Why US Optimism could signal a New Office Renaissance in 2025.
3 reasons why we might see an office revival in Europe too.
Welcome to a new issue of the Unlocking Real Estate Value newsletter. Each week I will provide you with exclusive advice and professional insights to help you realise long-term value through real estate development.
Hit reply and tell us why.
In this newsletter, we’ll explore how U.S. investor sentiment could shape Europe’s 2025 outlook, highlighting why flexibility, strategic upgrades, and renewed optimism may signal a true office renaissance.
International investors like Norway’s Sovereign Wealth Fund are leading the charge. This is encouraging news for a sector that has struggled over the past five years, facing an identity crisis with few signs of recovery. However, 2025 might be the turning point for offices.
In this newsletter, we’ll cover:
U.S. office investment is rising, with investors targeting empty and distressed buildings for value-add strategies.
CBRE's acquisition of Industrious signals a major bet on flexible office operations to reposition aging properties.
Europe is showing early signs of recovery, with 80% of its office stock at risk of obsolescence by 2030, creating discounted opportunities for investors.
Now, let’s dive in.
1. U.S. Office Investment is Rising—Why Investors Are Betting on Distressed Properties
According to a recent Wall Street Journal article, U.S. office investments jumped by 20% last year. I was surprised to read this, especially after major firms like Blackstone had announced their pivot away from offices. So, what’s driving this renewed confidence?
Investors are implementing value-add strategies by targeting half-empty offices and premium buildings burdened with debt. Many older buildings are also being repurposed for office-to-residential conversions. Meanwhile, leasing activity is rebounding, largely due to "return-to-office" mandates by major companies.
Among the most active international investors is Norges Bank Investment Management, Norway’s sovereign wealth fund. Last year, they made significant investments in office properties across U.S. cities like Boston, San Francisco, and Washington, D.C.
Brookfield has long emphasized the "flight to quality" in offices—the idea that demand for premium office buildings remains strong and will continue in the foreseeable future. Given that Brookfield manages over $1 trillion in assets, I tend to take their perspective seriously.
2. CBRE’s Industrious Acquisition Signals a Shift Toward Flexible Office Models
Why would a global real estate powerhouse like CBRE acquire a flexible office brand like Industrious?
It’s not just about expanding their portfolio—there’s a deeper shift happening that many are overlooking.
The office sector is evolving into an operational asset class, where branding and tenant experience are becoming as important as the building’s physical attributes.
Flexible office operators can help landlords transform aging properties into dynamic, revenue-generating spaces. By offering shorter, more adaptable lease options, they attract modern tenants who prioritize flexibility and built-in amenities. This, in turn, enhances a property’s brand equity, accelerates lease-up times, and ultimately drives higher returns.
3. Europe’s Office Sector Shows Signs of Recovery—And a Surge in Value-Add Opportunities
Many overlook the fact that 80% of Europe’s office stock could become obsolete by 2030. This looming deadline presents a unique investment opportunity, as distressed assets hit the market at discounted prices.
What’s the missing piece of the puzzle? New sustainability regulations and shifting tenant demands are forcing building owners to either upgrade their properties or risk them becoming stranded assets.
Older offices present prime "buy low, improve, and rent high" opportunities. Investors who act strategically can take advantage of tighter environmental rules to negotiate favorable purchase prices before upgrading these spaces to modern, eco-friendly standards.
The "flight to quality" trend is already playing out. Brookfield’s recent approval for a one-million-square-foot office tower in the City of London underscores growing confidence in premium office developments.
Summary: Why 2025 Could Be the Year Offices Make a Comeback
The office sector is finally showing signs of recovery. If the U.S. trend continues, it may well spill over into the U.K. and Europe. We’ve already seen an uptick in activity since late 2024.
Here are the key takeaways from today’s insights:
U.S. office investment surged by 20% in 2024, and leasing activity has increased—indicating a strong trend toward office sector recovery.
CBRE x Industrious: CBRE’s acquisition highlights how office buildings are shifting toward operational models, where experience and branding are key.
Europe’s aging office inventory: With 80% of offices at risk of obsolescence, Europe could become a hotspot for value-add office investors.
One thing is clear: the office sector is undergoing a major transformation—and will keep many of us busy for the foreseeable future.
That’s all for today.
— Carlo
Founder and Managing Director Benigni
Related Articles:
Refer a Colleague
PS…If you’re enjoying this newsletter, please consider referring this edition to a friend or a colleague. Sharing valuable insights helps everyone make better investment decisions.
This post is sponsored by Benigni a specialist development manager working with international investors to realise long-term value through optimised development strategies. To learn more click this link to our website.
Subscribe to the Newsletter
A newsletter by Carlo Benigni providing, in less than 4 minutes, exclusive advice, strategies, and resources to help unlock hidden real estate value.
Subscribe for free to receive new posts and support my work.