According to a report by Price Waterhouse Coopers and the Urban Land Institute, the DFW area will remain an active market next year. The metroplex was named the No. 1 metropolitan statistical area (MSA) for commercial and residential real estate in 2025, beating out Miami at No. 2 and Houston at No. 3.
“Return-to-office momentum is building for institutional users, and since the election, there’s been an uptick in leasing velocity,” said T.D. Briggs, executive managing director of JLL, said in a statement, per WFAA. JLL expects positive absorption in the new year, meaning more space is leased than vacated.
According to Briggs, office conversion projects are also slowing. As detailed in The Dallas Express in October, North Texas experienced a trend of office-to-industrial conversions amid high office vacancy rates in the region. In the third quarter of 2024, nearly 27% of office space in North Texas was vacant, compared to less than 10% for industrial properties.
Robbie Baty, Cushman and Wakefield’s vice chairman in DFW said while many companies are opting for smaller office footprints, deals are nevertheless steadily closing.
“A lot of (deals) are smaller than they used to be, but they are right-sizing and correcting their space … instead of sitting on hold and doing short-term deals,” he said.
Bady expects offices in walkable neighborhoods, like Uptown Dallas, to continue attracting more tenants. Earlier this year, San Francisco-based Sixth Street announced plans to invest over $3 million in renovating its office space in the neighborhood.
“It’s no surprise Uptown is the clear winner in the market over the last few years… There’s not a lot of vacancy in Uptown… And there won’t be because it’s very tight and it’s very desirable,” said Baty.