D-FW Office Vacancies Dip, Pipeline Swells
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The D-FW office market did some flexing this summer. Vacancies fell below 20%, and it was one of only three markets to clock more than 2 million square feet in development last month.
Sales have also been humming. Nearly $2.9 billion worth of D-FW office properties changed hands during the first seven months of 2026. That was the second-highest sales volume among the 25 major markets analyzed by CommercialCafe in its latest national office report.
D-FW office properties sold for $214 per square foot on average, slightly above the national average of $198. Figures suggest investors are still finding opportunities in North Texas after several difficult years for commercial real estate.
High interest rates, remote-work trends, and looming loan maturities have squeezed office owners, leading some to sell buildings at steep discounts. The reset has been particularly evident among older properties. Case in point, the 20-story Tower at Park Lane in Dallas sold for $66 million in late 2024 — roughly half the price it commanded in 2017. Its new owner planned another $13 million in improvements to reposition the property. More recently, Ross Tower hit the market after undergoing a $14 million renovation, providing another test of investor appetite for older but upgraded downtown properties.
The Metroplex had 2.82 million square feet of office space under construction in July. Boston led the nation with 3.4 million square feet, followed by Manhattan with 2.9 million. The three markets accounted for nearly 31% of the approximately 29.5 million square feet under construction nationally.
D-FW also represented an outsized share of the southern pipeline. Along with Austin and Houston, Texas markets accounted for more than half of the office space under construction across the South and roughly 16% of the national total.
Still, considerable slack remains in the market. D-FW’s average office vacancy rate stood at 18.67% in July, above the 17.7% national rate. But that represented meaningful improvement. D-FW exceeded 20% vacancy as recently as May and only recently dropped below that threshold for the first time since 2023. Average listing rates last month reached $32.99 per square foot, just below the national average of $33.58.
