DFW Ranks No. 1 in PwC and ULI Real Estate Report

The Dallas-Fort Worth metroplex has retained the top position in PwC and the Urban Land Institute's annual ranking of U.S. commercial real estate markets to watch. This marks the third consecutive year DFW has held the No. 1 spot in the report, which was released Tuesday.

The ranking places DFW ahead of Nashville, Tennessee, Miami, Raleigh-Durham, North Carolina, and San Francisco. The report reflects the views of nearly 1,500 real estate investors, developers, lenders, and advisers across the U.S. and Canada.

A primary driver of the region's standing is the growth of the Y'all Street financial corridor. Cushman & Wakefield, a contributor to the report, cited the arrival of the Texas Stock Exchange, NYSE Texas, and Nasdaq Texas. Goldman Sachs and Morgan Stanley also announced major hub expansions in Dallas, with the two firms planning to spend more than $1.3 billion on new offices.

The financial sector expansion is tightening the office market. Class A office vacancy in DFW is near 25%, down 190 basis points from its peak in the first quarter of 2025. The market has seen positive net absorption for seven straight quarters, totaling 3.8 million square feet. Asking rents for Class A space are now nearly 25% above pre-pandemic levels, with top-tier rents up 30%.

The industrial sector shows similar strength. Construction in North Texas has risen to 30.6 million square feet, up from 19.9 million square feet in the first quarter of 2025. The region's industrial vacancy rate dropped 250 basis points to 7.3%. Leasing for large properties over 500,000 square feet reached 23.9 million square feet through September, surpassing the 2023 record of 18.3 million square feet.

Other infrastructure projects contribute to the market's outlook. These include a $7 billion investment in Dallas Fort Worth International Airport terminals, a $2.5 billion expansion of Dallas Love Field set to begin in 2027, and a $3.8 billion overhaul of the Kay Bailey Hutchison Convention Center. The region was also ranked the world's top primary market for data centers.

In homebuilding prospects for 2027, DFW ranked second behind Houston. San Antonio placed 18th and Austin 27th. Houston's overall commercial market ranking fell one spot to sixth, while Austin moved up nine places to 21st and San Antonio dropped 15 places to 34th.