Dallas office vacancy rates are some of the worst in the country, according to a newly released report.
Switch on Business has reported that Dallas lost $1.62 billion in lost rents due to vacant office space during the first quarter of 2024, the third highest in the United States and the worst in Texas. Houston followed closely behind at $1.56 billion.
Nationally, vacancies have equated to a $250 billion loss.
Roughly 28.6 million Americans aged 18-24 (1 in 5 individuals in this group) now work fully remote or hybrid. The trend toward working remotely accelerated due to the COVID-19 pandemic lockdowns and their aftermath.
As a result, office occupancy rates have tumbled, now sitting at just half the pre-pandemic level.
As recently detailed in The Dallas Express, North Texas recorded 26.7% vacant office space in the third quarter of 2024. For comparison, industrial vacancies stood at less than 10% during that same period. This trend has helped push office-to-industrial conversion, like the one taking place at the former Transamerica building in Plano.
“Landlords and property owners bear the brunt of the loss, as vacancies mean no rent is coming in to cover mortgage payments, maintenance costs or other operating costs associated with the building,” said James Barnes of NeoMam Studios, per The Real Deal.
New York City possesses the highest value of vacant office space nationally by a wide margin, with $7.61 billion in lost rent annually. Los Angeles is ranked second in the country, losing $2.1 billion annually.
New York City also had the most vacant square footage at 105.8 million square feet, followed by Chicago at 58.1 million.
To determine the square footage vacancy, the study’s authors multiplied the total office space inventory by the vacancy rates listed in Cushman & Wakefield MarkBeat U.S. National Quarterly Q1 2024 Reports. The empty office space figures were then multiplied by the asking rents (annual price per square foot) to determine the lost value.