Dallas Office Market Posted Positive Absorption
In Dallas-Fort Worth, office net absorption remained positive through 2025 and into the first quarter of 2026. That signaled a measurable, if uneven, recovery in market demand.
JLL logged 332,300 square feet of positive absorption in Q1 2026. Multiple firms had also reported gains across 2025.
Earlier, D CEO cited 272,890 square feet in Q1 2025. It was the first positive quarter in 10 periods.
Later reports showed stronger market momentum. That included 661,782 square feet in Q3 2025 and 1.3 million square feet for the year. At the same time, the region’s data center expansion added another layer of commercial real estate demand across Dallas-Fort Worth.
Positive absorption helped trim vacancy and availability from prior peaks. JLL placed vacancy at 24.5% in Q1 2026. Avison Young also reported that vacancy held steady at 24.9% in Q1 2026.
Other firms also showed improvement during 2025. The rebound reflected a shifting tenant mix, with demand supporting both Class A and Class B buildings.
Dallas Office Leasing Rose With Larger Deals
Leasing activity accelerated in Dallas-Fort Worth as larger transactions drove the office market higher in early 2026.
Q1 leasing climbed 31.7% from the prior quarter to 4.4 million square feet, while average deal size increased by 821 square feet.
That pointed to growing demand for larger blocks, often tied to tenant consolidation and space optimization.
Large renewals helped sustain momentum, including Bank of America at Hallmark Center I and Aimbridge Hospitality at HQ53.
Dallas’s broader growth story also gained support from the planned $10 billion mega project, which is expected to add thousands of homes, office space, and new live-work-play districts.
What the shift suggests
Larger renewals carried much of quarterly volume.
Smaller deals still remained a major share of transactions.
Class AA/A buildings captured the strongest leasing interest.
Higher asking rents reflected confidence in premium space.
Falling vacancy and limited new supply supported bigger commitments.
The pattern suggested a stabilizing market with stronger conviction among occupiers.
The FDIC Lease Boosted Downtown Dallas
Federal demand sharpened downtown Dallas leasing as the FDIC expanded its regional hub at Plaza of the Americas. It committed roughly 46,400 additional square feet through a lease amendment and previously controlled space that had remained vacant.
The move lifted its footprint to about 186,100 square feet. It also reinforced a stabilizing federal presence in a tower that was about 62% leased.
The 10th floor had been previously leased but remained dark. The 11th floor added nearly 20,000 new square feet.
A $2.5 million build-out had crews preparing refreshed offices. Staff were expected to return by early 2025 under the office mandate.
The expansion reflected tenant consolidation after return-to-office rules required employees on-site at least two days weekly. Work was slated for October 2024, alongside renovation of 5,600 square feet.
Texas Capital Center Signaled Investment Demand
Crescent Real Estate’s acquisition of Texas Capital Center sent a clear market signal that institutional buyers still compete for trophy office assets in Dallas’s strongest submarkets.
The roughly $291 million to $292 million purchase of the 457,000-square-foot Uptown tower ranked as Dallas’s biggest office sale in years.
It also closed above prior expectations.
That pricing, near $639 per square foot, highlighted institutional appetite for core assets with durable tenancy and credit-backed valuation support.
Deeper Market Meaning
Uptown’s location strengthened buyer conviction.
Texas Capital Bank anchored more than 202,000 square feet.
A 15-year extension reinforced long-term income visibility.
Munck Wilson Mandala added 48,000 square feet of momentum.
Competitive pricing suggested selective capital still rewards quality.
The asset’s leasing history and tenant profile indicated investors continue to favor well-leased, best-in-class buildings over broader office-market weakness.
Dallas Office Rents Rose as Vacancy Fell
Dallas-Fort Worth posted a modest but notable office recovery as vacancy compressed and asking rents pushed to fresh highs.
Overall vacancy fell to 25.0 percent in Q3 2025, then to 24.5 percent by Q1 2026. At the same time, asking rents climbed from $32.06 to as high as $34.04 per square foot.
Leasing also strengthened, reinforcing improving conditions.
| Metric | Q3 2025 | Q1 2026 |
|---|---|---|
| Vacancy | 25.0% | 24.5% |
| Asking rent | $32.06 | $34.04 |
| Leasing volume | 4.4M sf | 4.4M sf |
Pressure Concentrated in Top Tier Assets
Performance reflected a flight quality trend, as tenants favored newer buildings with an amenity premium.
Class A rents reached $39.90 per square foot, while trophy space hit $75.20 in Q3 2025. Older properties, especially in weaker corridors, continued to face elevated vacancy.
Assessment
Dallas office indicators pointed to a market regaining traction amid lingering stress.
Positive absorption, larger lease commitments, and the FDIC’s downtown deal suggested that tenants were still making consequential long-term decisions.
The sale of Texas Capital Center also indicated that selective capital remained active despite elevated uncertainty.
With rents edging higher and vacancy tightening, the latest activity signaled a measurable shift in momentum.
Even as broader pressure across the office sector continued to frame risk.
