Y'all Street Pushes DFW Office Leasing In Q3
The financial services sector continues to drive momentum in Dallas-Fort Worth's office market as Y'all Street fuels the flight-to-quality trend — though Class-B is starting to stir.
For the second straight quarter, the financial services and insurance industry made up half of the top 10 office leases in DFW. Those five transactions totaled around 550K SF during the third quarter.
PennyMac Financial's new 300K SF deal in Carrollton and Scotiabank's 133K SF lease at Victory Commons One in Dallas accounted for the bulk of that total. The two financial services leases were only surpassed by a 455K SF renewal by Lockheed Martin in Fort Worth during Q3, according to the latest DFW office market snapshot from Avison Young.
“The growth of 'Y'all Street' and the foundational impact of the Texas Stock Exchange are proving to be a fundamental catalyst for the DFW office market's momentum,” Avison Young Managing Director Greg Langston said in an email. “The financial services sector is actively leading the charge across the Metroplex, accounting for a disproportionate share of major leasing activity.”
A new 57K SF lease by cash management company Sesami in Irving and a 50K SF expansion by Goldman Sachs in the Dallas CBD were also significant financial services deals in the quarter, according to Savills’ Q3 office report.
The TXSE gained approval from the Securities and Exchange Commission this week and plans to launch next year. The exchange aims to make its headquarters in the heart of Dallas, including executive offices, a conference center and a broadcast center.
“The establishment of the TXSE, alongside major commitments from firms including Goldman Sachs, Wells Fargo, Scotiabank, and PennyMac Financial Services, solidifies Dallas as a top-tier financial hub and ensures strong demand for best-in-class office space,” Langston said.
The Metroplex has had 11.4M SF leased so far during 2025, putting it nearly 14% over the market’s five-year average. Roughly 725K SF of net absorption during Q3 brought the year to 1.6M SF total.
Class-A assets drove that growth, accounting for 70% of the 4M SF total leased in Q3 and responsible for 1.9M SF of positive net absorption so far this year, according to Avison Young.
The region's overall availability rate decreased to just under 28%, which is a decline of 220 basis points from last year. The Savills report says that decrease shows the market is stabilizing, though the new office product under construction could push the availability rate higher in the near term.
New construction in the Metroplex reached its lowest level since 2012, according to Avison Young’s report. A little over 2M SF is under construction, with nearly 70% of it already preleased.
The only Q3 delivery was the 642K SF 23Springs building in Uptown.
Preston Center and Uptown account for almost 80% of the Metroplex’s development pipeline.
Trophy assets pushed direct asking rents in the region to a record high of more than $36 per SF. Rents for trophy space rose 8% year-over-year to $62.91 per SF, while Class-A and B rents each garnered around a 1% increase.
The data shows the DFW market is in transition, Avison Young Manager of Market Intelligence Ariel Guerrero said.
“While Trophy and Class A assets are leading the recovery, the stabilization in Class B leasing activity suggests broader momentum may be building heading into 2026,” Guerrero said in a statement.
In addition to the asking rent increase for Class-B office assets, the subcategory showed signs of stabilization with 147K SF absorbed during Q3.
That stabilization and reliability have attracted a new crop of investors and tenants. Modernizations and the widening gap between trophy office buildings and everything else have kept some Class-B product competitive in the Metroplex.
