The return of more employees to workplaces is not producing an even recovery across office markets. Instead, it is reinforcing a divide between buildings that can support employers’ workplace strategies and properties that no longer meet tenants’ expectations for location, layout, services and amenities.
Return-to-office mandates are increasing the value of offices that can help companies make attendance more attractive and operationally effective. Newer, well-equipped buildings are better placed to compete for tenants seeking adaptable space and a stronger in-office experience, even as many occupiers continue to reduce their overall footprints.
Lease expirations are accelerating that sorting process. Tenants approaching renewal decisions can use the opportunity to consolidate into higher-quality premises, leaving older assets exposed to prolonged vacancy or weaker leasing terms. As outlined in an editorial analysis by REALTY NEWS, the result is a more pronounced separation in both occupier demand and property values.
For owners of aging offices, the challenge extends beyond leasing. Refinancing pressure can intensify where valuations have fallen, while conversion plans may be constrained by building design, location, planning rules and the cost of redevelopment. The office comeback, therefore, is increasingly a selective one — rewarding assets that remain competitive while widening the risks facing obsolete stock.
