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Texas Office Market Snapshot | Q3 2026

Friday, October 30, 2026 22:22

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Texas Office Markets Stabilize in Q3 2026 as Flight to Quality Continues

Texas office markets continued to stabilize in Q3 2026, as Austin, Dallas-Fort Worth, and Houston all recorded positive net absorption and tenants kept favoring higher-quality space. DFW led the state with the lowest vacancy and strongest absorption, Austin held steady despite a major new delivery, and Houston gained ground even as leasing volume slowed. Statewide, limited new construction and a sustained flight to quality supported occupancy gains and kept rents firm.

Austin (180k sf), DFW (385k sf), and Houston (12k sf) all posted positive net office absorption in Q3, supported by limited new supply and strong tenant demand for Class A space.

Austin Office Market

Austin’s office market showed ongoing resilience in Q3 2026, recording its sixth consecutive quarter of positive net absorption at 180,100 square feet even as the 730,000-square-foot Waterline delivery in the CBD pushed vacancy slightly higher to 21.1%. Overall asking rents eased to $44.14 per square foot, while Class A rents remained elevated at $53.78 per square foot. The market’s long-term outlook stays constructive, supported by continued interest from technology and innovation tenants and a relatively modest 743,300-square-foot pipeline.

Austin Office Market Report | Q3 2026

Dallas – Fort Worth Office Market

The Dallas-Fort Worth office market continued to improve in Q3 2026, with vacancy declining to 19.3% on the back of 384,500 square feet of positive net absorption. Class A assets drove most of the leasing activity, while limited new deliveries of just 40,500 square feet helped support occupancy gains. Overall asking rents held firm at $34.27 per square foot, and Class A rents reached $39.31 per square foot, reflecting sustained demand for higher-quality space amid a 3.6 million square foot construction pipeline.

DFW Office Market Report | Q3 2026

Houston Office Market

Houston’s office market stabilized further in Q3 2026 despite softer leasing volume of 2.2 million square feet. Modest positive net absorption of 12,200 square feet and a decline in availability to 26.8% pushed overall vacancy to 27.6%, while Class A assets captured roughly 70% of leasing activity and continued to outperform. Asking rents edged higher to $34.18 per square foot overall and $39.51 per square foot for Class A, with limited new construction of 232,100 square feet helping the market remain on track for a second consecutive year of positive absorption.

Houston Office Market Report | Q3 2026

Frequently Asked Questions

Q: Which Texas office market performed best in Q3 2026?

Dallas-Fort Worth led the state. DFW posted the tightest vacancy at 19.3% and the strongest net absorption at 384,500 square feet. Class A assets drove most of that leasing, and only 40,500 square feet of new deliveries kept fresh supply from diluting occupancy gains. Overall asking rents held at $34.27 per square foot, with Class A reaching $39.31.

Q: Why did Austin’s vacancy rise if the market recorded positive absorption?

New supply outpaced demand for the quarter. Austin absorbed 180,100 square feet, its sixth straight quarter of positive net absorption, but the 730,000 square foot Waterline delivery in the CBD added more space than tenants took. That pushed vacancy to 21.1%. The delivery is a one-time supply event, not a demand problem. With a modest 743,300 square foot pipeline remaining and steady interest from technology and innovation tenants, Austin’s long-term fundamentals stay constructive.

Q: What does the flight to quality mean for office tenants in Houston?

Class A space is getting more competitive. Houston captured roughly 70% of its 2.2 million square feet of leasing in Class A buildings, and Class A asking rents rose to $39.51 per square foot against $34.18 overall. Vacancy remains high at 27.6%, but that figure overstates leverage for tenants targeting top-tier buildings. With only 232,100 square feet under construction, the supply of quality space is shrinking. Tenants seeking Class A space should start early and negotiate before options narrow further.

The post Texas Office Market Snapshot | Q3 2026 appeared first on Coy Davidson – The Tenant Advisor.

Source: https://coydavidson.com/texas-office-market-snapshot-q3-2026/?utm_source=rss&utm_medium=rss&utm_campaign=texas-office-market-snapshot-q3-2026

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