As more companies push to get their workers back in the office, the Dallas-Fort Worth area is one of the top U.S. markets for pending office deals.
The D-FW area, Houston and Boston are the office markets that are seeing the most tenants scouting for new space, according to a new report by commercial property firm CBRE Group.
“Three markets — Houston, Boston and Dallas-Fort Worth — had tenants in the market levels that exceeded their pre-pandemic levels,” according to the new CBRE report.
The surge in North Texas businesses looking at office space follows a sharp decline in office leasing in the area after the COVID-19 pandemic hit.
With infection levels declining, more businesses are making plans for their future office space needs.
The number of office tenants in the market nationwide is at the highest level since early 2020, before the COVID lockdowns, according to CBRE’s research.
Currently only about 50% of office buildings in the D-FW area are back in business with employees returning, according to the latest estimates from Kastle Systems.
Office building occupancies dropped significantly at the end of 2021 with the outbreak of the omicron variant.
“Occupiers remained hesitant to make new commitments, and leasing activity tapered,” CBRE analysts said. “Leasing may pick up as omicron caseloads continue to rapidly decline.”
That’s what CBRE executive vice president Trey Smith is seeing in the D-FW area. “It has picked up significantly,” Smith said. “Some tenants let their leases expire and have gone month to month or made short-term extensions.
“They are coming up against decision time and have to do something.”
Smith said some local office tenants are opting for subleased office space. The D-FW area has millions of square feet of empty sublease office space that companies are looking to fill with new leases.
“Some of the better subleases have started to get filled — stuff that’s got some term left,” Smith said.
Businesses that haven’t been looking for office space in North Texas during COVID may be surprised to find fewer options in some areas, especially in Uptown, where most of the new office buildings are filling up.
“Some brokers are having some difficulty convincing their clients that there is really not a ton of quality space,” Smith said.
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