Dallas’ Office Market Success Reflects a Wider Regional Optimism

In the year 2020, the Dallas-Fort Worth area was home to around 7.6 million people. By 2024, that number had shot up to 8.3 million. 

Comparing these numbers and near future projections to the changing population numbers of other major metropolitan areas, many in Dallas are reveling in one seemingly foregone conclusion: that sometime in the next 10 years, or maybe even five, Dallas will bypass Chicago as the nation’s third-largest metroplex, behind only the New York-New Jersey area and Los Angeles. 

The confidence of a city that knows its growing value as a place where people and companies want to be is apparent when taking a deep dive into the current status of the Dallas office market.

“We’re growing at about 400 people a day in the metroplex. That’s significant,” said Bill Brokaw, executive vice president at Dallas-based developer Hillwood Urban, which is run by Ross Perot Jr., the son of the company’s late founder. “Ross always says that we’re probably going to overtake the Chicago metroplex by 2030. That’s a big deal.”

Micah Rabalais, director of research for North Texas at JLL and who also independently mentioned the area overtaking Chicago, noted that the Dallas area led the nation in 12-month job growth according to the most recent Bureau of Labor Statistics report, and that 2026 is starting off considerably stronger for the area’s office sector than 2025 had.

“Last year we started off a little softer, and then finished very strong in the second half of the year,” said Rabalais. “We’ve had stable rent growth across numerous submarkets, and we’ve got steady leasing activity across the board. All the fundamentals continue to be as strong as they were last year, or even stronger, in most cases. Objectively speaking, I think we’re in a great spot.”

This enthusiasm is justified by the influx of major companies, financial institutions, and larger, Class AA or trophy leases in the region of late.

According to a report by JLL, which notes that Dallas was second only to Houston in U.S. population growth in 2025, the Dallas office market saw 332,300 square feet of positive absorption in the first quarter of 2026, driven by “a handful of large tenant move-ins and expansions across several submarkets.”

The report also said that rent growth among pre-eminent assets remains “robust,” with destination Dallas submarkets such as Uptown and Preston Center averaging record-high rates.  

The report shows that the Uptown area saw an average direct asking rent of $70.47 per square foot while Preston Center saw average rents of $62.45 per square foot, by far the two highest averages in the Dallas area. 

“Your best assets in Dallas are leasing in some cases for two to three times more than the next class down,” said T.D. Briggs, an executive managing director at JLL. “Certainly that’s happening in Uptown. The AA trophies are leasing for a minimum two, probably two-and-a-half times what the next tier down might be leasing for.”

One prominent recent lease Uptown was Scotiabank’s signing for 133,000 square feet at Hillwood Urban’s Victory Commons One complex. The Dallas area attracted the company — beating out Charlotte, N.C. — thanks to millions of dollars in local and state incentives, according to a statement to Commercial Observer from Bill Kitchens, senior director of market analytics for CoStar. The September 2025 lease represented the largest lease to that point in the year in the Uptown area, and the complex is just a few blocks from the new two-building, 800,000-square-foot campus Goldman Sachs is building that is scheduled to open in 2028.

“Looking specifically at Dallas, banks and financial services firms continue to transition toward Texas, and are a significant driver of new leasing activity, particularly in specific areas such as Uptown or northern suburbs such as Plano and Frisco,” Ray Perryman, founder and CEO of the economic and financial analysis firm the Perryman Group, said in a statement to CO. “Energy firms are a core part of the tenant base but aren’t expanding as rapidly as finance. They are also more dispersed around the state, with substantial presence in Houston and Midland.”

Brokaw noted that his company’s tracking shows over 8 million square feet worth of prospective tenants in the Dallas-area office market, a number the area hasn’t seen since 2015.

“It could be existing users that are expanding, new relocations from out of state, a host of things,” said Brokaw, “but we track that pretty frequently, and when you hit 8 million, that’s a big number.”

That said, some of the past year’s largest office leases in the region occurred in the Dallas suburbs or surrounding areas. 

Lockheed Martin signed the largest lease of the decade in Fort Worth, renewing 455,000 square feet at the city’s Fossil Creek Business Park for five years. PennyMac Mortgage Investment Trust signed a new lease for 300,000 square feet in the Legacy-Frisco submarket, in what will eventually be a deal for the full building at 5025 Plano Parkway in Carrollton. And insurance giant Geico signed for 198,536 square feet at Galatyn Commons in the Richardson-Plano area.  

Even more encouraging than the region’s current success, however, are some of the tenants on the way.

“The market has now posted eight consecutive quarters of positive net absorption,” Kitchens said in his statement to CO. “Firms such as Morgan Stanley are actively searching for space, according to local contacts. [Dallas Business Journal reports that the company will seek around 500,000 square feet in the area.]  Goldman Sachs has secured roughly $18 million in city incentives tied to job creation ahead of its 800,000-square-foot Uptown-Turtle Creek campus, set to open in 2028 and consolidate local operations for up to 8,000 employees. At the same time, Wells Fargo opened two buildings in Las Colinas totaling 850,000 square feet, supporting 4,500 employees.”

