After several years of muted leasing and rising vacancies, the U.S. office market is starting to lure investors back not just because fundamentals are stabilizing, but because pricing has reset.
Marcus & Millichap Chief Intelligence and Analytics Officer John Chang said the sector's pullback in values is creating opportunities for buyers willing to move ahead of a full recovery.
"A key contributor to that trend has been the repricing of office assets," Chang said. He noted that, on average, office prices have fallen by 32% from their peak in 2021, while the average cap rate for office properties has risen to 7.5%. Top-performing assets in stronger markets are still trading near 6%, while weaker properties are "frequently trading on a price per pound basis," he added.
That reset is helping revive transaction activity. Office deal volume increased nearly 21% year-over-year in 2025, even though overall velocity remains about 6% below the sector's pre-pandemic pace. Private investors continue to dominate acquisitions, accounting for 54% of transactions, while institutional capital is beginning to return. Institutions captured 23% of sales volume last year, up from 18% in 2024.
According to Chang, the pricing shift is changing investor sentiment.
"Pricing on these assets has become increasingly attractive and many investors are beginning to look at this sector as an opportunistic acquisition," he said, describing office as "a diamond in the rough."
Improving space demand is helping support those bets. The fourth quarter marked the seventh consecutive period of positive absorption, generating nearly 95 million square feet of demand in 2025. National vacancy, which peaked at 17.2% in early 2024, has since declined to 16.3% and Chang expects it to fall further to 15.9% by the end of 2026. Office attendance has also climbed, reaching nearly 70% of pre-pandemic levels as more employers reinforce return-to-office policies.
Momentum is broadening geographically as well. Chang said occupancy is expected to rise in 36 of the 50 major metros tracked, with markets such as South Florida, Raleigh, Tampa and New York City posting some of the strongest outlooks due to lower vacancy, limited new supply and steady rent growth.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.