North Texas office net absorption plateaus while construction climbs

Fort Worth was far behind Dallas, posting significant negative net absorption

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While the office sector is still struggling in many markets, the Dallas-Fort Worth metroplex appears to be holding its own.

North Texas just had its third consecutive quarter of positive net absorption, according to the Dallas Business Journal. The region had over 556,000 square feet of positive net absorption in the second quarter of 2022.

Despite steady growth in select submarkets, overall, North Texas is still experiencing slower than usual leasing activity, according to the most recent Avison Young report. Between Q1 and Q2, class A and B vacancy plateaued at around 25 percent. Higher commuting costs and some companies adopting a hybrid work model have complicated the return to office, says Avison Young.

Meanwhile, office projects under construction were up about 18 percent, with the metroplex adding nearly 6 million square feet of new commercial space since last quarter. During this time, seven new developments totaling just under 1.4 million square feet broke ground.

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The largest was 2323Springs in Uptown, with over 622,000 square feet. Completed constructions include phase II of The Epic and the PGA of America headquarters.

Dallas proper had 659,000 square feet of positive absorption with its far North submarkets of Uptown and Turtle Creek posting net absorptions of about 335,000 square feet and 220,000 square feet, respectively.

But not all is well in North Texas, Fort Worth had a negative net absorption of about -103,000 square feet. The majority of its surrounding submarkets posted negative figures as well, DBJ reports.

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— Maddy Sperling