2025 DFW Market Update & 2024 Year In Review

2025 DFW MARKET UPDATE & 2024 YEAR IN REVIEW

THANK YOU!

As we embark on the new year, we want to express our sincere appreciation to our clients for their trust and partnership with our team. We are thankful for your confidence in our team and look forward to continuing to support your business success. This book provides an update on the Dallas office real estate market and highlights some of our clients’ achievements over the past year. Key trends in 2024 included rising vacancy, record-high rental rates, a continued flight to high-quality office buildings, a slowdown in new construction, and a challenging lending environment that left many building owners strapped for capital. With tenants “right-sizing” into smaller spaces in higher-quality buildings, both vacancy and office rents increased. DFW asking rents increased 4.9% over the past year, reaching an all-time high of $32.74/SF. Looking ahead to 2025, new office construction is expected to slow due to rising costs, a tough lending climate, and ongoing negative absorption. However, demand for high-quality, highly amenitized, walkable office buildings remains strong, and we anticipate further rental rate growth in Class A assets. We remain optimistic about the future of DFW and look forward to helping our clients navigate the evolving market in 2025.

Sincerely,

ROBBIE BATY

TRAVIS BOOTHE

ALEXANDRA BOURY

HANNA HENLEY

CONTENTS

TEAM MARKET INSIGHTS » DFW Submarket Pricing

04 05 06 08 10

» 2025 Team Predictions » Construction Timeline

» Five Tenant Friendly Lease Provisions » How To Protect Against Distressed Buildings

» Uptown Dallas Price Increases

11

CLIENT SPOTLIGHT » Clients Served » Willkie Farr & Gallagher

12 14 16 17 18

» King & Spalding » CheckSammy » Big 12 Conference

» CarMax

20 21 22

» K. Hovnanian Homes

» Santander

TEAM MARKET INSIGHT

R o

Little Elm

w l e t t

C r e e k 2025 SUBMARKET PRICING Lake Lewisville Shores Shady Hackberry Frisco

Corinth

CLASS A BUILDINGS

Lake Dallas

Ponds Park Creek Hickory

Cre k Hickory KEY: $ Rent/SF YOY % change in Rent 35E DFW $38.25 +4.8%

Lake Lewisville

PLANO/FRISCO

121

$44.44 +5.5%

Lake Lewisville

The Colony

Village Highland

Lewisville Lake

RICHARDSON

$30.45 +9.6%

DNT

Lewisville

d er

LEWISVILLE

121

PGBT

e k

e

C r

D

e

n

n

t

o

Carrollton

Addison FAR NORTH DALLAS

Coppell LAS COLINAS

Richards

$35.96 +2.4%

75

$32.47 -2.3%

Lake Nor th

vine

Branch Farmers

h

n c

a

r

B

s

C o o k

LBJ FREEWAY

635

$21.32 +2.9%

Air t Interna nal Wo th Dallas-Fort DFW AIRPORT

B a PRESTON CENTER c h m a n C r e e k

NORTH CENTRAL EXPRESSWAY

$56.55 5.4%

114

$37.68 +0.7%

Park University

Lake Bachman

DNT

Airport Field Dallas Love

Park Highland WEST LOVE FIELD UPTOWN/

183

Irving

TURTLE CREEK

$64.45 +11.3%

R i v e r

T r i n i t y

Dallas DALLAS CBD

360

MID-CITIES

T r $34.10 +3.3% i y

R i v e r

Prairie Grand

45

Lake Creek Mountain

2025 TEAM PREDICTIONS

ROBBIE BATY

Office rental rates in Uptown will continue to surge to record heights with new buildings eclipsing $100/SF in overall asking rent. Speculative construction in Dallas will decline, with fewer than three new office developments breaking ground this year. The Rangers will win the AL West.

01.

02.

03.

TRAVIS BOOTHE

01. 02.

As tenants continue to relocate to nicer assets, Class B building vacancy will increase from 22.5% to 25%. Absorption in the DFW office market will remain negative at 4 million SF as companies continue to consolidate their footprints. Texas Tech football will go 9-3 next season.

03.

