New office space becoming scarce in Dallas-Fort Worth

The latest results for leasing in Dallas-Fort Worth confirm a strong beginning to the year. New leasing was marked by larger deals and an increase in tenants maintaining or expanding their footprints, while local contacts report the prevailing narrative of users downsizing their spaces has eased.
As firms continued to shift in favor of newer spaces and the pipeline of new space has thinned, the availability rate for buildings 3 years old or less has trended lower in recent quarters. Overall availability for newer spaces is 30%, down from a peak of 37% reported in late 2024, and landing near the U.S. average at 29%.
Conversely, the drawdown in the newest spaces comes as availability has shifted higher to 12% buildings aged 3 to 10 years old, up 2% year over year. This shift suggests some still-available spaces are aging out of this category for the newest buildings, including 6100 Legacy Drive in Plano, which was constructed in 2021 and remains unleased. This trend underscores that office demand goes beyond the flight to newness and must factor in location, build-out and immediate neighborhood amenities.
As availability for the newest space tapers, the pipeline for new space continues to decline. The 5 million square feet under construction is nearing a 10-year low, and construction starts have almost flatlined over recent months. Pre-leasing for new construction stands at 70%, with the greatest supply-side risk landing in suburban office nodes such as Frisco/Prosper and Upper Tollway/West Plano.
With a drawdown in newer spaces, well-located second- and third-generation buildings are poised to benefit. Local contacts have commented that buildings near major thoroughfares, decision-makers and plentiful neighborhood amenities are in a strong position to capture future demand.