DFW office market tightens as finance tenants push Uptown
Key points:
- • Vacancy fell to 24.6% in 3Q26 as tenants absorbed 1 million square feet with no new deliveries, according to CBRE.
- • Morgan Stanley, Goldman Sachs, and Bank of America have committed to major Uptown projects that will add occupancy only as those buildings open.
- • A 3.48 million-square-foot pipeline, second only to Manhattan’s by CBRE’s count, will test rents, concessions, and vacancy in older submarkets.
November 2026 — The DFW office market tightened again in 3Q26 as vacancy fell 40 basis points to 24.6%, according to CBRE. Tenants absorbed 1 million square feet while developers delivered no new buildings.
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The improvement comes as financial services firms expand in Uptown Dallas. Morgan Stanley announced a new operations hub in September, joining Goldman Sachs and Bank of America in backing major office projects. A 3.48 million-square-foot construction pipeline will test the recovery as those buildings open.
Demand outruns new supply
CBRE’s third-quarter office figures show leasing climbed to 2.52 million square feet, up from 1.80 million in 2Q26. Net absorption beat the year-earlier total by 412,000 square feet.
Availability, which includes occupied space marketed for future lease, fell 130 basis points to 26.6%. Average asking rents rose to $35.09 per square foot, up from $32.14 in 3Q23.
Class A space carried the quarter. It absorbed 711,000 square feet, and its average asking rent reached $40.10 per square foot, up from $35.28 three years ago. Class B rents have held between $24.74 and $25.69 over the same stretch.
Cushman & Wakefield’s Q3 MarketBeat uses a different methodology but reaches the same verdict. It puts vacancy at 23.7%, the seventh straight quarterly decline, and leasing at 4.4 million square feet — the highest since 1Q19.
Cushman & Wakefield reported that building-level rents increased 4% year over year in Q3, compared with 2.3% a year earlier. A typical new lease still carries one month of free rent and an improvement allowance of $5 to $10 per square foot per year of term.
Finance rewrites the map
The DFW office market’s recovery has a clear address. Far North Dallas led CBRE’s submarkets with 733,000 square feet of Q3 net absorption, and Uptown/Turtle Creek followed at 209,000. Dallas CBD gave back 218,000 square feet.
Those gains reflect tenants already moving in. The finance commitments reshaping Uptown sit on a longer timeline. Their effect on regional net absorption will depend on how much space represents expansion rather than relocation within DFW.
Morgan Stanley plans to build at 2401 McKinney Avenue, just north of Woodall Rodgers Freeway, and will operate from temporary space at 1445 Ross Avenue in the meantime, CBS News Texas reported. City and state officials expect the hub to create more than 3,800 jobs.
The Dallas City Council voted in September to offer an $18.5 million economic development grant and two tax abatements. The governor’s office said the Texas Enterprise Fund extended a grant of nearly $44 million.
Goldman Sachs’ 800,000-square-foot Uptown project leads CBRE’s construction list. The 30-story Bank of America Tower at Parkside, which will also house the Texas Stock Exchange’s headquarters, has topped out and targets completion in 2027, according to architect KPF.
Granite Properties’ 23Springs, delivered in April 2025, reached 93% leased in July after securing 108,127 square feet in new commitments. The tower’s performance illustrates the demand for premium office space even as regional vacancy remains elevated.
Joe Lavis, tax partner and partner-in-charge of Whitley Penn’s Dallas office, points to cost as the draw. “Texas makes it easy to do business. We do not have a state income tax, so operating costs are lower,” he told Invest:.
He also flags the risk. “The challenge will be ensuring that very infrastructure keeps pace as the region continues to grow,” Lavis said.
The pipeline test
DFW carries the second-largest office development pipeline in the nation at 3.48 million square feet, trailing only Manhattan’s 4.4 million, by CBRE’s count. The pipeline grew by 497,000 square feet in Q3.
Cushman & Wakefield counts a smaller pipeline of 2.5 million square feet and expects only 280,813 square feet to deliver in 2026, the lowest total since 2011. User purchases, demolitions, and conversions have removed 3.7 million square feet of competitive inventory this year.
Investment sales have yet to match the recovery in leasing activity. Office investment sales fell to $649.93 million in Q3, down 43.2% year over year, according to MSCI Real Capital Analytics data cited by CBRE.
The fourth quarter will show whether demand holds. Cushman & Wakefield projects 2026 net absorption could reach 3.4 million square feet, which would mark the strongest year since 2017.
New supply sets up the next test. Trophy vacancy fell 730 basis points in a year, and Cushman & Wakefield expects concessions to fade for top-tier space as competing vacancy drops below 20%.
The impact on rents and concessions will depend on how much of the new supply remains unleased at completion. Projects built around named occupiers, such as Bank of America Tower with Bank of America and the Texas Stock Exchange, face different leasing conditions than speculative developments. Preleasing across the full 3.48 million-square-foot pipeline is the figure to watch as projects near completion.
The pressure will not land evenly. Las Colinas and the Dallas CBD posted Q3 vacancy of 29.2% and 34.7%, respectively. Owners of older buildings there will compete with the DFW office market’s newest towers for the same large tenants.
Want more? Read the Invest: Dallas-Fort Worth report.
