5 Key Reasons Office Buildings Are Poised for Strong Financial Performance in the Coming Years

By Managing Partner Grant Horwitz

After several years of uncertainty in the commercial real estate market, especially in the office sector, the tide has started turning. While remote work reshaped occupancy trends and urban dynamics, many investors and analysts are beginning to see strong signals that office buildings are heading for a resurgence. Below are five key reasons why office buildings are our favorite asset class at HREF. Yes, it is because we believe that they are poised for stronger financial performance in the years ahead.

1. Flight to Quality is Driving Demand for Premium Spaces

As companies reassess their workspace needs, many are opting for less square footage—but significantly higher quality. This “flight to luxury” trend favors modern, amenity-rich, and energy-efficient buildings in prime locations. Office owners who invest in upgrades or already own Class A buildings are seeing stronger leasing activity and rent growth. In short, demand is concentrating at the top, and those well-positioned assets are reaping the financial benefits.

2. Hybrid Work Is Stabilizing Occupancy Patterns

The work-from-home era led to major disruption, but hybrid work is now becoming the norm for many industries. This trend has created more predictable, long-term occupancy patterns, allowing landlords to adjust operating models and reconfigure spaces to suit changing tenant needs. Landlords offering flexible space, shared amenities, and wellness-focused design are attracting steady demand.

3. Urban Revitalization and Infrastructure Investment

Major cities are investing heavily in transportation, sustainability, and neighborhood revitalization projects. These initiatives are making urban cores more attractive to both companies and workers, particularly younger professionals who value in-person collaboration and urban amenities. As cities bounce back, office buildings located near transit hubs and walkable neighborhoods are seeing a resurgence in value.

4. Corporate Recommitment to In-Person Culture

Many large corporations are renewing their commitment to in-person work to foster collaboration, innovation, and company culture. Even with hybrid models, the physical office is regaining importance as a central hub for meetings, onboarding, and client engagement. This shift is translating into longer lease terms and higher occupancy rates, especially in buildings that offer flexible layouts and advanced tech infrastructure.