DFW Office Market Starts 2025 With 1.1M SF Leasing Boost, But Employment Storm Could Be Brewing
The Dallas-Fort Worth office market is off to a strong start so far this year thanks to a raft of big leasing deals and a push for employees to get back to the office.
But it remains to be seen whether that momentum will continue through the rest of 2025, with office-using employment taking a nosedive over the same period.
The 3.5M SF of leasing activity the region saw in the first quarter was up more than 1.1M SF over the same period last year. Much of that activity was in the North Dallas submarket, with half of the quarter's 10 biggest deals happening there, according to SAvills' Q1 2025 office market report.
Deals included Toyota Financial Services snatching up the entirety of the 242K SF The Offices at Southstone Yards in Frisco and Sally Beauty Holdings moving its corporate headquarters to the Legacy West development in Plano.
While those moves contributed to DFW’s active market, Savills Research Manager Deandre Prescott said it’s too early to tell whether those big deals are the beginning of a trend, though the firm’s outlook for DFW is optimistic.
“Growth remains strong in Texas,” Prescott said via email. “It’s reasonable to expect Dallas-Fort Worth will continue to attract new firms from out-of-state as they seek growth opportunities.”
The office availability rate in DFW dropped to just over 28%, which was 180 basis points lower than last year, and asking rental rates rose nearly 8% over that timeframe. Savills noted that the office availability rate is expected to increase in time, with more than 4M SF of Class-A office space expected to deliver over the next three years.
Demand for Class-A office space made up around 70% of Q1's leasing activity, and the asking rental rate spiked more than 9% year-over-year, per the report.
Some of that can be attributed to firms looking to boost office attendance amid an ongoing return-to-office push at many DFW companies, Prescott said.
“With companies implementing ways to bring workers back to the workplace, this will likely have a positive impact on leasing,” Prescott said. “Several large occupiers have signaled for stricter attendance policies, which is a positive for leasing momentum.”
Going forward, Savills predicts leasing activity will exceed the five-year quarterly average, assuming DFW's economy remains strong.
Yet one area that isn’t growing is office-using employment, according to the report.
After rising over the last several months of 2024 to around 20,000 jobs, the metric took a sharp downturn at the beginning of the year. Q1 saw about 1% growth, half of its December level and down starkly from a high of almost 12% growth in 2022.
Savills uses data from three job sectors for the chart — information, financial activities and professional services.
“The drop off is attributed to the decrease seen within the information sector, coupled with a slight decrease among professional and business services,” Prescott said, adding that the financial activities sector continues to see positive year-over-year growth.