HANNA HENLEY

Plug and Play options will continue to dominate tenant interest as tenants avoid excessive out-of-pocket capital expenditures The Uptown, Las Colinas and Far North Dallas submarkets will experience the most leasing activity in 2025 SMU will host ESPN’s College GameDay on the Boulevard for the first time ever this fall. Sublease inventory will decrease from 8.5 million sf to 7 million SF due to improved market stability and the natural expiration of subleases that remain unoccupied. Office tenants will demonstrate a greater willingness to commit to longer-term leases as hybrid work strategies become more defined and business confidence continues to grow. Bitcoin will increase from the current price of $103,000 to $185,000.

01.

02.

03.

ALEXANDRA BOURY

01.

02.

03.

TEAM MARKET INSIGHT

OFFICE SPACE CONSTRUCTION How long does it take to build a new office? This is a common quest and size of the space, as well as the city and permitting requirement Beyond the buildout itself, it’s important to account for the time recommended construction timeline to guide your office space eval

FULL TENANT BUILDOUT FROM SHELL CONDITION

Space Planning 2 Weeks

Schematic Design 2 Weeks

Design Development 2 Weeks

Construction Drawings 1 Month

Permit 1 Month

MODERATE RENOVATION OF 2ND GENERATION SPACE

Construction Drawings 1 Month

Space Planning 1 Week

Schem Design 1 Week

Design Dev 1 Week

Permit 1 Month

Constru 2-3 Mo

LIGHT RENOVATION

Tech & FF&E Install 2 Weeks

TOTAL 2-3 Month

Construction Drawings 3 Weeks

Space Planning 1 Week

Schem Design 1 Week

Design Dev 1 Week

Construction 1 Month

^

^

^

Begin

N tion, and the answer varies based on several factors. The condition ts, all impact the construction timeline. e needed for site selection and lease negotiations . Below is our luation.

Technology & FF&E Installation 2 Weeks

TOTAL 9-10 Months

Construction 5-6 Months

Technology & FF&E Installation 2 Weeks

TOTAL 5-6 Months

uction onths

hs

^

^

^

End

TEAM MARKET INSIGHT

Economic uncertainty, rising interest rates, and shifting workplac important than ever. As tenant representatives, we help clients n Here are five key provisions to include: 5 TENANT FRIENDLY L

PROTECTION AGAINST LANDLORD DEFAULT

An SNDA (Subordination, Non-Disturbance, and Attornment) clause safeguards tenant rights if a landlord faces foreclosure, ensuring lease continuity under new ownership.

Funded by the landlord, t (TIA) should cover not architectural fees, furnit should also secure the abil TENANT IMPROVE

Business needs evolve, so leases should allow for growth. Fixed expansion options and rights of first refusal (ROFR) provide tenants with opportunities to scale within their lease term. EXPANSION OPTIONS

ce trends have made securing tenant-friendly lease terms more negotiate leases that provide flexibility and protection . LEASE PROVISIONS

SUBLEASE & ASSIGNMENT CLAUSE

As hybrid work reduces space needs, strong sublease and assignment clauses help tenants recover rental costs by allowing subtenants.

the Tenant Improvement Allowance just construction costs but also ture, and A/V equipment. Tenants lity to apply unused TIA toward rent. EMENT FLEXIBILITY

To avoid excessive penalties for staying beyond the lease term, tenants should negotiate a 1–2 month grace period and cap holdover rent at 150% of base rent, preventing liability for consequential damages. HOLDOVER CLAUSE

TEAM MARKET INSIGHT

3 WAYS TENANTS PROTECT AGAINST DISTRESSED BUILDINGS

SECURE SELF-HELP & OFFSET RIGHTS

These allow tenants to address neglected landlord obligations, ensuring a functional space. Tenants can make necessary repairs and deduct costs from future rent.

A Subordination, Non-Disturbance, and Attornment (SNDA) agreement is essential, especially in distressed buildings, protecting leasehold improvements in case of foreclosure or sale. OBTAIN A SNDA AGREEMENT

ESCROW TENANT ALLOWANCES

In distressed properties, landlords may lack funds for tenant improvements. Establishing an escrow account helps ensure these funds are available for necessary renovations.

