Office: The Bifurcation
The headline vacancy rate for DFW office sits near 21%, a historic high. However, this figure masks a profound flight to quality. Newer Class A assets (built post-2015) in premier submarkets like Uptown and Preston Center are seeing vacancy rates below 12% and asking rents pushing past $65/SF NNN.
Conversely, older stock in the CBD and suburban nodes (like the Stemmons Freeway corridor) face mounting distress, with values dropping 30-50% from peak. Conversions to residential remain difficult due to deep floorplates and high costs, meaning many of these assets are destined for demolition or long-term obsolescence.
Key Metric: Net Absorption
Q3 2024 saw negative net absorption of 1.2M SF, driven almost entirely by large block givebacks from tech and telecom tenants in legacy campuses. Meanwhile, sub-10,000 SF leasing velocity remains strong.