According to the most recent “Emerging Trends in Real Estate” market report by PwC and the Urban Land Institute (ULI), Dallas/Fort Worth ranked 3rd out of the 80 U.S. markets to watch in overall real estate prospects for 2023. As part of the “Sun Belt”, markets in the South and Southeast are still affordable for businesses and residents, even while powerhouse economies like Dallas/Fort Worth have attracted – and will continue to attract – a wide range of businesses. With 16 percent of the “Emerging Trends” population, the Sun Belt market is projected to generate 28 percent of its new jobs between now and 2025. Despite their size, these metro areas average over 5 million residents, the second most of any sub-group in the survey – almost all are among the fastest-growing markets in the country. Moreover, their economic performance has been solid through thick and thin. Though every market lost jobs during the pandemic, recovery has been much quicker and more complete in the Super Sun Belt markets.
According to a recent article in Texas Real Estate Business magazine, the Dallas office market and North Texas region continue to evolve as leading destinations for corporate relocations, led in part by a favorable business climate. This reputation as a top landing spot for regional workforce consolidations and outright relocations from other states has helped Dallas become a national leader in some key back-to-work metrics. Of the 14 submarkets in the Dallas suburbs, Las Colinas led the way in Q3 2023 with 86,325 SF of net absorption.
According to Cushman & Wakefield’s recent Q3 2023 “Marketbeat Dallas/Fort Worth” office report, the Dallas-Fort Worth (DFW) economy continued its recovery in Q3 2023. With over 4.3 million people employed, the region has fully recovered the jobs lost at the onset of the pandemic. DFW’s population increased by 135,564 people year-over-year (YOY). As of September 2023, the population reached a new high of over 8.1 million residents.
Per Moody’s Analytics, office-using jobs, positions which fall within business and professional services, information technology, and financial activities, grew by a total of 57,806 positions, when compared to Q3 2022. Each subgroup with office-using jobs grew as well. Professional and business services, a leading indicator of office demand, recorded a YOY increase of 4.7% (36,294 jobs), while financial activities and information technology grew by 6% (25,331 jobs) in the same period. Dallas office using employment totaled 1.3 million jobs in September of 2023.
According to Avison Young’s “Third Quarter 2023 DFW Office Market Report,” DFW’s economy continues to be one of the most robust in the U.S. due to its low cost of doing business, economic diversity, and pro-business attitude. As of the third quarter of 2023, Dallas / Fort Worth’s total job growth hit another new peak, rising by more than 400,000 jobs, or 10.4% since the pandemic recovery. In comparison, office jobs increased by 20.6% or 219,000 net new jobs over the period. Year-on-year job gains have also shown solid strength.
Throughout the office market downturn, landlords did not lower asking rates in DFW, instead offering competitive concession packages that included free rent and additional tenant improvement dollars. Q3 2023 marked a continuation of DFW’s recovery. The long-term outlook for the region remains very positive, especially compared to other large, U.S. metro areas.