A new report from Savills real estate firm says the Dallas-Fort Worth office market ticked up during the final quarter of 2024.
With around three million square feet in signed leases in the fourth quarter of 2024, leasing activity was up an impressive 18% compared to the previous year. The rise was partly driven by the large number of renewals and relocations experienced in the metroplex.
The report pointed to several major transactions, like Merit Energy leasing over 100,000 square feet in Dallas, swapping the company’s former Galleria-area home for a massive new headquarters in Two Lincoln Center. Merit is expected to occupy three floors of the 19-story building at 5420 Lyndon B. Johnson Freeway.
The report also highlighted Halff Associates’ transaction to lease 80,000 square feet in Richardson.
“The North Dallas Corridor submarket continues to be an active submarket, seeing two of the top transactions this quarter and contributing to approximately 25% of the total leasing observed,” read the report.
Office buildings saw a substantial increase in rents during the period. The overall asking rate averaged $30.92 per square foot during the fourth quarter, an 8.4% jump from one year earlier. The rising rates were prompted by demand for Class A office space, which comprised roughly 65% of leasing activity during the quarter.
The report’s authors say that DFW’s healthy unemployment rate, recorded as 3.9% in October according to the Bureau of Labor Statistics, is one reason the metroplex maintains a positive outlook for 2025. The city’s persistent population growth and commerce-friendly environment were also cited.
“Due to the region’s strong population growth and business-friendly environment, companies continue to see the Dallas-Fort Worth metroplex as an attractive option as they expand.”
While office space availability shrank just over 2.5% in the fourth quarter of 2024, the report suggests the pipeline of around 4.5 million square feet of office space will help alleviate any shortages. Savills also anticipates the transition to higher-quality office space will expand the price spread between Class A and B buildings.