Previously fluctuating legal leasing activity is expected to be consistent in the future
Since 2017, legal leasing activity in Dallas-Fort Worth has rhythmically increased, then decreased year-over-year (YOY). The first year of the pandemic saw leasing at its highest, with 736,000 sf, followed by 238,000 sf in 2021 and 671,000 sf in 2022. So far, this year has bucked the trend, with occupiers committing to lease 344,000 sf through the first half of the year, which suggests the beginning of a gradual shift toward more consistent leasing activity going forward. The first half of 2023 also saw the legal sector constitute 6.5% of overall leasing in Dallas-Fort Worth, which is its highest recorded share. This further underscores the economic resilience of legal occupiers and their commitment to traditional office utilization in the wake of widespread hybrid work strategies deployed in other sectors.
The Uptown/Turtle Creek submarket has been the top choice for legal occupiers in Dallas-Fort Worth; since 2020, 28.1% of legal leasing activity has been for space within its boundaries. The Dallas Central Business District (CBD) is another choice submarket, capturing 25.3% of legal sector leasing activity over the same period. The Dallas Arts District, which captured 10.4% of leasing activity, has been the third most popular submarket for legal sector leasing since 2020.
It is likely that law firms, with their seemingly universal desire for upscale space, will opt to relocate to newer buildings in the market as lease expirations and new construction deliveries begin to overlap in the coming years. In the Uptown/Turtle Creek submarket, there is currently 2.3 msf of Class A office space under construction, and it is expected to be complete by December 2025. However, Kirkland & Ellis’s move to Weir’s Plaza in the Knox/Henderson area—which is just a few blocks north of Uptown/Turtle Creek—could be an early sign of legal tenants’ willingness to relocate slightly north along U.S. Highway 75, if available space on the market meets their requirements.
Dallas-Fort Worth—America’s Boomtown?
Dallas-Fort Worth has done exceptionally well in terms of its business recruitment and expansion efforts, and the area has seen a number of corporate headquarters relocations as a result. According to Axios, 265 businesses have either relocated to Dallas-Fort Worth or expanded there since 2020.1 The north Texas metropolitan area has a strong and diversified economy, with no corporate income tax, competitive incentives, high-quality infrastructure and plenty of commercial real estate. For office occupiers, inventory levels in Dallas-Fort Worth are nearing 250 msf, with an average rental rate of $34.14 per square foot (psf) in the second quarter of 2023.
The corporate migration to Dallas-Fort Worth isn’t only enticing to major corporations, it also attracts the companies that support them—and major law firms that recognize the strategic advantages of a growing business hub are quick to follow suit. In 2021, Duane Morris, an Am Law 100 firm, opened its first office in Dallas and then opened a Fort Worth location just 18 months later. Blank Rome, another Am Law 100 firm, announced the opening of their first office in Dallas—the firm’s second in Texas—in July of this year.
Within the Dallas-Fort Worth metropolitan area, there are 108 law firms that are part of the NLJ 500. Collectively, the firms occupy 122 individual offices and employ 4,369 attorneys. Of the 108 firms, 13 have at least two offices in the metro, and one firm has three.2
1 Axios, ‘How Dallas Fort-Worth Became America’s Boomtown’, 2023
2 National Law Journal, NLJ 500, 2023
