N
orth Texas is emerging as a leader in commercial real estate recovery following the pandemic. According to the Emerging Trends in Commercial Real Estate report by PwC and the Urban Land Institute (ULI), Dallas has taken the top spot on the list of markets for real estate performance in 2025, marking its first return to the top since 2019.
DFW's diverse economy, with employment growing 11.2 percent since February 2020, has enabled a swift recovery from COVID-19. The region's largest metropolitan statistical area boasts annualized five- and 10-year returns of 7.9 percent and 8.8 percent respectively, placing it in the top quartile of performance in the NCREIF Property Index.
The report highlights a shift towards strategic industrial development, with a focus on high-quality supply options that cater to users' needs. Tamela Thornton, executive director of ULI Dallas-Fort Worth, predicts a diversification of product, incorporating sustainable features and flexible facilities.
Data centers are expected to become one of the most active property types in the country over the next decade, with DFW ranking No. 4 among top US markets. The region's growing education base and demand for differentiated products will drive rent growth.
Retail vacancies have reached a 20-year low across most US markets, driven by increased demand and repurposed space. Thornton notes that retail is shifting towards smaller community-based stores and specialty retailers, with older spaces being repositioned into newer uses.
As the population continues to grow in DFW, affordability and attainability for housing will become a priority for development and investment activity. Thornton emphasizes the need for delivering various housing types, densification, and infill development in urban cores.
Developers are expected to reposition their focus towards inner core suburban areas and downtown urban cores due to infrastructure challenges. Thornton notes that DFW is already seeing infill development, with new projects emerging in areas like Uptown.
