Q2 2025 Commercial Real Estate Figures - DFW Metro

U.S. Commercial Real Estate Report
Compiled by Park Industrial

10 Minute Read​ | June 30, 2025

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Executive Summary​​

The Dallas-Fort Worth (DFW) commercial real estate market continues to demonstrate resilience in Q2 2025, particularly within the industrial and multifamily sectors. Despite macroeconomic headwinds and elevated interest rates, investor appetite remains strong, especially among institutional buyers targeting income-producing assets. Municipal acquisitions and public-sector demand are emerging as unique sources of activity.

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Industrial Performance – DFW Metro

• Net Absorption: +5.3M SF (↑14% QoQ)

• Vacancy Rate: 5.7% (↑ from 5.4% Q1)

• Average Asking Rent: $7.58/SF NNN (↑1.8% QoQ)

• Under Construction: 24.1M SF

• Notable Activity:

  • Major lease renewals in South Dallas and Alliance submarkets

  • Institutional push toward owning last-mile fulfillment centers

Insights: Industrial remains the most in-demand asset class, but speculative development has slightly outpaced leasing. Owners with move-in-ready assets near transit infrastructure continue to outperform.

Multifamily Sector Snapshot

• Occupancy: 92.4%

• YOY Rent Growth: +3.9%

• Cap Rates: 5.1% average (Class A), 5.7% (Class B/C)

• New Units Delivered: 4,400

Insights: Leasing demand remains strong near economic corridors and university-adjacent neighborhoods. Rising construction costs and rate sensitivity are beginning to delay some development pipelines.

Office Sector – Stabilizing, Not Surging

• Vacancy: 23.8% (↓ from 24.2% Q1)

• Absorption: -215K SF

• Flight to Quality: Class A offices in Uptown and Legacy West outperformed with positive net absorption

• Sublease Space: 9.6M SF on the market

Insights: Hybrid work models continue to influence leasing patterns. Employers are upgrading to trophy space to attract talent, leaving commodity office inventory challenged.

Retail Sector – Neighborhood Centers Win

• Occupancy: 95.1%

• Avg. Rent: $20.45/SF (↑2.5% QoQ)

• Demand Drivers: Fitness, grocers, QSRs, and medtail tenants

Insights: Big-box centers continue to struggle, while walkable, service-oriented retail centers remain highly sought after, particularly in master-planned communities and infill neighborhoods.

Public-Sector Trends

• Increased activity among ISDs, cities, and counties acquiring strategic land positions

• Internal due diligence (appraisals, environmental, board approval) creates long lead time on closings

• Properties under $100/SF with clean logistics layouts attract attention

Insights: Navigating public acquisitions requires precision, patience, and political fluency. Sellers with consulting or entitlement partners are faring better in bid environments.

Capital Markets

• Debt Markets: Construction lending remains tight; banks still selective

• Private Equity: Heavy interest in value-add and light industrial

• Cap Rate Movement: Slight upward pressure on pricing expectations, especially for suburban assets

Strategic Takeaways for Stakeholders

1. Buyers: Prioritize assets with infrastructure access and flexible use potential.

2. Sellers: Work with advisors who can pre-package diligence, title, and approvals.

3. Tenants: Lock in favorable lease terms now—rate pressure expected late 2025.

4. Investors: Track submarket migration patterns—Sunbelt markets still attract the most inflow.

5. Public Entities: Start internal planning early; delays in board approvals remain common bottlenecks.​