Year-to-date deliveries in DFW Office once again surpass 2 million sq. ft.

Dallas-Fort Worth Office
Ten months into 2023, the overall vacancy rate in the Dallas-Fort Worth (DFW) office market is 24.4%, up 130 basis points from the prior year’s 23.1%. Year-to-date, net absorption—move-ins minus move-outs—is at 2.3 million sq. ft., up 18% from the prior year-to-date number of 1.9 million sq. ft. A notable move-in within the last year includes Uber Technologies occupied 346,647 sq. ft. of office space at 2500 Pacific Avenue (East Dallas submarket) in April 2023. Other tenants continue to evaluate their commitment to larger office spaces—Santander moved out of Richland Pointe Office Center (200,084 sq. ft.) at 5201 Rufe Snow Drive in October 2023. Year-to-date, deliveries are at 2.0 million sq. ft., nearly doubling from the prior year-to-date figure (1.1 million sq. ft.) Roughly 30% of year-to-date deliveries are fully leased, partially contributing to the increase in the overall vacancy rate. The average asking rate currently stands at $29.60 per sq. ft., up slightly from $29.22 per sq. ft. in October 2022.

Dallas-Fort Worth Industrial
The overall vacancy rate in the DFW industrial market as of October 2023 is 8.2%, up 280 basis points from 5.4% in October 2022. Year-to-date, net absorption is at 31.4 million sq. ft., up slightly from the previous year of 31.0 million sq. ft. Year-to-date, deliveries registered at 65.9 million sq. ft.—a record-high for the metro’s industrial sector. Construction is at 46.0 million sq. ft., 44% down from previous year’s tally of 82.6 million sq. ft. Year-to-date, leasing activity comprised of new leases and renewals—is at 58.8 million sq. ft., 14% down from 68.2 million sq. ft. the prior year. The metro’s average monthly rental rate reached $0.76 per sq. ft.—a record-high for the metro’s industrial sector.

Dallas-Fort Worth Retail
As of October 2023, the overall vacancy rate in DFW’s retail market remained flat from the previous year at 4.7%. Year-to-date, net absorption is at 2.7 million sq. ft., down from 6.3 million sq. ft. Construction is at 5.0 million sq. ft., up from 4.1 million sq. ft.—with the Far North Dallas (1.7 million sq. ft.) and North Central Dallas (1.2 million sq. ft.) collectively accounting for 59% of projects underway. Notable projects underway within the past year include a 160,000-sq.-ft. supermarket near the intersection of West University Drive and Texas State Highway 289 in March 2023, and a 70,000-sq.-ft. retail space near the intersection of West Jackson Road and Old Denton Road in December 2022. The average asking rate increased to $19.92 per sq. ft.—a record-high for the metro’s retail sector.

Dallas-Fort Worth Multifamily
Year-to-date, 13,863 multifamily units have been absorbed in DFW, more than doubling from 6,579 units this time last year. Overall occupancy in the metro’s multifamily sector declined to 90.3% in October 2023, down 150 basis points from 91.8% in October 2022. Year-to-date, deliveries amounted to 30,904 units, up 28% from the prior year-to-date statistic of 24,075 units. A notable completion within the last year includes a 4-story, 550,000-sq.-ft. (499 units) apartment building (Hasting’s End) at 9800 Harpers Lane in May 2023. The average monthly rental rate currently stands at $1,499 per unit, slightly down from $1,504 per unit last year.

Alex Babcock
Senior Research Analyst
[email protected]
tel 713 275 9618