17], and 2-3 Years (18.8% of industrial deals) [17] being the most common lease term requests year-to-date. Average industrial search size for 5+ year terms (17,556 SF lower bound to 29,588 SF upper bound) [17] is significantly larger than the overall average industrial search size of 9,647 SF to 20,206 SF [17].
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Retail Space Analysis
The DFW retail sector is the stealth winner and one of the strongest retail markets in the country [3], thanks to explosive population growth, strong consumer spending, and very limited new supply relative to demand.
Metric DFW Performance (Q3 2025) Trend
Overall Vacancy Rate ~4.9% - 5.2% [3] Extremely Low (Rose slightly due to deliveries)
Average Asking Rent ~$20.60 per SF (Gross) [3] Strong Annual Growth (~4.9% YOY) [3]
Net Absorption (Q3) ~278,400 SF (Positive) [3] Muted but positive
Under Construction ~6.9 Million SF [3] Focused on Northern Suburbs
Tenant Search Deals (Last 365 days) ~62.9% of total searches [17] Proprietary Data [17]
Deep Dive: Landlord Pricing Power and Tenant Behavior
Vacancy rates remain extremely low—significantly below the national average—giving landlords strong pricing power [3]. Retail development is primarily concentrated in the fast-growing northern suburban corridors, following new residential master-planned communities. Activity remains high for grocery-anchored centers and single-tenant net lease deals.
TenantBase search volume indicates that Retail/Storefront searches are the dominant volume on the platform [17], making up 62.9% of all tenant searches [17]. The most requested terms were 3-5 Years (36.2% of retail deals) [17], 2-3 Years (18.0% of retail deals) [17], and 1-2 Years (17.1% of retail deals) [17]. The average search size for retail space is between 2,620 SF (lower bound) and 4,364 SF (upper bound) [17]. This sustained high search volume highlights the intense competition for limited space within the metroplex.
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Coworking and Flexible Space Analysis
The flexible office market is a mature and crucial part of the DFW office ecosystem, driven by the permanent shift to hybrid work [10].
Metric DFW Performance (Q3 2025) Trend
Total Locations ~310 Spaces (Top 2 nationally by location count) [10] Stabilizing
Total SF ~5.8 Million SF [10] Growing, but Q2 saw a slight decline
Share of Inventory ~2.0% of total office inventory [10] Mature
Deep Dive: Rationalization
DFW is one of the largest coworking markets in the U.S. by location count, second only to Los Angeles. Operators are shifting from aggressive expansion to a strategy of portfolio rationalization and profitability, prioritizing larger, more efficient, and amenity-rich spaces over fragmented sites [10].
Internal search data for Coworking space showed "No deals to show" for the standard lease term breakdown [17], suggesting that Coworking tenants are likely searching for flexible memberships or very short-term agreements that fall outside the standard deal classification. However, the available SF data for Coworking searches indicates an average size requirement of 225 SF (lower bound) to 442 SF (upper bound) [17].
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Emerging Sector Deep Dive: Data Centers
DFW is rapidly emerging as a global Data Center powerhouse, driven by its power infrastructure, central location, and cheap land, making it a critical market for the U.S. buildout of Artificial Intelligence (AI) infrastructure [14].
- Massive Growth: DFW is the second-most in-demand market for data center services nationally [14]. Under-construction activity is expected to double the size of the DFW data center market by the end of 2026 [14].
- AI Demand: Demand is driven primarily by hyperscalers (cloud giants) and AI providers, many of whom require custom, high-density, liquid-cooled facilities [14].
- Infrastructure Challenge: This surge is creating massive demand on the power grid. Texas' grid (ERCOT) is expected to see demand grow by an estimated 11% to 14% annually through 2026, largely due to data centers [14]. This constraint is leading to large-scale, private power solutions, including new projects strategically located near power plants and high-voltage transmission lines to support multi-gigawatt campuses.
# Source Title URL
Partners Real Estate (Dallas Office Q3 2025 Quarterly Market Report)
https://partnersrealestate.com/research/dallas-office-q3-2025-quarterly-report/
Partners Real Estate (Dallas Industrial Q3 2025 Quarterly Market Report)
https://partnersrealestate.com/wp-content/uploads/2025/10/Q325_DFW_Industrial_QuarterlyReport.pdf
Partners Real Estate (DFW Retail Q3 2025 Quarterly Market Report)
https://partnersrealestate.com/wp-content/uploads/2025/10/Q325_DFW_Retail_QuarterlyReport.pdf
Newmark (Dallas-Fort Worth Office Market Report Q3 2025)
Newmark (Dallas-Fort Worth Industrial Market Report Q3 2025)
Cushman & Wakefield (DFW Office MarketBeat Q3 2025)
Cushman & Wakefield (DFW Industrial MarketBeat Q3 2025)
Avison Young (DFW Office Market Snapshot Q3 2025)
https://www.avisonyoung.us/documents/d/dallas/3q-2025-dallas-fort-worth-office-snapshot-report-final
Lee & Associates (DALLAS CRE Industrial Market Report Q3 2025)
https://www.lee-associates.com/wp-content/uploads/2025/10/2025-Q3-Dallas-Fort-Worth-Industrial.pdf
CoworkingCafe / Optix (US Coworking Industry: Benchmarks and Pricing 2025)
https://www.optixapp.com/blog/us-coworking-industry-benchmarks/
Urban Land Institute (ULI) & PwC (Emerging Trends in Real Estate 2026)
Texas Real Estate Research Center (TRERC) at Texas A&M (Texas Real Estate Forecast – 12 Months Ending Summer 2026)
https://trerc.tamu.edu/article/trerc-real-estate-forecast-12-months-ending-summer-2026/
CBRE / JLL (DFW Data Center Market Reports 2025/2026)
(Aggregated Data Source)
MD Real Estate Group (DFW Commercial Real Estate Market Report 2025–2026)
Buildout (The 2026 outlook for CRE)
TenantBase (Internal Data - Tenant Searches)
(Proprietary Data)
Information in this report is aggregated from various third-party sources and synthesized using artificial intelligence and other research tools. While we believe these sources to be reliable, we cannot guarantee the absolute accuracy or completeness of the data. This report is intended for informational purposes to provide market insight and should be independently verified prior to any use in a real estate transaction or legal commitment.