In 2024, law firm Sidley Austin and consulting giant Deloitte both signed leases at 23Springs, a gleaming 26-story tower in Dallas’s Uptown submarket. The numbers looked like acomeback story: average office rents in the city were rising.
They weren’t. Or rather, the numbers didn’t mean what most people assumed they meant. And that gap between what headline rent data shows and what tenants actually pay is distorting decisions made by mayors, lenders, and corporate real estate teams across the country.
Traditional rent statistics answer a deceptively simple question: “What is the average rent per square foot among leases signed this quarter?” For decades, rent averages have been the best measure of a rental market, shaping how economists, investors, lenders, and policymakers understand commercial, retail, and industrial markets. From how cities set property taxes to how lenders underwrite loans and how companies decide where to expand or sign leases, these figures influence major decisions.
A more illuminating approach – comparing like with like in similar locations, and accounting for the concessions for tenants in lease terms – paints a different picture in Dallas. At best, office rents have stalled. That difference matters: when business leaders and policymakers rely on headline averages that make the market appear healthier than it really is, they may make decisions based on a distorted picture of demand. Business leaders deciding where to expand or how much office space to carry are looking at numbers that do not reflect the true cost—or the true weakness—of the market.
