In 2025, the Dallas office market showed signs of stabilization, marking its first annual positive absorption of office space since 2019. According to JLL’s fourth quarter report, last year ended with 1.3 million square feet of positive absorption. This turnaround follows a challenging 2024, when the market only saw positive absorption in the final quarter and finished the year with nearly 1.5 million square feet in negative territory.
Two main factors contributed to this shift. Major employers such as AT&T, Toyota, and JP Morgan implemented return-to-work mandates, which increased demand for office space. Additionally, new office development slowed significantly, reaching its lowest level since 2012.
Despite these improvements, vacancy rates remain high. At the end of the fourth quarter, Dallas-Fort Worth’s vacancy rate stood at 27.2 percent—a slight increase from 27.1 percent during the same period a year earlier.
Office sales activity also picked up in 2025. The volume of trades reached levels not seen since 2022 as investors showed renewed interest in properties located in Uptown Dallas and other areas. In July, Cousins Properties acquired The Link at Uptown for $281 million—about $747 per square foot—kicking off a series of high-profile deals in that district. In September, Crescent Real Estate purchased Texas Capital Center at 2000 McKinney Street from Union Investment Real Estate; while financial details were not disclosed, Union stated that “the sale represented ‘a significant value increase.’” The firm originally bought the building for $226 million ($500 per square foot) in 2016.
JLL’s outlook is optimistic: “Capital is back and ready to be deployed,” according to its report.
However, challenges persist for Downtown Dallas. AT&T announced plans to relocate from its two-million-square-foot downtown office space to a new campus in Plano as early as 2028—a move that could further raise downtown’s already high vacancy rate of about 33 percent (Partners Real Estate). AT&T currently occupies nearly six percent of the submarket’s total space.
Another setback came when Shawn Todd of Todd Interests revealed he would surrender ownership of The National at 1401 Elm Street following foreclosure by Starwood Capital Group. Todd had converted the property into one of the largest mixed-use projects in the country after securing $150 million in incentives and $230 million refinancing from Starwood Capital Group.
These developments highlight ongoing difficulties for central Dallas even as some segments of the market recover.