UPTOWN DALLAS PRICE INCREASES

Uptown Dallas office rents continue to rise, defying broader market declines. Top buildings now command $85–$100 per square foot—more than double Class A rates from a decade ago — driven by strong demand and market resilience.

OVERALL PRICE INCREASE

RATE THEN

RATE NOW

23 SPRINGS UNDER CONSTRUCTION (2025 EST. COMPLETION)

2022 2024

24%

$70.00 $87.00

2021

2024

WEIR’S PLAZA RECENT BUILD (2021 COMPLETION)

42%

$67.00 $95.00

MCKINNEY & OLIVE PREVIOUS GENERATION (2016 COMPLETION)

2024

2016

50%

$58.00 $89.00

CLIENT SPOTLIGHT

CLIENTS SERVED

134 2.1 MILLIO SF LEA TRANSACTIONS COMPLETED

13 $887M ON ASED IN TOTAL CONSIDERATION

CLIENT SPOTLIGHT

CLIENT: Willkie Farr & Gallagher LLP TYPE: New Location SIZE: 53,051 SF BUILDING: The Quad (2699 Howell St.) SUBMARKET: Uptown C&W TEAM: David Guion, Robbie Baty & Alexandra Boury TRANSACTION DETAILS: Willkie Farr & Gallagher LLP is a leading global law firm that decided to open a new location in Dallas, given the market’s exceptional growth and significant legal sector presence. When Willkie engaged C&W to identify a location for their Dallas office, they emphasized the importance of being in a Class A building with strong visibility. Since this is a new location and Willkie is actively recruiting attorneys to join their team, their square footage needs fluctuated significantly, requiring the C&W team to remain agile as their requirements evolved. C&W protected Willkie’s ability to grow by negotiating for expansion rights and rights of first refusal. Ultimately, Willkie selected Uptown’s newest building, The Quad, due to its superior amenities, building signage options, and potential for growth.

Our primary objective for our first permanent office in Dallas was to select a best in class building with ample amenities and room for us to grow our footprint as we grow our team. We wanted to provide a great workplace that would give us an edge in a highly competitive legal market. The C&W team did a great job leading us through the office search and negotiation process, and we are thrilled to be opening our office in the new building, The QUAD, this year.”

— J. Holt Foster III – Managing Partner – Dallas Office

CLIENT SPOTLIGHT

CLIENT: King & Spalding TYPE: New Location SIZE: 24,935 SF BUILDING: The Link (2601 Olive St.) SUBMARKET: Uptown C&W TEAM: Robbie Baty, Travis Boothe, Alexandra Boury TRANSACTION DETAILS : King & Spalding, an Am Law 100 firm new to Dallas, hired a team of attorneys and needed to quickly open an office to accommodate their growing team. Their goal was to identify a move-in-ready office in a high profile Uptown building. Given the highly competitive office landscape in the Uptown submarket, there were no publicly available turnkey spaces at that time. Leveraging their extensive network and in-depth knowledge of tenant activity in the area, the Cushman & Wakefield team identified an off-market opportunity in one of Uptown’s newest buildings, The Link. This space, which had never been occupied, was newly constructed and fully furnished, making it perfectly suited to King & Spalding’s requirements. The K&S team chose to sublease the space identified by the C&W team, saving significant time and resources while meeting their urgent needs.

CLIENT: CheckSammy TYPE: Lease Renewal & Expansion SIZE: 45,098 SF BUILDING: The Madison (15851 Dallas Pkwy.) SUBMARKET: Addison C&W TEAM: Travis Boothe, Hanna Henley & Robbie Baty

The C&W team has been an essential partner for our business. When we first engaged with them, we had no experience opening an office, and since then we have expanded our footprint several times. Throughout it all, the C&W team has been responsive, reliable and trustworthy.”

