Dallas Office Market
Annual full-service asking rental rates increased by 2.0% year over year to $31.17/SF but eased by 0.2% from the historical high reported in the previous quarter. Despite positive occupancy in the quarter, supply ultimately outpaced demand, causing overall vacancy rates to rise to a historical high of 24.7%. The under-construction pipeline increased to 2.8 MSF, up from the recent low of 2.3 MSF reported in the previous quarter. Total leasing activity closed the quarter at 3.6 MSF, reflecting declining quarterly leasing activity due to smaller and fewer deals being signed. Leases signed averaged 4,674 SF per deal, with average deal size decreasing by 3.2% quarter over quarter.
Dallas Industrial Market
The market realized 6.8 MSF of positive absorption in the second quarter of 2025, with quarterly demand narrowly matching supply at 6.9 MSF. This is the narrowest the absolute quarterly spread between supply and demand has been since the second quarter of 2017. Overall rental rates declined by 1.9% year over year from the historical high to $9.68/SF. This is the first yearly rent growth decline since 2017. The under-construction pipeline increased for the third consecutive quarter to 31.2 MSF, rebounding to levels reported at the beginning of 2024. Overall construction activity continues to remain low relative to recent years where the pipeline reached a high of 75.5 MSF at the end of 2022. As of the end of the second quarter of 2025, vacancy decreased by 30 basis points year over year to 9.1%, reflecting the second consecutive quarter of vacancy declines as year-to-date demand has outpaced supply in the first half of the year.
Download Dallas Industrial Market Report 2Q25