The pandemic triggered the biggest shake-up in workplace habits in a generation. Offices emptied almost overnight, and the headlines were quick to call it “the death of the office”.
Fast forward to 2025, and the reality is more nuanced. Yes, remote work is here to stay – but so is the office. The difference? Businesses are rethinking how much space they need, where it should be, and what it’s really for.
For commercial real estate investors, the big question is this: is office space still worth the bet, or is it time to shift focus to other corners of the market? The answer lies in how the dynamics are evolving—and where opportunity is quietly taking shape.
How work from home has evolved
The remote work boom of 2020 wasn’t just a blip, it was a turning point. What started as a mass shift out of necessity has morphed into a long-term redefinition of how America works.
By 2023, the one-size-fits-all work from home (WFH) model gave way to hybrid setups across a lot of the economy. Amazon and Meta caused backlash when they demanded staff return to office three days per week, while consultancy groups KPMG and Deloitte started to shift back to office-based work in the name of productivity and collaboration.
Fast-forward to 2025, and there’s no single playbook. While some companies (like Goldman Sachs) want people in the office five days a week, others (like Zoom, ironically) have embraced flexible hybrid models. A few (most notably Spotify) have stayed fully remote.
There are a few reasons why working from home (at least some of the time) is a lasting change:
- Tech made remote work possible at scale
- Workers prefer the flexibility and autonomy of WFH
- Businesses spotted real cost savings
- Talent no longer had to live within commuting distance.
That said, it’s not a uniform picture. Tech firms tend to stay remote-friendly. Finance and legal are much more likely to favor time in the office. As an investor, this might affect the location and style of office building you put your money into.
How demand for office space has changed
Office occupancy rates tell the story that demand has dropped in major hubs like New York, San Francisco, Dallas, and Miami. The biggest hit is Class B office space in central business districts—often older, less flexible buildings that haven’t kept up with modern needs.
Meanwhile, some suburban campuses held up better, thanks to newer facilities and easier access. But the headline trend is clear: flight to quality.
Companies are shrinking their square footage but trading up: by ditching outdated layouts in favor of premium space that earns its keep. Think:
- Flexible, collaborative zones
- Wellness and amenity-rich environments
- Smart buildings built for innovation and talent retention.
Investors need to understand that the beige cubicle era is over. Today, it’s all about space that works harder for the business and the people in it.
What this means for investors: opportunities vs. risks
Despite more companies requiring a return to office, there are still some risks for those with office-based real estate in their investment portfolio.
Outdated office buildings that don’t meet modern needs are most likely to depreciate quickly. Finding new tenants for these properties can also lead to extended leasing cycles, and you might need to spend a lot of capital to renovate spaces to meet modern demands.
However, despite these challenges, there are some interesting opportunities for forward-thinking investors.
One option is adaptive reuse—transforming older office buildings into vibrant residential units (if zoning allows it) or dynamic mixed-use developments. If you’re interested in going this route, check out our tips on maximizing ROI on mixed-use properties.
There’s also high demand for premium office space in areas where hybrid working is the norm.
What tenants want from office space in 2025
Nobody wants the conventional office blueprint anymore. Instead, people are looking for smaller, flexible spaces that are designed intelligently. This means adaptable layouts for hot-desking and shorter-term leases.
Another big draw for modern tenants is green buildings and spaces that align with Environmental, Social, and Governance (ESG) principles. This reflects corporate commitments to sustainability and social responsibility.
The importance of location has also changed. While many companies still prefer being near the central business district, there’s also a demand for office space near major talent pools. We’re seeing growth in the “hub-and-spoke” model, where companies open smaller satellite offices (or use co-working spaces) in suburban areas.
Finally, if people have to go back to the office, they want to make it worth it. Tenants are more interested in amenities, so buildings with concierges and collaboration spaces are more likely to draw interest.
Emerging office real estate trends to watch
As an investor, it’s important to keep an eye on the major developments that are reshaping the office sector.
- The integration of Artificial Intelligence (AI) and automation is likely to change office operations and increase expectations for seamless, technologically advanced environments.
- Proactive zoning reform and other government incentives could stimulate and facilitate redevelopment projects, creating attractive investment prospects
- The rise of “third spaces” such as co-working integrated with lifestyle hubs like gyms and cafes is a remote work-focused trend worth exploring.
- Institutional capital is starting to invest more in adaptive reuse strategies, indicating that converting existing commercial property for new purposes could be a wise strategy.
What should office-space investors do next?
Look for prime assets that can flex with the market. The most resilient buildings are adaptable, ESG-compliant, and in locations people actually want to be: close to transport, amenities, and talent.
Ask the tough questions before you commit:
- Can the layout shift with tenant needs?
- What’s really driving demand in this submarket?
- Is it easy to get to, and does it offer more than just a desk?
Mixed-use potential is a major plus. If a building could support residential or retail in the future, you’re looking at extra income and stronger long-term value.
Our loan programs are built to support exactly this kind of opportunity, especially for multi-family and mixed-use properties. Make sure you understand both the upside and the risk, and move forward with clarity.
Your Next Steps in Office Space Investment
Investing in office space in 2025 requires insight, flexibility, and a smart financial strategy. At Express Capital Financing, we don’t just provide loans; we bring years of expertise, innovative solutions, and a deep understanding of the shifting dynamics in commercial real estate.
Whether you’re focused on premium office spaces, mixed-use developments, or creative adaptive reuse projects, the right lending partner can make all the difference in turning ideas into profitable investments. Our tailored loan programs are designed with forward-thinking investors in mind, helping you capitalize on new opportunities in this evolving market.
Let us help you navigate these trends with confidence and position your investments for long-term growth. Contact us today to turn market challenges into your competitive advantage.
