Dallas Office Vacancy Rates Fell to 25.8 Percent
As vacancies decline in the Dallas office market, businesses face rising rents in premium areas like Uptown and Preston Center.
Updated on Oct. 9, 2026 in Commercial
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The Dallas office vacancy rate dropped to 25.8 percent in the third quarter of 2026 as building demolitions and conversions reduced total supply. This shift comes as financial firms expand their footprint in the region, driving up costs for commercial tenants.
Why it matters
Rising demand for premier office space, paired with a limited supply of new construction, is pushing up gross lease costs in key hubs. This trend impacts business operating budgets and the broader cost of doing business within the Dallas professional corridor.
Dallas office vacancy hit 25.8 percent in Q3 2026, marking a one percentage point decline from previous levels. Meanwhile, gross rents in Uptown have reached approximately $130 per square foot, following significant basis point increases in that area and Preston Center.
The players
Goldman Sachs
A global financial institution currently expanding its corporate footprint in the Dallas market.
Morgan Stanley
A financial services firm that maintains significant office space requirements in premium Dallas sectors.
The details
The dip in vacancy is largely attributed to the removal of older stock through demolitions and building conversions, which constrains available supply. Simultaneously, landlords are raising full service gross rates, supported by the inclusion of tenant improvement packages that attract firms seeking top-tier facilities. Financial companies are leading this demand, further intensifying competition for space in corridors like Katy Trail and McKinney Avenue.
Timeline
Q3 2026: Dallas office vacancy rate reached 25.8 percent.
2028: Goldman Sachs is scheduled to open its NorthEnd office.
2031: Morgan Stanley is set to occupy 2401 McKinney Avenue.
2035: Office space in the Katy Trail area is projected to reach 5.8 million square feet.
Money Landscape
The Dallas office market is currently characterized by a tightening supply of premium space, contrasting with historical periods of overbuilding. This development follows the high-cost investment trend exemplified by the $268 million Knox Street project, which prioritizes mixed-use accessibility.
Business leaders should prepare for higher lease renewals and increased competition for prime office footprints as vacancy rates continue to trend downward. Consult with a commercial real estate professional to model long-term occupancy costs before negotiating new lease terms.
The takeaway
Commercial tenants in premium Dallas corridors are facing a more competitive and expensive environment as supply tightens. Review your company's current lease expiration schedule and engage a real estate broker to discuss the impact of rising gross rent rates on your upcoming budget cycles.
Further reading
For more on shifting property costs, visit our Commercial section.
Source note: This article includes information reported by The Real Deal New York.
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