In 2025, Dallas’ office market began to show signs of recovery, with industry analysts closely monitoring its progress into the new year. According to JLL’s fourth quarter report, the market recorded positive annual absorption of office space for the first time since 2019. The year ended with 1.3 million square feet of positive absorption, which was a notable improvement from 2024 when there was nearly 1.5 million square feet of negative absorption despite a positive fourth quarter.
The normalization in the office sector has been attributed to two main factors: major employers such as AT&T, Toyota, and JP Morgan implementing return-to-work mandates, and a significant reduction in new office developments. The development pipeline reached its lowest level since 2012.
Despite these improvements, Dallas-Fort Worth continues to face high vacancy rates. At the end of the fourth quarter, the region’s vacancy rate stood at 27.2 percent—slightly higher than the previous year’s rate of 27.1 percent.
Office property sales also rebounded in 2025. Buyers returned to the market and sales volumes reached levels last seen in 2022. While many large trades in 2024 were located in suburban areas and included distressed properties or flex spaces, last year saw increased investor interest in Uptown Dallas assets.
Cousins Properties led an Uptown buying spree by acquiring The Link at Uptown for $281 million ($747 per square foot). Crescent Real Estate followed by purchasing Texas Capital Center at 2000 McKinney Street from Union Investment Real Estate; although the sale price was not disclosed, Union Investment described it as “a significant value increase.” The building had previously been bought for $226 million ($500 per square foot) in 2016.
JLL commented on these trends: “Capital is back and ready to be deployed.”
However, challenges remain for Downtown Dallas. AT&T announced plans to vacate its two-million-square-foot downtown office space for a new campus in Plano—a move that represents almost six percent of downtown’s total office inventory and is expected to raise vacancy rates further above their current level of about 33 percent.
Another setback occurred when Shawn Todd of Todd Interests decided to relinquish control over The National after Starwood Capital Group initiated foreclosure proceedings on the property following a $230 million refinancing deal made in 2023. Located at 1401 Elm Street, The National stands as one of the country’s largest adaptive reuse projects aimed at revitalizing aging downtown offices; it opened in 2020 after receiving $150 million in state and local incentives.
