Can You Still Get a Loan on a Dallas Office Building?
Terrydale Capital
Oct 12, 2026 13 Min read
If you own an office building in Dallas and the loan comes due in the next year or two, you have probably already had an uncomfortable phone call. The bank that wrote the original note either won't quote a renewal or comes back with a number well short of your payoff. Meanwhile, every headline says Dallas office is recovering.
Both things are true. Office loans are still closing in Dallas, and we place them. But the amount a lender will put on your building now depends heavily on which part of Dallas it sits in. The gap between the strongest and weakest submarkets is wide enough to decide whether a refinance works at all.
The Dallas office market is really several markets
The citywide numbers look better than they have in years. CBRE's Q3 2026 report shows DFW office vacancy fell 40 basis points to 24.6%, with roughly one million square feet of net absorption and leasing up to 2.52 million square feet from 1.80 million in Q2. New supply is nearly gone. Cushman & Wakefield expects only about 319,000 square feet of new office to deliver in 2026, the lowest total since 2012.
That average is a bit like averaging the temperature in your attic and your basement. The number is real, but nobody lives there.
Look at the submarkets and you get a different picture. Kidder Mathews' Q2 2026 data puts direct vacancy in Preston Center at 5.3%. Uptown/Turtle Creek sits at 20.8%. Las Colinas is at 29.0%, and the Dallas CBD is at 32.2%. Savills reports that Preston Center landlords are holding firm at $90 per square foot and up for new deals, while downtown failed to land a single one of the region's 20 largest leases in the first half of the year.
Lenders read the same reports you do. When they underwrite a building, the submarket is the first filter, and it shapes every number that follows.
How lenders size an office loan today
Every commercial lender runs three tests: loan-to-value, debt service coverage, and debt yield. Your loan amount is the smallest of the three results. On office properties right now, debt yield is usually the test that sets the ceiling.
Debt yield is your net operating income divided by the loan amount. It ignores interest rate, amortization, and the appraisal. It answers one question: if the lender had to take the building back tomorrow, what return would it earn on the money it lent? Lenders set a minimum, and in a submarket where three out of ten suites sit empty, they want a much bigger cushion.
Here is how that plays out. Take two office buildings, each producing $1,500,000 in NOI. One sits near Preston Center, the other downtown.
A lender comfortable with the Preston Center building might size to a 9.5% debt yield. That works out to $1,500,000 divided by 0.095, or about $15.79 million.
The downtown building faces a lender asking for a 12% debt yield. That is $1,500,000 divided by 0.12, or $12.5 million.
Same income. Same square footage. The downtown owner gets about $3.29 million less. If both owners carry a $14 million balance today, the Preston Center owner refinances with room to cover closing costs. The downtown owner needs to bring roughly $1.5 million to the closing table before paying a single fee.
Lease rollover is the second haircut
After the submarket, lenders go straight to the rent roll and ask which leases expire during the loan term.
In a tight submarket, an expiring tenant will probably renew, and if it leaves, the space should re-lease quickly. In a submarket running near 30% vacancy, many lenders underwrite an expiring tenant as if it is already gone.
Go back to the downtown building. Say one tenant paying $300,000 a year has a lease ending 18 months from now. The lender may cut underwritten NOI to $1,200,000. At a 12% debt yield, the loan drops to $10 million. The gap against that $14 million payoff is now $4 million.
The lender may also hold back tenant improvement and leasing commission reserves at closing to pay for re-leasing the space. That money comes out of your proceeds, not the lender's.
The practical lesson is simple. A signed renewal is worth more before you go to market than after. Turning a lease the lender would treat as vacant into five years of contracted rent can move your loan amount by millions, and even a short extension on a key tenant changes the conversation.
Who is lending on Dallas office right now
The national backdrop explains why many lenders are cautious. According to Commercial Observer, the office CMBS delinquency rate reached 13.2% in August 2026, the highest reading since at least 2019. Conduit office loans are the weakest slice at 14.4% delinquent, and about $39 billion of office CMBS matures over the next 12 months. Lenders are watching those losses in real time, and they price that experience into every office quote.
That does not mean the window is closed. It means the right lender depends on your building.
Banks are still lending on office, but most have trimmed their exposure. The ones still active tend to favor existing deposit relationships, smaller loan sizes, and full recourse. Life insurance companies want high occupancy, strong tenants, and low leverage, which makes them a natural fit for the best buildings in Preston Center and Uptown and a poor fit almost everywhere else. CMBS lenders will still quote office, but the conduit market is selective after the past two years.
For buildings with a real leasing story that need more time, bridge lenders and debt funds fill the gap. They cost more, but they will lend against where occupancy is heading, not just where it sits today. Family offices are another option. They can move on deals institutional lenders pass on, especially when the sponsor has a track record.
Owner-occupants have one more route. If your business occupies at least 51% of an existing building, an SBA loan may offer higher leverage than conventional office financing.
For current pricing by lender type, see our breakdown of office building loan rates in 2026 and office LTV and lender terms.
If your office loan matures in the next 18 months
Start now. Office refinances take longer than other property types because lenders dig deeper into leases, tenant credit, and the submarket. We cover the full timeline in what Texas owners should do 12 months before a loan comes due.
Get your rent roll and lease abstracts clean before any lender sees them. Then go after renewals, starting with the tenants whose leases expire inside the new loan term. Those signatures will do more for your loan amount than anything else on this list.
Run the three tests yourself before you shop. Our refinance calculator will show you where your building lands on debt service coverage, and the debt yield math is a single division. If the answer comes up short of your payoff, you want to know that a year early, not a month early.
Tell your building's story against its submarket, not the citywide average. A Las Colinas building that is 92% leased in a submarket near 30% vacancy has outperformed its neighbors, and that deserves to be the first thing a lender reads.
Finally, talk to your current lender early. Sometimes an extension paired with a partial paydown costs less than a new loan, and a lender facing the choice between extending you and taking back an office building in today's market often prefers the extension.
The answer depends on the address
Yes, you can still get a loan on a Dallas office building. Whether that loan covers your payoff depends on the submarket, the rent roll, and which lender sees the deal first.
At Terrydale Capital, we shop office financing across our lender network, from regional banks to life companies to private credit, and we know which lenders are quoting Dallas office this quarter and which have quietly stepped back. If your office loan is coming due, schedule an advisory call or reach out to our team and we will run the numbers on your building before you call your bank.
Partner With Terrydale Capital for Your Debt Financing Needs
When it comes to debt financing, understanding the right timing, process, and options is crucial. At Terrydale Capital, we provide a comprehensive range of commercial loan solutions tailored to meet your business's unique needs.
Success!
Product has been created successfully!
Headquartered in Dallas, Texas, Terrydale Capital is a leader in commercial real estate financing. We have close relationships with the nation’s top banks, lenders & family offices allowing us to provide the most competitive financing solutions in the market.
