Dallas-Fort Worth’s Office Market Steadies

In the first quarter of 2022, Dallas-Fort Worth’s office market had a steady performance in terms of both construction and leasing activity, according to CommercialEdge data.

Nearly 5.5 million square feet of office space was underway across the Metroplex by quarter end, an amount representing 2.0 percent of stock; on a national level, the rate stood at 2.2 percent. Construction completions were relatively modest in size, as only 731,000 square feet were added to the metro’s supply.

More than 1.3 million square feet broke ground in the metro in Q1, most of the space pertaining to traditional offices. Some 745,000 square feet, or 57.3 percent of the total, entered the pipeline in March.

The largest project to debut was the 335,000-square-foot office component of The QUAD, a mixed-use development in Uptown Dallas. Stream Realty Partners broke ground on the 12-story tower in March, with expected completion in early 2024.

Small improvement in office vacancies

In terms of vacancy, the Metroplex’s office market had a relatively smooth ride in the first quarter of 2022. The metro’s vacancy rate started at 17.6 percent in January; while February brought a 50-basis-point improvement, to 17.1 percent vacancy, the month of March saw a minor relapse, with vacancy rising again month-over-month to 17.3 percent. However, the situation was still better than the one recorded in March 2021, when vacancy had reached 19.1 percent.

The metro’s asking rent held steady at $28.66 per square foot in January and February; however, the month of March brought a minor uptick to $28.70 per square foot. The value remained lower than the national rate of $38.65 per square foot.

In one of the largest leases of Q1, a locally based advertising agency, TRG, signed a contract for 101,808 square feet across multiple floors at The Stack at Deep Ellum, a 207,299-square-foot office building in Dallas. The firm intends to finalize its headquarters’ relocation from 2801 NCX in Uptown Dallas by the first quarter of 2023.

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