— Sam Scoten, CEO and Co-Founder

CLIENT SPOTLIGHT

CLIENT: Big 12 Conference TYPE: Relocation SIZE: 14,107 SF BUILDING: Williams Square (5215 N. O’Connor Blvd)

SUBMARKET: Las Colinas C&W TEAM: Travis Boothe

TRANSACTION DETAILS: The Big 12 Conference expanded from ten schools to sixteen schools and required additional office space to accommodate their growing staff. In order to continue to innovate and remain competitive in the evolving college athletics landscape, the Conference sought a new, modern headquarters that would foster collaboration and creativity among its employees. C&W was tasked with a multi-market search to find a headquarters that embodied the Conference’s vision for the next decade. C&W successfully negotiated a new lease at Williams Square in Las Colinas, one of the top buildings in the submarket, allowing the Big 12 Conference to design a custom space from shell condition. Additionally, C&W assisted in selling the Big 12’s previous building in Las Colinas for an above-market price.

Cushman & Wakefield helped us evaluate various buildings in the DFW market for our expanding Big 12 Conference. Not only did they exceed our expectations by selling our previous building at above-market value, but they also secured an ideal lease for us at Williams Square in Las Colinas. Thanks to C&W’s guidance, our new office will perfectly reflect our growing brand.”

— Catrina Gibson, Chief Financial Officer & Human Resources, Big 12 Conference

CLIENT SPOTLIGHT

CLIENT: CarMax TYPE: Lease Renewal & Expansion SIZE: 15,243 SF BUILDING: Granite Park Five (5830 Granite Pkwy.) SUBMARKET: Legacy/Frisco C&W TEAM: Travis Boothe, Robbie Baty & Hanna Henley TRANSACTION DETAILS: CarMax was experiencing significant headcount growth in Plano, resulting in a space shortage in their Granite Park Five office. Recognizing their need for additional space, Cushman & Wakefield took a proactive approach to address this problem. Leveraging their in-depth market knowledge, C&W identified adjacent space that was soon-to-be vacated by another tenant. Shortly after C&W identified the expansion opportunity, another tenant began competing for the same space. Because of C&W’s swift actions they were able to secure the ideal expansion area for CarMax before the other tenant.

CLIENT: K. Hovnanian Homes TYPE: Relocation SIZE: 29,386 SF BUILDING: International Business Park (6111 W. Plano Pkwy.) SUBMARKET: Legacy/Frisco C&W TEAM: Travis Boothe & Robbie Baty

Our team was spread across three different locations in North Texas. We wanted to streamline our operations into a single, centralized regional hub, so we engaged the C&W team to coordinate the alignment of our staggered lease expirations. The C&W team did an excellent job negotiating a phased move-in plan for our new space, which enabled us to consolidate all our operations under one efficient roof, enhancing productivity and synergy.”

— Kevin Small, Group Vice President, Finance

CLIENT SPOTLIGHT

CLIENT: Santander Consumer USA TYPE: Lease Renewal SIZE: 211,087 SF BUILDING: Santander Tower (1601 Elm Street) SUBMARKET: Central Business District C&W TEAM: Robbie Baty & Travis Boothe

TRANSACTION DETAILS: Santander Consumer USA engaged C&W to determine their optimal footprint in their largest US office considering their newly implemented return-to-work policies. After C&W’s Workplace Strategy team analyzed Santander’s usage of their space, they concluded that Santander needed to reduce their size by approximately 30%. The challenge presented was that Santander still had several years remaining on their existing lease at a larger square footage than they required. C&W evaluated potential relocation options in the market in order to create a competitive environment for Santander’s tenancy, and ultimately was able to successfully negotiate an early downsize and lease extension, which resulted in immediate, significant savings for Santander. The final lease is the largest completed in Downtown Dallas in the past five years.

We had a complicated real estate situation and needed a sophisticated team to guide us through the lease search and negotiation process. The C&W team was able to successfully navigate multiple factors in the transaction to create a beneficial outcome for our team. We are happy to recommit to Downtown Dallas for the long term future.”

— Erik Laney, Chief Financial Officer

ROBBIE BATY Vice Chairman Dallas Office Tenant Representation Leader

D +1 972 663 9781 M +1 214 232 4055 robbie.baty@cushwake.com

TRAVIS BOOTHE Executive Managing Director D +1 972 663 9843 M +1 214 532 3471 travis.boothe@cushwake.com

ALEXANDRA BOURY Senior Director D +1 972 663 9659 M +1 214 727 0745 alexandra.boury@cushwake.com

HANNA HENLEY Director

D +1 972 663 9726 M +1 972 835 1558 hanna.henley@cushwake.com