Y’all Street Pushes DFW Office Market To Best Year For Absorption Since 2019

Thanks to its continued growth as a national financial hub, Dallas-Fort Worth’s 2025 office market put up its best absorption numbers since before the pandemic. 

The market completed four straight quarters of positive absorption in 2025 and ended the year with a total of nearly 2.4M SF absorbed. That was DFW’s best year-end performance since 2019 and quite the turnaround from the negative 4.7M SF absorption the market recorded during the fourth quarter of 2024, according to Cushman & Wakefield’s latest office report. 

"What's been driving that is that flight-to-quality story of tenants wanting space in better buildings,” Cushman & Wakefield Senior Research Manager Andrew Matheny told Bisnow. 

Asking rents at trophy office buildings hit a record high of $75.48 per SF in the fourth quarter, a 7.5% year-over-year increase. That number was buoyed by rents in the newest trophy buildings in Uptown, which can go for $100 per SF or more, according to Matheny. 

"That's pricing you typically see in the gateway markets like Miami or New York or LA,” Matheny said. “That's been a huge driver and an indicator of where the overall market's going."

Last year was also DFW's strongest year for leasing activity since 2022. New leasing totaled 13.7M SF in DFW during 2025, according to the Cushman & Wakefield report.

Technology companies accounted for the largest chunk of the quarter's 10 biggest office transactions, according to Savills' latest office report. 

The biggest lease of the quarter was 1Finity Inc.'s relocation to Richardson. Its 69K SF lease made it one of four technology companies among the top 10 deals of the quarter.

Along with that increase in leasing, DFW’s vacancy rate dropped for the fourth straight quarter to 24.8% at year’s end. That’s a 30-basis-points decline from the third quarter to the fourth, according to the Cushman & Wakefield report. 

As Y’all Street grows in DFW ahead of the planned launch of the Texas Stock Exchange this year, vacancy rates in submarkets such as Uptown/Turtle Creek and Preston Center improved substantially year-over-year. 

“The two big winners for office in 2025 were Wall Street and Y'all Street,” Matheny said. “If you look at Manhattan, they had a really solid year for absorption, and same thing in Dallas.”

The Legacy/Frisco submarket absorbed more than 900K SF and had close to 2.9M SF in leasing activity for the year. Those numbers outpaced all other submarkets in both categories. 

The Richardson/Plano and Uptown/Turtle Creek subdistricts also had strong years, absorbing nearly 600K SF and more than 323K SF, respectively. And Los Colinas' 1.8M SF in leasing activity was the metro’s second-highest total in that category behind Legacy/Frisco.

Matheny attributed the high levels of activity in northern suburbs like Los Colinas, Frisco, Plano and Richardson to corporate relocations, as those cities are often top choices for companies looking to move to the metro.

Rightsizing was another major factor in the positive absorption throughout the year as remote work shrinks and companies determine how much office space they need, Matheny said. 

He expects the metro will continue to experience positive absorption in the quarters to come. However, there could still be some large companies that reconfigure their footprints since it's only been six years since the pandemic and the average lease term is five to seven years.

Construction activity remained at a historical low of less than 1.8M SF during the fourth quarter, and the 626K SF of deliveries in 2025 was the metro’s lowest level since 2013. 

But with demand for new office space so high in the market, Matheny said the region's construction pipeline could pick up in the year ahead as interest rates come down. Demand in Uptown is particularly high as its vacancy rate continues to fall. 

The biggest anticipated deliveries of 2026 are the 150K SF The Knox building in Uptown/Turtle Creek, the nearly 63K SF Henderson East along North Central Expressway and the 50K SF The Offices at Clearfork in South Fort Worth. Each of those are part of mixed-use projects located within established office corridors, according to the Cushman & Wakefield report.

The availability of trophy and top-tier office space could begin to dwindle in 2026, as demand is expected to remain high.

That could lead to tenants beginning to move down to lower tiers of office space, Matheny said.

Class-B and Class-C properties are very competitive and doing alright in the current market because they often cater to smaller tenants, Matheny said. Those tenants are more price-sensitive and aren't usually as affected by remote work as many bigger companies.  

"If you've got a good building and you're investing in the amenities, you'll continue to see demand," Matheny said of Class-B and Class-C buildings.