Dallas ranked No.32 among the most expensive cities in the world for office space, but that has not stopped businesses from leasing property in the greater metro area.
The city’s ranking came from a market survey conducted by the international real estate search portal Point2, which focused on relevant first quarter 2022 market reports from “the most desirable commercial districts in each city.”
The survey examined “premium units” with more than 6,000 square feet of space and used data from CommercialEdge, cross-referenced against international lease statistics from JLL, CBRE, and Cushman Wakefield.
In Dallas, these premium offices cost $38 per square foot in Q1 and were leased for around $207,900 annually, according to the survey.
While ranked 32nd most expensive globally, premium offices in Dallas cost less than other major U.S. markets. Austin, for instance, came in 17th at the cost of $63 per square foot, just ahead of Miami ($58). Texas’ largest city, Houston, was not ranked.
By comparison, office spaces in Manhattan ($91) and San Francisco ($89) clocked the most expensive square footage in the United States, ranking sixth and seventh, respectively.
Globally, London ($163), Tokyo ($123), and Beijing ($112) ranked the most expensive cities in the world for office space. Office space in London cost more than four times the premium paid in Dallas in Q1 and leased for an average of nearly $1 million.
The cheaper per-square-foot pricing could be why large companies are moving to the city. Recently, infrastructure giant and Fortune 500 company AECOM relocated its global headquarters from Las Angeles to Dallas.
Dallas has seen a sharp recovery in its commercial real estate market since the pandemic-driven exodus of 2020. The city has seen a 2.4% drop in vacancy rates over last year, as well as an 18% increase in office projects under construction. In total, Dallas added nearly 6 million square feet of new commercial space since last quarter.
Not only have office vacancy rates fallen across North Texas, but The Dallas Business Journal also reported the metroplex had 556,000 square feet of positive net absorption in the second quarter of 2022.
Texas has been named one of the top states for business in America, according to the International Economic Development Council, likely due in part to its cheaper commercial office space. The favorable conditions for businesses have attracted companies such as Chevron, Oracle, Hewlett Packard, and Caterpillar to the Lone Star State.