On top of all these, Dallas’ stature as a financial hub is also set to skyrocket due to the sudden presence of several major exchanges. 

The Texas Stock Exchange is a new national stock exchange being launched in summer 2026 with financing from the likes of BlackRock, Citadel and J.P. Morgan Chase, to name just a few, that intends to compete with the New York Stock Exchange. Its first IPOs are projected for early 2027, and a video from Yahoo Finance in late April 2026 projected that it might land the IPO for Elon Musk’s SpaceX. In addition, NYSE Chicago — itself a 2019 rebranding of the Chicago Stock Exchange, which served that city since 1882 — will be moved to Dallas and rebranded as NYSE Texas. Together, these new and rebranded exchanges show just how much financial activity is increasingly moving south.

“J.P. Morgan continues to grow here. There are more employees at J.P. Morgan in the Dallas-Fort Worth area than in New York,” said Brokaw. “And now we’re starting to see the midsize financial companies starting to come out, like private equity and smaller and midsize banks. This is really where financial companies are looking at their ability to attract [talent]. For example, Goldman’s average age employee is around 27. They’re looking to attract the young workforce. Well, the young workforce lives, plays and works in the Uptown area. And financial groups want to be connected to each other.”

With all this, though, Briggs mentions that the recovery can be seen as one of ”the haves and the have-nots,” a reference to the massive oversupply of Class B and C — and, in some cases, older Class A — office buildings. Many of those buildings were constructed in the 1980s and now sit close to vacant as prestigious new tenants flock to the newest, most amenity-filled office product.

But, even there, opportunities for progress exist. 

Bradford UPT Partners, an affiliate of Bradford Companies, acquired Uptown Tower, a 254,000-square-foot, 12-story Class A office building in Uptown Dallas with 54.2 percent occupancy, in July 2025, with an eye toward upgrades including a redesigned lobby with communal seating, a fitness center, and flexible coworking suites. 

“As a principal investor, we’re going to invest in opportunities where we can create serious returns, and right now the value office product is where we can make the best returns,” said Kevin J. Santaularia, president and CEO of Bradford Commercial Real Estate Services, who noted that the company has $10 million invested in the Uptown Tower upgrades. “The broken office space is where we have paid attention for the last five years — B and C assets we can restore to Class A status. We bought Uptown Tower at $80 a foot out of bankruptcy. You tell me where you can find an $80-a-foot building in Uptown, and I’ll buy another.”

That said, while much of that Class B and C (and older Class A) oversupply might not attract similar investment, Briggs said that “the list of the haves [as opposed to have-nots] has grown quite a bit. It is enhanced tremendously. We feel like we’re back in the game and very active.”

The region’s K-shaped progress, inspired by a flight to quality, is such that the biggest obstacle to growth in the region will be the lack of trophy space to accommodate the sort of firms that now desire a significant presence in the Dallas area. 

“Construction activity has remained so low, and the flight-to-quality trend of users moving to better space has continued on for long enough, that we’re starting to see a shortage of larger blocks of space in those trophy buildings and upper-tier Class A buildings,” said Andrew Matheny, senior research manager at Cushman & Wakefield. 

Brokaw cited part of the issue as being the difficulty in getting new product of this caliber built without major anchor tenants already in place. Others see the same problem.

“When it comes to office development, it starts with the lease,” said Dave Powell, a partner at the law firm King & Spalding. “You’ve got to have the anchor tenant who is committed to the project in a significant way in order to get the debt capital — and sometimes the equity capital — to build that new project. Until you find a large user who’s willing to commit to a new building, you’re not going to have a lot of new construction starts in the office space.”

Brokaw adds tightening bank requirements and rising construction costs to the factors inhibiting the development of new supply. 

“Banks are still pretty tight in how they want to review a new building going up at significantly higher rates, and construction pricing has shot up pretty strongly,” said Brokaw. “When you’re looking at rental rates that have been growing in Uptown from $40s or $50s to $60s (per square foot), and now a new building is going to require $80 to $90 triple net, it’s a different ballgame. Construction pricing and lender requirements are all having a big impact on what to start, and it’s going to be really hard to push back. There needs to be some pre-leasing involved. I think it’ll happen, but the supply is dwindling.”

One other factor affecting the region is that for some there’s a perception that, after several years of uncertainty and reserve, particularly regarding employees returning to the office full time, 2026 feels like the year the business community was finally able to leave the remnants of the COVID-19 pandemic in the rear-view mirror. This, it seems, might be the final piece of the puzzle for a market poised for the leap from evolving to dominant in the country’s financial landscape.  

“From a guy-on-the-street [perspective], I feel like we’re finally done with COVID,” said Briggs. “Institutional public clients don’t worry about that. They know what their space needs to look like and how they need to use office space. Everybody keeps these ‘tenants in the market’ lists, and what we’re seeing is deals coming off those lists and actually getting executed and done, and the biggest difference is that COVID is finally over. Institutions feel confident in their real estate choices again. It almost feels like last year was Dallas learning to walk confidently, and this year it’s running.”

Larry Getlen can be reached at lgetlen@commercialobserver.com.